Electric Demand Growth and a New Strategic Lens
Commentary by Cy McGeady
Published March 28, 2024
The Power Line is a newsletter series that reviews key stories in the electric power sector—ranging from grid reliability, transmission issues, and emergent technology and business models. The Power Line will highlight the connections and relevance between the sector’s technical, local, and often esoteric stories to high-level public policy conversations on climate and energy taking place in Washington, D.C.
The Energy Security and Climate Change program recently hosted a conversation with Rob Gramlich, president of Grid Strategies, and Brian Janous, former VP of Energy for Microsoft and founder of Cloverleaf Infrastructure, on electric demand growth. The takeaway is that this rapidly developing issue is one of national strategic importance.
Electric demand growth is a simple enough phenomenon: as a country the United States is using more electricity. Three converging economic trends are driving a sudden shift from decades of near-zero growth onto a new faster growth trajectory. First, the boom in artificial intelligence (AI) has unleashed vast new investment in data centers. Second, a new era of federal industrial policy is inducing new investment across many industrial and manufacturing sectors. And third is the slowly accelerating effects of mass electrification, most notably in transport, but also in residential and commercial heating, and industrial heat applications. A new era of policymaking and investment in the electric power sector is needed to enable rather than undermine these economic ambitions.
Historic Context
The historic arc of electric power consumption is crucial to understanding the current moment. The postwar economic boom was powered by and drove a similar boom in electric power consumption; in 1950 the United States consumed 300 billion kilowatt-hours (kWhs) of electricity, Twenty years later in 1970 that figure stood at 1.39 trillion kWhs, a well over tripling of the sector. In the 1970s, that growth rate shifted downwards, twenty years later in 1990 annual consumption stood at 2.83 trillion kWhs; the system had merely doubled.
https://www.csis.org/analysis/electric-demand-growth-and-new-strategic-lens
