Powering the Future: Meeting the Surge in U.S. Electricity Demand

The U.S. electric grid is entering a new era—one defined by surging demand, digital transformation, and the race to modernize aging infrastructure.

After nearly two decades of relatively stagnant growth (averaging 0.1% per year from 2008 to 2021), U.S. electricity consumption has shown a recent uptick. According to the U.S. Energy Information Administration (EIA), U.S. electricity consumption grew 2% in 2024 and is projected to rise another 2% in both 2025 and 2026, the first three-year growth streak since the 2005–2007 period.

Both electricity demand and consumption are up, but they mean different things, and they present different challenges.

Electricity demand is the rate at which electricity is used at any given time, measured in kilowatts (kW). It’s essentially the instantaneous power being drawn from the grid. Think of it like the speed of a car—how fast the energy is flowing.

Consumption, on the other hand, is the total amount of energy used over a period of time, measured in kilowatt-hours (kWh). This is like the distance traveled by car—the total energy consumed.

For example, using ten 100-watt light bulbs for one hour results in high demand during that hour, but it results in the same total consumption (one kWh) as using one 100-watt bulb for ten hours.

Increases in electricity demand result in increases in electricity consumption. Several converging forces are fueling this unprecedented rise in electricity demand.

Prefer to watch a video? I sat down with Rachel Dowling, Director of Energy & Utilities, to discuss the surging demand for electricity, and what that means for utilities.

The New Era of Electricity Demand

Here are the main drivers of the U.S. demand surge:

• Data centers for AI, Cloud, ML, and crypto-mining
• The electrification of buildings and transportation
• Industrial and manufacturing onshoring and expansion
• Climate change, such as severe heatwaves or extremely cold weather

According to the Electric Power Research Institute (EPRI)’s 2024 report, data centers could consume up to 9% of electricity generation in the U.S. by 2030, which is more than double their current usage. A single data center now consumes power equivalent to 80,000 to 800,000 homes.

This EPRI report identifies the top 15 states for electricity demand in 2023. I predict the following states will have significant growth in electricity demand, especially in the commercial sector, from 2024 to 2030:

• Virginia: As a central hub for data centers—with Loudoun County known as Data Center Valley—Virginia’s commercial electricity demand will grow significantly.
• North Dakota: Large computing facilities have driven rapid growth in commercial electricity demand in North Dakota, supported by abundant and competitively priced energy sources.
• Texas: With the highest number of permits for data center development submitted in the last six months, Texas has experienced substantial demand growth, driven by data centers, lower energy costs, economic activity, and population growth.
• Nevada, Oregon, and Arizona: These states also have numerous data centers and a rising demand.

But with rising demand comes rising pressure. The next challenge: ensuring the grid can keep up.

The Challenge: Why the Grid Is Under Pressure

As electricity demand surges, the U.S. power grid faces mounting pressure to deliver reliable, resilient, and affordable energy. But doing so is no small feat. The challenges are complex and interconnected, rooted in aging infrastructure, evolving energy sources, and workforce constraints.

Aging Infrastructure

70% of U.S. transmission lines are over 25 years old, according to the Department of Energy (DOE). 55% of U.S. transformers are more than 33 years old. Much of the grid is operating beyond its intended lifespan, increasing the risk of outages. Modern load characteristics, such as variable, peaky, and distributed, are stressing legacy assets beyond their original design.

Public Safety and Cybersecurity Risks

Grid failures aren’t just inconvenient—they can be life-threatening. Outages impact critical infrastructure like hospitals, emergency services, and even the economy, particularly when they occur in economically viable metropolitan areas. Climate-driven events, such as the 2021 Texas freeze, demonstrate the possible consequence of grid failure. At the same time, increased reliance on digital systems introduces new vulnerabilities to cyberattacks, making grid security a top priority.

The Renewable Reliability Gap

While wind and solar capacity are growing rapidly, their intermittency creates reliability gaps. Without sufficient firm capacity, such as nuclear or battery energy storage, the grid becomes more fragile, particularly during extended periods of low renewable energy output.

Cost Allocation and Rate Design

Grid upgrades require significant investment. Cost allocation remains contentious, with debates over who should bear the financial burden. Utilities face resistance to rate increases, and regulators must balance cost causation with equity. Disagreements over cost allocation can delay critical upgrades and infrastructure projects.

Workforce and Skills Gaps

A large portion of the utility workforce is nearing retirement, creating a shortage of skilled labor. The industry needs new talent in areas like smart grid operations, cybersecurity, data science, and distributed energy resource (DER) integration. Closing this gap requires targeted recruitment, training, and retention strategies.

Despite these challenges, there are solutions.

The Solution: Building a Resilient, Modern Grid

Meeting the accelerating demand for electricity—and doing so reliably—requires a multi-pronged approach that includes:

• Power generation
• Transmission
• Grid infrastructure
• Digital transformation
• Customer engagement

Let’s take a look at some of these factors.

Reliable Generation: The Role of Nuclear Power

Nuclear power plants provide a stable and consistent source of electricity, which is crucial for meeting baseline demand and enhancing grid reliability. Unlike intermittent renewable sources like solar and wind, nuclear power can operate continuously, reducing the need for backup generation during periods of low renewable output. This reliable generation helps stabilize the grid and provides a foundation for integrating renewables.

The Federal Energy Regulatory Commission (FERC) included this graph in their 2023 State of the Markets Report. The graph below represents the nameplate capacity net additions and retirements from 2013 to 2023 by resource type under each region:

Transmission Expansion & Grid Modernization

Expanding and modernizing the transmission system is critical to reducing congestion as well as improving reliability and resiliency. Modernization also enables the integration of distributed energy resources like rooftop solar and electric vehicles, enhancing grid flexibility. Finally, a modernized grid can meet the high energy demand of data centers, manufacturing plants, and other industrial facilities, enabling economic growth and attracting new industries.

Key strategies include:

• Smart Grid Technologies: Phasor Measurement Units (PMUs), digital relays, and distribution automation enable real-time monitoring and faster fault isolation, reducing outage duration and scope.
• Grid-Enhancing Technologies (GETs): Tools like Dynamic Line Rating and Advanced Power Flow Controllers can significantly increase the capacity of existing lines, allowing them to carry more electricity without building new infrastructure.
• Resiliency Investments: Grid hardening measures protect infrastructure from extreme weather events and natural disasters.

According to a recent Edison Electric Institute (EEI) report, U.S. transmission investment has surpassed $30 billion annually. Much of this is driven by rising equipment costs and reemerging load growth.

Regional planning is also evolving. The demand surge in the coming years compels regional operators to utilize the multi-value benefit-cost analysis based on FERC Order 1920. For example, Midcontinent Independent System Operator’s (MISO) Long-Range Transmission Planning (LRTP) projects are expected to add over $30 billion in investment over the next decade, supported by this multi-value benefit-cost analysis.

Digital Transformation and AI

Digitizing the grid integrates digital technologies for real-time monitoring and optimization of planning and operations. This includes:

• Smart Meters, Sensors, and Networks: These provide real-time data on energy consumption and grid performance.
• Historical Data Digitization: Digitizing historical data enhances efficiency, supports predictive analysis, forecasts maintenance needs, and enables quick responses to disruptions.
• Predictive Analytics: AI and machine learning analyze extensive data to predict demand patterns, anticipate grid issues, and optimize energy distribution, helping utilities manage demand surges and lower outage risks.
• Customer Engagement Tools: Digital channels—like mobile apps and online portals—help customers participate in demand response programs and manage their energy use.

A real-world example: In September 2023, California issued an Amber Alert asking residents to reduce electricity use during a peak demand event. The response helped stabilize the grid—demonstrating the power of digital engagement.

Your Professional Services Partner

Effectively managing the surge in electricity demand requires more than just infrastructure—it demands vision, expertise, and execution. This includes building reliable generation like nuclear power, investing in transmission infrastructure to connect resources and enhance grid stability, and modernizing the grid with digital technologies and customer engagement. These efforts ensure a reliable, affordable, and sustainable energy future for the U.S.

Insight Global’s professional services division, Evergreen, currently works with seven of the top 10 investor-owned utilities (IOUs) in the U.S. Our teams bring deep technical expertise and industry knowledge to support:

• Customer Experience (CX): Helping utilities improve communication and engagement, particularly around demand response programs and energy efficiency initiatives. Evergreen operates the contact center for a major IOU in the Southeast, which was recently recognized as a top scorer in JD Power rankings.
• Applied Engineering Services (AES): Supporting planning, system studies, asset management, design, permitting, GIS services, and project management to expand and modernize infrastructure.
• Cloud, Data, App, and AI (CDAA): Enabling utilities to leverage technologies like cloud migration, data analytics, GenAI, and AgentAI to optimize grid planning, forecasting, and real-time operations.

With a foundation in talent and a focus on technical delivery, Evergreen is a valuable partner to any business in the energy industry. By focusing on areas such as applied engineering, digital transformation, cybersecurity, AI, and workforce development, our experts help utilities navigate the complexities of demand surges, enhance grid reliability, and build a sustainable energy future.

Let’s build the grid of the future—together. Contact Evergreen to learn how we can support your utility’s transformation.

Kaveh Aflaki, Ph.D., M.B.A., is Industry Principal for Energy & Utilities at Insight Global and Evergreen, our professional services division. Connect with him on LinkedIn.