US Electricity Use Heads for Back-to-Back Records as Data Centres Drive Demand
The EIA expects generation to grow 2.2% this year and 1.7% in 2027, led by Texas and neighbouring states, with natural gas still supplying two-fifths of US power.
Americans will use more electricity this year than ever before, and more again in 2027, according to the US Energy Information Administration's latest Short-Term Energy Outlook, published on 9 September. The agency expects total generation to rise by 2.2% in 2026 to about 4,368 billion kilowatt-hours, followed by a further 1.7% increase next year.
Retail sales, which measure what homes and businesses actually buy from their suppliers, are forecast at a record 4,135 billion kilowatt-hours this year, up 1.9% on 2025, and 4,211 billion in 2027, a rise of 2%.
Context: the end of flat demand
For much of the past two decades, US electricity consumption barely moved. Efficiency gains in lighting, appliances and industry offset population and economic growth, and utilities planned around a flat line. The new forecasts confirm that period is over.
The EIA attributes the growth mainly to data centres and manufacturing, with the fastest expansion in the West South Central region, which covers Texas, Oklahoma, Louisiana and Arkansas. Texas shows the pressure clearly. ERCOT, which runs most of the state's grid, set an hourly demand peak of 91.1 gigawatts on 22 July, and weekly average load has stayed close to record levels into September amid persistent heat.
The fuel mix is changing more slowly than demand. The EIA expects natural gas to supply 40% of US generation in 2026, nuclear 18%, coal 16%, wind 11%, solar 8% and conventional hydropower 6%, with other sources making up the remainder.
Why it matters
Rising demand changes the economics of the whole system. Utilities that spent years retiring plants now need to add capacity, strengthen transmission lines and keep some older units available for longer. That investment eventually reaches customer bills, which raises a difficult question about how costs are shared between large new users, such as data centre operators, and existing households and businesses.
It also matters for fuel markets. With gas supplying two-fifths of US power, every increase in electricity demand adds to domestic gas consumption at a time when exports of liquefied natural gas are also growing. The EIA expects LNG shipments of about 17 billion cubic feet a day this year and 19 billion next. It forecasts the Henry Hub benchmark gas price averaging $3.43 per million British thermal units in 2026 and $3.28 in 2027.
Storage is providing some flexibility. US battery capacity grew by roughly 70% over the past year to nearly 52 gigawatts by mid-2026, the EIA reported in August, allowing solar power generated at midday to be shifted into the evening peak, when demand is highest.
- Generation: up 2.2% in 2026 to about 4,368 billion kWh, then a further 1.7% in 2027.
- Sales: records of 4,135 billion kWh this year and 4,211 billion kWh next year.
- Drivers: data centres and manufacturing, concentrated in Texas and neighbouring states.
- Mix: natural gas remains the largest source, at 40% of generation.
- Flexibility: battery storage is approaching 52 GW, up about 70% in a year.
Outlook
The EIA will publish its next outlook on 6 October. The longer-term test is whether new generation, storage and transmission can be connected quickly enough to keep pace with demand that is now growing every year rather than holding steady.
For grid operators, the summer of 2026 has already shown what that looks like in practice: record peaks in Texas, heavy reliance on gas plants during the hottest hours, and batteries increasingly carrying the load after sunset. With consumption expected to rise again in 2027, those pressures are set to become a permanent feature of the US power market rather than a seasonal one.
Image: Kkiefuik via Wikimedia Commons, CC BY 4.0