The ICF expects electricity demand to grow by 25% and nearly double by 2050. In the previous two decades, US electricity demand was flat. The ICF’s report, Rising current: America’s growing electricity demand, was published last week and calls for continued use of demand-side management programs as well as increased investment in grid capacity. Meanwhile, President Trump’s self-styled “One Big Beautiful Bill” would roll back $522 billion worth of incentives for clean energy projects, primarily in Republican states. That bill passed the House on May 22 and is now with the Senate.
The ICF now projects a growth rate in US electricity demand of 2.2-3.2% per year through 2050. That’s roughly double the annual growth rates that ICF had projected as recently as Q1 2023. Areas such as the mid-Atlantic, Texas, Nevada, Georgia, and parts of California are projected to see higher growth. Data centers, building electrification, semiconductor manufacturing, and electric vehicles manufacturing will drive 35% of the projected load growth through 2040.
That kind of demand growth creates obvious challenges for load management. Where will the grid capacity come from? According to the ICF report, battery storage, solar, and onshore wind are expected to provide over 50% of the US’ total installed generation capacity by 2050.
However, the uncertainty associated with making investments in clean energy now may cast a chill over developers, impacting future capacity and grid stability. The bill that passed the House on Thursday requires that projects break ground within 60 days of the bill’s signing to qualify for clean energy credits. As a practical matter, the “break ground” date is often not in developers’ control due to environmental and other reviews.
Some clean energy projects have already been impacted, with significant hits to developers’ pockets. Last month, federal officials issued a stop-work order on a $5 billion wind farm off the coast of Long Island. The project, begun after a four-year environmental review, is 30% complete. The administration reversed this order after a month of heavy pressure from NY Governor Kathy Hochul. When finished, the project is expected to provide electricity to 500,000 New York Homes.
Balancing demand and supply ensures electric grid reliability. A “reserve margin” (grid capacity exceeding peak demand) of 15% is considered healthy. Today, the implied reserve margin in the US is about 24%. However, ICF projects that much of the US will experience below target reserve margins as soon as 2030.
We are at a turning point for grid reliability and electricity demand management. Demand grows unabated, fueled by data centers, electric cars, and building electrification, while increased uncertainty risks reducing investment in clean energy capacity. Mysa works closely with utilities across North America. Our smart thermostats for electric baseboard heaters and heat pumps are deployed to help keep consumers comfortable and the electricity grid reliable. Contact our utilities team to learn more about how Mysa can help with your residential utility load management strategies.