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U.S. wholesale electricity prices are rising fast amid forecasts for summer heat that will drive demand higher, especially in the East.
Prices in Boston topped $400 per MWh at one point on Tuesday, Reuters reported, up from $50 per MWh earlier in the day. According to grid operator PJM Interconnection, which is the largest in the country, expected demand to hit 160 GW on Monday, declining to 158 GW on Tuesday and further to 155 GW on Wednesday as the heat retreats.
The Energy Information Administration predicted at the end of 2024 that electricity demand in the United States would hit a record in 2024 and 2025. Then, earlier this year, the EIA extended this record-breaking forecast to 2026, saying it would be driven by exploding consumption from the information technology sector amid its AI race.
For this year, the EIA forecast electricity sales of 1.517 trillion kWh for residential consumers and 1.474 trillion kWh for commercial consumers. Sales to industrial consumers were seen at 1.064 trillion kWh.
Most of that surge in demand has been met with natural gas generation, and the trend is set to continue. U.S. power-generating companies are announcing plans for the highest volume of new natural gas-fired capacity in years as the AI boom drives demand for electricity.
According to the EIA, however, the share of natural gas in total generation will slip a little from 42% last year to 40% this year, while the share of coal remains stable at 16%.
By 2035, data centers are set to account for 8.6% of all U.S. electricity demand, more than double their 3.5% share today, BloombergNEF predicted in a report earlier this year. U.S. data-center power demand will more than double over the next decade, rising to 78 GW in 2035 from nearly 35 GW in 2024.
