A new report released by the ICF on Tuesday found that sharp demand for electricity, coupled with rising costs, could pose a huge energy challenge to the United States over the next two decades.
The global consulting and technology services company predicts that electricity demand may grow at least 25% over the next five years and that electricity demand may reach as high as 78% by 2050 - a historical trend over the past two decades far outweighs the historical trend. The report said the increase could have a significant impact on the reliability and affordability of electricity. Retail costs are also expected to rise; ICF found that by 2050, consumers may double.
"This is a critical moment as demand continues to pose an urgent challenge to the grid," Anne Choate, executive vice president of energy, environment and infrastructure, ICF, said in a statement.
Due to rising temperatures and growing emerging technologies, the U.S. may struggle with increased electricity demand and reduce overloading systems. The report found that in Texas, nearly one-third of the expected increase is attributed to large sources of load, such as cryptocurrency mining operations. Data centers, building electrification and semiconductor manufacturing, and electric vehicles, account for 35% of projected loads until 2040, in 13 Midwest and Midwest states, and Washington state, DC
After record heat last summer, grid operators across the United States have been yelling alarms before summer temperatures rise. World Meteorological Organization says in its annual global climate report that new global setting is set in 2024 Temperature recordthe average industrial level exceeds 1.5 degrees Celsius or above. The National Weather Service released a report last week predicting that the overall normal temperature in the United States will be higher from June to August.
PJM is one of the largest grid operators in the country, serving 67 million people in states including North Carolina, Pennsylvania, West Virginia and Michigan.
"In the record heat scenario, this view reflects our years and growing concerns as we plan to provide enough resources to maintain grid reliability," PJM said in a statement. The operator stressed that it has enough resources to respond to demand and said it is planning unusual situations and will respond to them to "protect the power supply."
Electricity costs are also expected to rise and exceed inflation, and experts expect electricity costs to grow by 6% in 2025, with an average of $784 per household in the summer. This will mark a 12-year record, according to a new analysis by the National Association for Energy Assistance Administration. Not only are households expected to pay higher prices for electricity, but they may be more likely than last summer due to the need for more cooling.
NEADA executive director Mark Wolfe told MoneyWatch of CBS News“When electricity prices rise, they tend to stay high.”