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National Real Estate Advisors

Economic Insights: The Coming Growth in American Power

Written By National’s Head of Research and Analysis, Darob Malek-Madani 

U.S. electrical utilities are facing a challenge they haven’t encountered in two decades: adding significant new power supply to meet demand. Over the past 20 years, demand for electricity in the U.S. has grown only modestly, driven in part by the widespread adoption of energy-efficient appliances, industrial equipment, and building systems, as well as the offshoring of mass industrial processes. But that trend is set to change. Goldman Sachs now predicts a 35% increase in U.S. electricity demand over the next decade, a sharp contrast to the 8% growth seen over the previous 20 years. 

Chart of total U.S. electricity usage over time. From 2004 to 2023, total U.S. electricity usage increased just 0.5% annually. Both Goldman Sachs and the North American Electric Reliability Corporation (NERC), a utility industry nonprofit, project significantly faster growth going forward.

Where is the demand coming from? 

This anticipated surge is driven by the accelerating electrification of industries, onshoring of manufacturing, electric vehicle adoption—and particularly—the growing electricity requirements of data centers and artificial intelligence (AI). Forecasts suggest that the data centers and the demand from AI uses will be one of the main drivers of new investment. In fact, the Goldman Sachs analysis predicts that data centers may grow from less than 2% of U.S. electrical usage today to perhaps 4% by the end of this decade, making up over 20% of the increased demand. 

Chart of total U.S. data center electrical demand. Goldman Sachs projects 15% annual growth in data center demand over the next six years half of which is projected to come from AI uses.

What does this mean? 

The forecast suggests a transformative period for the U.S. power sector, requiring significant infrastructure investments and grid modernization to meet projected electricity consumption. Additionally, factories, electric vehicles, and data centers will increasingly compete for limited power resources, driving up prices and benefiting utilities and users with long-term power contracts already in place.