EIA Forecast: Power Demand to Climb Through 2027

After years of relatively flat electricity usage, the U.S. power sector is entering its most sustained growth phase in over two decades—and the catalyst is no longer residential expansion or legacy manufacturing. According to the U.S. Energy Information Administration’s January 2026 Short-Term Energy Outlook, electricity demand is set to grow through 2027, marking four consecutive years of expansion for the first time since 2007.

The rise is being fueled by rapid deployment of digital infrastructure. Power-hungry computing facilities—especially data centers—are changing where, how, and when electricity is consumed. These facilities, often clustered in regions like Texas, Virginia, Georgia, and Ohio, are shifting load patterns and presenting new challenges for grid planning and transmission capacity. In Texas alone, the West South Central region is expected to account for nearly half of the commercial sector’s electricity growth by 2027.

What sets this phase apart is its structural nature. Unlike cyclical rebounds of the past, today’s load growth is shaped by decisions made by hyperscale operators and industrial developers. That means traditional planning assumptions—based on population growth or economic cycles—are quickly becoming outdated.

Generation Mix Balances Reliability and Transition

The supply side is undergoing its own transformation, with renewables surging while natural gas maintains its central role. Solar power is expected to add nearly 70 gigawatts of new capacity through 2027, boosting generation by over 20% annually. Wind will see more gradual gains, while coal-fired output continues to retreat.

Natural gas, however, remains the grid’s foundation, providing close to 40% of generation. While gas-fired output will stay mostly level in 2026, it’s expected to increase modestly in 2027, providing the flexibility needed to back up intermittent renewables. This dynamic becomes increasingly important as data centers run intensive, round-the-clock operations that don't follow traditional peak usage curves.

On the cost front, electricity prices are expected to remain relatively stable for consumers even as usage rises. Crude oil prices are projected to fall, pushing average U.S. gasoline prices below $3 per gallon. Natural gas prices will likely stay flat in 2026 but rise sharply in 2027 as domestic and export demand tighten supply.

Meanwhile, energy-related CO₂ emissions are forecast to edge down in 2026 and stay flat into 2027. Coal plant retirements and lower oil consumption are helping offset the additional emissions associated with growing electricity production—keeping the emissions intensity of the power sector in check despite rising demand.