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US Grid Constrained to Handle Expected Electricity Demand Growth of 39% by 2035, ICF Says

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US electricity demand is projected to increase by 21% by 2030 and 39% by 2035 compared to 2026 levels, but the country's electricity system has limited capacity to accommodate this growth, according to a study by consulting firm ICF International published Thursday.

During peak periods, when the grid is most stressed, demand is expected to rise by 14% by 2030 and 25% by 2035, with already constrained regions witnessing rapid data center growth expected to experience the greatest strain, the study said.

US only has 26 gigawatt or 3% of the country's total capacity as surplus generation capacity beyond its minimum reliability requirements. ICF projects spare capacity to fall to 20 GW by 2030, with a majority of it concentrated in regions having less demand from data centers.

"Total electricity demand is growing faster than peak demand because many new load sources, especially data centers, consume power around the clock. These high-load-factor resources increase overall electricity use without increasing peak demand at the same rate," the study said.

"Meeting this demand will require more than adding generation. Whether new capacity translates into reliable service will depend on the system's ability to deliver power where demand is growing. A large generation buildout is underway, but timing and scale are critical."

ICF projects generation capacity additions of 445 GW in the US from 2026 through 2030. However, only 68 GW of capacity addition is expected in 2026, while only 191 GW of peak capacity is likely from the 445 GW of planned additions.

According to the ICF, new capacity additions would not contribute equally during peak periods and the effective capacity supporting reliability will be far lower than the headline total. Capacity addition will need to ramp up quickly to keep pace with demand growth over the next few years, it added.

High growth markets served by independent system operator Electric Reliability Council of Texas and regional transmission organization PJM International have little excess capacity to meet new demand requirements beyond next year, while SERC Reliability Corporation and New York Independent System Operator could be facing similar limitations over the next few years, the study said.

In PJM, demand is projected to climb 43% by 2035 from 2026 levels, while in NYISO, total demand is seen rising 14% over the same period. Capacity is expected to drop below minimum resource adequacy levels by 2030 in areas served by SERC and NYSIO.

"The central question is no longer just how much electricity demand is forecast, but how much demand can realistically be served, and where. The answer will shape where economic growth occurs, how reliably customers are served, and what they ultimately pay," the study added.

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