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US Power Sector Set for Record Gas Demand in 2027 as Data Centers Drive Growth, EIA Says

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US natural gas consumption for electricity generation is set to remain near record levels this summer before climbing to record highs in 2027, driven by surging power demand from data centers and growing electrification, the Energy Information Administration said on Thursday.

The EIA, in its latest Short-Term Energy Outlook, forecast that natural gas consumed by the electric power sector will average 43.7 billion cubic feet per day this summer, unchanged from summer 2025 and about 4% above the five-year seasonal average.

However, despite a 2% rise in overall electricity demand this summer, gas-fired generation is expected to remain flat as increased output from renewables offsets higher load growth.

The agency expects a more pronounced shift by 2027, when natural gas consumption for power generation rises 6%, or 2.4 Bcf/d, to 46.1 Bcf/d.

Trinity Manning-Pickett, applied economist at the EIA, said that figure would surpass the previous summer record set in 2024 by about 3%.

The EIA attributed the projected increase primarily to rapidly expanding commercial electricity demand, particularly from data centers and large industrial facilities in Texas and Virginia.

Manning-Pickett said these regions are driving higher consumption in the Electric Reliability Council of Texas and PJM Interconnection grids.

Commercial and industrial electricity demand in the West South-Central region is forecast to rise 20% between summer 2025 and summer 2027. The EIA also expects additional industrial load growth tied to electrification in the oil and gas sector.

To meet rising demand, the agency said ERCOT is projected to boost natural gas-fired generation by 22% over the same period, alongside significant additions in solar capacity.

Gas usage for power generation in the PJM region is forecast to rise 6%, or 9 billion kilowatt-hours, by summer 2027 compared with 2025 levels. Solar generation in PJM is also projected to climb 32% over the same period, adding 4 billion kilowatt-hours.

The EIA said the generation mix across the US power system continues to shift away from coal toward a combination of natural gas and renewables. The agency expects renewables to account for 25% of total generation by 2027, up from 21% in 2025.

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