After falling 1.6% last year on mild weather, U.S. electricity use is set to grow 1.5% per year from 2024 through 2026, driven by increased manufacturing and electrification in the transportation and building sectors, the International Energy Agency said Jan. 24.
About a third of the additional demand is expected to come from the rapidly growing data center sector, according to the agency’s annual electricity report.
In part, the anticipated demand growth is spurred by provisions in the Inflation Reduction Act and the bipartisan infrastructure law that offer incentives for electric heat pumps, water heaters and other energy saving electric appliances, the IEA said.
In September, for example, governors from 25 states and the Biden administration announced plans to quadruple the number of heat pumps in U.S. homes by 2030, to 20 million from 4.7 million, the IEA said.
Looking at last year, U.S. electricity use fell because of milder winter and summer weather compared to 2022, according to the IEA. Also, manufacturing activity fell amid a drawdown of inventories, strikes in the automotive industry and inflationary pressures, the agency said.
In Canada, electric demand fell 1% last year, but the IEA expects it will grow by about 1% annually through 2026, according to the report.
After growing 2.2% in 2023, the IEA expects global electricity use will surge 3.4% a year in the next three years, driven by growth in China and other emerging markets.
On the generation side, U.S. wind and solar production will outpace coal-fired generation for the first time in 2024.
“Installations of wind and solar are expected to increase renewable generation by around 10% annually between 2024 to 2026, although financing and supply chain issues are causing delays and cancelations of some [U.S.] projects, particularly for offshore wind,” the agency said.
It expects U.S. coal-fired output to fall by nearly 10% every year through 2026 as power plant retirements continue, although at a slower pace than in the last two years. The agency expects gas-fired generation to remain roughly the same over the three-year period starting this year.
With growing renewables and declining coal generation, the IEA said it anticipates U.S. power sector carbon emissions and emissions intensity will fall at annual rates of 4% and 5%, respectively, between 2023 and 2026.