The United States requires a consistent supply of energy to both improve Americans’ quality of life and grow the economy. Currently, the United States is shifting to clean electricity and moving away from fossil fuels to mitigate climate change and reduce the impacts of price volatility. To achieve these goals, the United States will have to create more electricity than it currently produces. Renewable energy generation is projected to increase from 21% of electricity generation in 2021 to 44% in 2050. This will help meet the demand for increased electricity, but more will need to be done. Other opportunities include expanding existing transmission abilities and streamlining the construction, deployment, and connection of new clean energy investments to the broader power grid.
The United States can also explore ways to manage energy demand more efficiently, including using virtual power plants (VPPs) that can reduce the need for new energy supply or transmission by distributing where and when electricity is used. A VPP works by drawing on a network of energy resources like the solar panels on someone’s house, WIFI-enabled heat pumps, or the battery of a plugged-in electric vehicle to meet peak demands for electricity and reduce the need to build more physical power plants. Via their smart technologies, VPPs can manage energy demand and reduce costs for consumers.
Policies like the Inflation Reduction Act (IRA) are already supporting this transition. Additional resources for long-distance, high-voltage transmission lines, increased interconnection, and grid-enhancing technologies are critical to further accelerating it.
Electricity demand is growing for the first time in a decade, with renewable sources poised to meet much of the new demand.
Estimates project that U.S. electricity consumption will grow roughly 1% per year and up to 15% over the next three decades. Electricity demand is expected to rise given the growth of industries with high electricity use—such as data centers (including for artificial intelligence), manufacturing, and chemical and hydrogen production—and because of the electrification of consumer electronic devices and home appliances.
Electric vehicle adoption could increase total U.S. electric demand by 38% by 2050, while their battery storage could also provide an immense benefit to the electric grid. The International Energy Agency recently projected that record clean energy growth from nuclear, wind, solar, and hydropower will offset this rising power demand. In the United States, projected increases in renewable energy consumption between now and 2050 should more than account for projected energy consumption increases, per EIA data shown below. Nuclear energy also provides essential baseload power—generation that can run around the clock—which is especially important when extreme weather events threaten the grid.
