America’s electricity demand is expected to grow 50% by 2035, and annual peak demand is expected to increase 30%. A new report from ConservAmerica and prepared by the Brattle Group reveals how expanding the energy supply, maintaining a diverse energy portfolio, and maintaining clean energy credits will be crucial for keeping costs down and supporting economic growth.
“We commissioned this report because as Congress moves forward, we want to ensure that policymakers have the benefit of real economic data about the impacts of eliminating clean energy credits,” ConservAmerica President Jeff Kupfer explained in a press release. “We know that nobody wants to raise costs on American families, stifle economic growth, or contribute to a more unreliable grid.”
What’s driving this massive increase in power demand? The report identifies several key factors reshaping America’s energy landscape:
- Manufacturing returning to American soil
- Expansion of data centers and Artificial Intelligence (AI) facilities
- Growing the electrification of industrial activity
- Increasing oil and gas production
Photo Courtesy ConservAmerica
The study also shows that maintaining current energy tax credits is crucial for keeping electricity costs down while meeting rapidly increasing demand, and changing those policies could have significant economic consequences.
American households could face a 14% increase in electricity costs, with some residents of certain states seeing annual bill increases of over $150. This would particularly impact rural and middle-income communities already managing tight budgets.
The numbers paint a stark picture of potential economic impacts through 2035 if the course is altered:
- 3.8 million job-years lost (equivalent to 380,000 fewer jobs annually)
- $510 billion decrease in GDP
- $270 billion reduction in household spending power due to higher electric costs and economic contraction
- $250 billion less in investment in American energy infrastructure due to the lack of 450 GW of renewables getting built, down by 50% and particularly affecting rural areas
The analysis shows that no single energy source can meet this growing demand alone. While renewable and energy storage projects can be deployed relatively quickly, natural gas faces supply chain constraints, with nuclear restarts and new natural gas-fired generation requiring longer development timelines. This reality makes maintaining a diverse energy mix crucial for reducing costs and maintaining reliability.
Overall, the report emphasizes that policy decisions should be based on economic data to ensure America’s energy security and economic growth remain strong.
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