Noting that after 15 years of nearly flat U.S. electricity consumption, demand has increased by 2.1% per year, on average, over the last five years, the U.S. Energy Information Administration is projecting electricity consumption will continue growing through 2050 at a rate of 0.9% to 1.6%, with data center server energy use a major factor.
Energy use in commercial buildings, home to data center activity, grows more rapidly than in the residential or industrial sectors in all modeled cases, EIA said in its Annual Energy Outlook 2026 report released April 8.
The Annual Energy Outlook 2026 explores medium- and long-term alternative futures in the United States through 2050.
“We assume AI servers will increasingly skew more energy intensive, the installed stock of AI servers grows exponentially through at least 2040, and computational efficiency will increase over time,” it said.
In its High Electricity Demand case, EIA assumes the exponential growth in AI servers will continue through 2050, and the rate of improvement in server computational efficiency will reflect historical trends.
These assumptions lead data center server energy use alone to grow to 818 billion kilowatt-hours in 2050 in the High Electricity Demand case.
Server electricity consumption in 2050 is more than 16 times that in 2020. In 2050, the High Electricity Demand case shows 84% more data center server electricity use than the Counterfactual Baseline case.
Average annual electricity consumption growth through 2050 in the High Electricity Demand (1.6%) and High Economic Growth (1.5%) cases are comparable, EIA said.
In all cases, electricity use is highest in the commercial sector. By case design, commercial buildings alone account for the incremental electricity growth in the High Electricity Demand case -- largely to meet additional data center server and space cooling demand.
“The entire economy would need to grow at the rate projected in the High Economic Growth case to match the data center-related electricity growth in the High Electricity Demand case. Data center server electricity use grows fastest in the South Atlantic and the West South Central census divisions, home to Virginia and Texas, respectively.”
Total Generation Grows Between 25% and 50%
Total generation grows between 25% and 50% through 2050 across all cases, with the most growth resulting from the cases that assume high economic growth and high electricity demand in the commercial sector, EIA said.
To meet this increasing demand for electricity, total installed electric generating capacity increases between 50% and 90% across modeled cases.
The mix of new electricity generation sources that meet this demand varies considerably depending on the assumptions within each side case, the outlook noted.
Natural gas, solar, and wind generation increasingly meet U.S. power demand across all cases examined in the report. The combined generation share of these technologies rises from about 60% in 2025 to around 80% in most cases by 2050; in a Counterfactual Baseline case, natural gas accounts for about 40%, wind for 20%, and solar for 20% in 2050.
Although the absolute amount of natural gas generation increases, its share of electricity generation generally stays flat in most cases, EIA said.
This is in contrast to coal -- in 2025, coal’s share is 16% but it declines by 2050 in all cases.
“In cases where regulations curbing greenhouse gas emissions from power plants remain in place, coal’s share declines to less than 1% by 2050; in cases where these regulations are not in place, its share declines to about 5% over the same period.”
Nuclear generation remains relatively stable in most scenarios, except for a Low Oil and Gas Supply case, in which the high cost of natural gas significantly enhances nuclear power's economic competitiveness.
However, the share of nuclear generation declines in all cases considered in the outlook, from 17% in 2025 to between 12% and 15% by 2050.
“The assumptions regarding natural gas resources and prices play a crucial role in shaping the generation mix by altering the relative economic competitiveness of other resources. We consistently observe a strong correlation between natural gas prices and electricity prices, particularly in our High Oil and Gas Supply and Low Oil and Gas Supply cases. This correlation underscores the critical role natural gas plays in setting the dispatch margin on the electricity grid.”
Future U.S. coal demand depends on environmental policy as coal plant retirements drive coal demand even lower, EIA said.
“If 2024 power-sector emissions regulations are enforced, coal generation is projected to mostly disappear from the power sector. This continues the trend of the past 15 years, during which coal power capacity was retired and replaced with natural gas and renewable generation capacity. Without the regulations, some coal-fired power remains.”
EIA projects that natural gas production will grow significantly, from 107 billion cubic feet per day (Bcf/d) in 2025 to between 133 Bcf/d and 151 Bcf/d by 2050 in most cases, driven by domestic and international demand.
Production growth is strongest in the East region, which includes the low-cost Appalachian Basin. This growth requires pipeline infrastructure buildout to move this natural gas to the U.S. Gulf Coast, the agency said.
