Booming electricity use drives increased demand despite glut forecasts

The US is seeing an unexpected acceleration in power demand, forcing a reassessment of fossil fuel retirement plans, the Wall Street Journal reports. Projections for coal power plant retirements by 2035 have been scaled back by 21%, from 133,000 megawatts to 105,000 megawatts. This shift is primarily driven by the rapid expansion of AI data centers, manufacturing growth, and broader electrification trends, with data centers alone accounting for 30% of the expected demand increase.

Energy companies, caught off guard by the sudden rise in electricity needs, are extending the lifespans of aging fossil fuel plants to maintain grid reliability. Since early 2022, 36% of scheduled retirements for fossil fuel generators have been postponed, with coal-powered generators representing a significant portion of the extended capacity. This trend is compounded by delays in bringing new renewable energy projects online, with the timeline from proposal to construction more than doubling since the early 2000s.

The surge in demand is putting upward pressure on emissions forecasts, with Wood Mackenzie revising its 2050 projections to show a 7% increase. However, analysts caution that there are limits to extending fossil fuel plants due to high costs and potential impacts on consumer electricity prices. The situation presents a significant challenge for the US in meeting its carbon reduction goals, as the short-term reliance on fossil fuels conflicts with long-term clean energy objectives.