Electricity demand expected to jump by more than 75% by 2050 as costs rise, report says

A dramatic demand for electricity, coupled with a rise in costs, could create massive energy challenges for the United States over the next two decades, a new report released Tuesday by ICF found.

The global consulting and technology services company predicted that electricity demand could jump at least 25% in the next five years and as much as 78% by 2050 — findings that far outpace historical trends over the past two decades. Such growth could have a significant impact on both the reliability and affordability of electricity, the report said. Retail costs are also expected to rise; by 2050, costs passed onto the consumer could double, ICF found. 

“This is a pivotal moment as rising demand creates urgent challenges for the grid,” said Anne Choate, ICF executive vice president for energy, environment and infrastructure in a statement.

The U.S. could struggle with increased electricity demand due to rising temperatures and the growing use of emerging technologies, bearing down on an overloaded system. The report found that in Texas, nearly one-third of the expected increase is attributable to large load sources, such as cryptocurrency mining operations. Data centers, building electrification and semiconductor manufacturing, along with electric vehicles, account for 35% of the projected load through 2040 in 13 mid-Atlantic and Midwest states as well as Washington, D.C.

Electric grid operators across the U.S. have been sounding the alarm in advance of elevated summer temperatures after record-breaking heat last year. The World Meteorological Organization said in its annual State of the Global Climate report that 2024 set a new global temperature record, averaging over 1.5 degrees Celsius above pre-industrial levels. The National Weather Service released a report last week predicting hotter-than-normal temperatures across the United States from June through August. 

PJM, one of the country’s largest electric grid operators, serving 67 million people in states including North Carolina, Pennsylvania, West Virginia and Michigan, warned customers in a news release that the system will be experience a high peak demand this summer.

“This outlook at a record peak heat scenario reflects our years-long and mounting concerns as we plan for enough resources to maintain grid reliability,” said Aftab Khan, PJM’s executive vice president of Operations, Planning & Security, in a statement. The operator stressed it had adequate resources to respond to the demand and said it is planning for unusual scenarios and will react to them to “protect the electricity supply.”

Electricity costs are also expected to rise and outpace inflation, with experts predicting a jump of 6% in 2025 — an average of $784 per household for the summer period. That would mark a 12-year record, according to a new analysis from the National Energy Assistance Directors Association. Households are not only expected to have to pay higher prices for electricity, they will likely consume more of it than they did last summer because of the need for more cooling.

NEADA Executive Director Mark Wolfe told CBS News’ MoneyWatch, “when electricity prices go up, they tend to stay high. “

Megan Cerullo

contributed to this report.