Five Key Takeaways: Planning for Growing Electricity Demand During an Era of Uncertain Renewables and Climate Policy

Demand for electricity is surging in the United States. This rapid growth is being driven by new energy-intensive technologies such as artificial intelligence and the reshoring of manufacturing spurred in part by the federal Inflation Reduction Act.

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Energy Pathways USA, an initiative led by the Nicholas Institute for Energy, Environment and Sustainability at Duke University, conducted an analysis of how electricity demand may change in the next decade and the potential impact on greenhouse gas emissions. The analysis used integrated resource plans—developed by public utilities to determine how best to meet customers’ future energy needs—to model a variety of scenarios compared to earlier forecasting from the U.S. Energy Information Administration.

The modeled scenarios focus on electricity demand growth, natural gas prices and two key public policies. The results of the 2024 election raise doubts about the durability of a recently published Environmental Protection Agency (EPA) rule that sets stringent standards for greenhouse gas emissions from fossil fuel-fired power plants. The surge in energy demand also comes at a time when utilities are facing lengthy delays in connecting new resources—particularly renewables such as wind and solar—to the power grid.

Here are five key takeaways from the analysis:

1. Significant new investments will be needed over the next decade to respond to high electricity demand growth. The form of these investments will determine U.S. greenhouse gas emissions trends through at least mid-century. A number of critical policy developments will control how these investments are distributed between fossil-fuel and renewable power generation.

2. Even with a focus on clean energy investments, the anticipated demand growth will likely make future emissions significantly higher than previously thought. Compared with expectations of just a few years ago, emissions are forecast to be 30 percent higher by 2035 than they would have been in a lower-growth environment.

3. The ability to build new renewables and connect them to the grid will be critical in reducing future emissions. Renewables will need to connect to the grid at annual rates well beyond the maximum rates seen in the historical data to take full advantage of their potential to lower emissions. If they are not able to do so, natural gas combined-cycle units are likely to supply much of the coming electricity demand growth.

4. A potential reversal of the EPA rule under the incoming Trump administration would result in much higher emissions. Retirement of existing coal units, or their installation of carbon capture and storage, plays a major role in lowering future emissions. In addition, eliminating requirements for new gas investments would shift future generation toward combined-cycle units, at the expense of solar and wind investments.

5. Cheaper natural gas would have a modest effect on the energy mix. Lower prices would lead to some shifting away from renewables in favor of natural gas generation. However, the modeling suggests the EPA rule and how quickly renewables can be connected to the grid may override the market effects of natural gas prices.

“The quest to build a U.S. economy with net-zero carbon emissions has reached a critical point,” said lead author Martin Ross, senior research economist at the Nicholas Institute. “Even with rising electricity demand, every scenario that we modeled shows emissions declining through 2050 as renewables make up a greater share of the energy mix. How deep those reductions go depends on policy choices that the next administration will make.”

About Energy Pathways USA

Energy Pathways USA is accelerating progress toward a net-zero carbon future by developing workable solutions with public- and private-sector partners across multiple key industries.

Convened by the Nicholas Institute, Energy Pathways USA brings together experts from diverse sectors and organizations to explore and analyze current and proposed federal, state and regional policy incentives and the broad range of their potential impacts, including on emissions, costs, technology and consumer behavior. By advancing cross-sectoral dialogue based on robust policy, technology and modeling analyses, this partnership aims to develop actionable pathways to accelerate an equitable energy transition.

Energy Pathways USA works in collaboration with the Energy Transitions Commission as an autonomous regional initiative of that global effort. The initiative is aligned with the goals of the Duke Climate Commitment, which unites the university’s education, research, operations and external engagement missions to address climate challenges.

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CITATION: Ross, M, J. Ewing, B. Murray, T. Profeta, R. Stout, and M. Yoo. 2024. Planning for Growing Electricity Demand During an Era of Uncertain Renewables and Climate Policy. NI R 24-06. Durham, NC: Nicholas Institute for Energy, Environment & Sustainability, Duke University. https://nicholasinstitute.duke.edu/publications/planning-growing-electricity-demand-during-era-uncertain-renewables-and-climate-policy. 

For media inquiries, contact the Nicholas Institute communications team at ni-comm@duke.edu.