Stagnant power demand undermined then-President Donald Trump’s pledge to save coal in his first term. Now, soaring power needs could boost his energy agenda when he returns to the White House later this month.
Analysts estimate that electricity use will skyrocket in the coming years, as artificial intelligence and data centers consume more power. That trend could boost consumption of fossil fuels, slow emissions reductions and hand Trump a political victory.
The last time he was in power, demand for electricity was essentially flat due to energy efficiency and broader economic trends like the outsourcing of domestic manufacturing. Increased competition from low-priced natural gas and renewables effectively pushed coal plants into retirement, no matter what Trump promised to do to save the industry.
But the situation is different today. Utilities are rushing to build new power plants to meet growing power needs.
“Right now the big energy story is how are we going to power these data centers,” said Joshua Rhodes, a research scientist at the University of Texas at Austin who studies the power sector. “Drill baby drill might turn into power baby power.”
Trump did not make coal a talking point of his campaign last fall. But he has continued to champion fossil fuel development, particularly oil and natural gas. U.S. oil production is already at record levels and American companies might be reluctant to accelerate drilling, lest they flood the market and send prices tumbling. There are also signs that electric vehicles could dent global oil demand, especially in China.
But if the outlook for oil is murky, the forecast for natural gas is rosy.
Gas is now the primary engine of U.S. power generation, accounting for more than 40 percent of electricity production last year. More gas is likely needed to keep up with rising demand.
A report backed by the Department of Energy reckons that the power needs of data centers could triple by 2028. Another report, by Grid Strategies, a consulting firm, found that five-year demand projections have skyrocketed from 23 gigawatts in 2022 to 128GW last year. It came amid warnings from the North American Electric Reliability Corp. that large swaths of the country’s power grid are at increasing risk of blackouts.
All of it points to the need for more gas, a trend that Trump has embraced.
GE Vernova recently told investors it had booked 9 gigawatts of new orders for gas turbines in 2025 and 2026. The U.S. averaged 5.7GW of new combined-cycle gas capacity from 2020 through 2023, according to the Energy Information Administration. Combined-cycle plants are the workhorses of the gas generation fleet.
Technology companies, which have long been major drivers of renewable energy growth, have started to use gas to meet their power demands. In November, Meta announced a plan to power a massive new data center in Louisiana with a $3.2 billion expansion of natural gas generation.
“In a world where we are not seeing demand growth, we can make up a lot of [power plant] retirements with just wind and solar,” said Harrison Fell, an associate professor at North Carolina State University who studies power markets. But that is harder in the current environment, he said.
“We need to not only keep what we have, but build more gas,” Fell said.
The rise in power demand could also offer a lifeline to aging coal facilities that otherwise would be headed toward retirement. Utilities will be loath to close coal plants as they struggle to keep up with demand, analysts said.
Signs of the energy shift are already apparent.
Vistra Corp. announced last month it would postpone the retirement of its Baldwin Power Plant, a 1,185 megawatt coal plant in Illinois, from 2025 to 2027. The decision came on the heels of a similar postponement in Wisconsin, where a trio of utilities said they would delay the planned conversion of an 1,110MW coal plant to natural gas from 2026 to 2029. And in Maryland, federal regulators approved a plan last year to keep a coal plant running through 2028 after the regional grid operator said its closure would jeopardize grid reliability.
“Demand has come on so much faster than the ability to supply the power and that is creating the pinch point we’re having right now,” said Andy Blumenfeld, an analyst who tracks coal markets at McCloskey by OPIS.
Yet the boom in U.S. power demand hasn’t yet materialized, at least nationally. Power demand is rising in states like Texas and Virginia. But total U.S. electricity consumption last year was 4,186 terawatt-hours, or 3 percent above 2023 levels and 4 percent above 2019 levels, according to preliminary data by the Energy Information Administration. Those figures are more closely aligned to the modest annual increases of recent decades than the massive spikes projected by many analysts.
Demand may ultimately be lower than forecasts suggest, Fell said. Utilities often over-project demand and some forecasts could be inflated by the actions of data center developers, who are racing to secure power contracts, he said.
Even if the demand boom materializes, it could bring complications for Trump. Rising demand could benefit fossil fuels — but also renewables such as solar and battery storage, both of which are growing rapidly. Domestic energy needs will also have to be balanced against growing exports of liquefied natural gas, another Trump priority.
In a recent note, S&P Global Commodity Insights said a spike in LNG exports would put “significant strain” on the domestic gas market “as feedgas demand picks up faster than production can respond.” The consulting firm predicted that Henry Hub, the benchmark for U.S. natural gas prices, would increase to more than $4 per million metric British Thermal Units after averaging less than $3 MMBtu this year.
That increase would show up on electric bills.
In climate terms, rising power demand is likely to slow efforts to cut greenhouse gas emissions. U.S. carbon dioxide levels trended downward during Trump’s first term, when roughly a fifth of the U.S. coal fleet retired. Renewable installations are likely to continue under Trump in the coming years, and the country may get a further boost in low carbon electricity production by restarting two nuclear power plants. But those cleaner energy sources will likely go toward satisfying rising electricity demand rather than offsetting dirtier sources of power.
“I think we’re going to slow down the reductions in carbon emissions from the power sector,” said Blumenfeld, the analyst. “We’re up against this new demand for electric power from data centers and everything else. This is the dilemma we’re in right now.”
The future of U.S. power may hinge as much on technology companies as Trump. Tech giants like Google, Amazon and Microsoft have been large buyers of renewable energy. In recent years, they have started to branch out. Some are dabbling with nuclear power, restarting mothballed power plants, or supporting advanced reactors as a way to meet their climate goals and feed their power needs, Rhodes said. Others are experimenting with geothermal technology, or exploring natural gas.
“They are the ones in the driver seat here. They all have varying degrees of clean goals and targets,” said Rhodes, the University of Texas researcher. “Do we do this with more natural gas combined cycles or do we do this with cleaner technologies like nuclear or geothermal, which both require a lot of development very quickly, or the technologies we have, like renewables and storage. That is the main question.”
