The US energy policy landscape underwent a significant shift in 2025 with the enactment of the One Big Beautiful Bill Act (OBBBA) and issuance of related executive orders. At the same time, demand for electricity in the US is expected to trend upwards after nearly two decades of being relatively flat, driven by the data center build-out, electrification and the onshoring of manufacturing. While the policy shift has created headwinds and bankability issues for renewables developers, demand for renewables projects is expected to continue to grow with the continued load growth spurred by data centers and electrification. Demand concerns and the need for energy reliability have also triggered a resurgence of interest in conventional energy and baseload power generation.
The Demand Squeeze
The International Energy Agency predicts around 40 percent growth in global demand for electricity by 2035, driven in part by advanced manufacturing, electric mobility and data centers. Electricity demand in the US is expected to increase dramatically as well, after nearly two decades of flat growth, driving an expansion in generating and storage capacity. Meanwhile, interconnection delays, which have been plaguing the US energy industry, have continued, and shortages of key equipment have become more pronounced.
Retail electricity prices in the US have already been increasing, in part a result of capacity prices increasing for regional transmission organizations (RTOs), which must contract for that capacity with generators. As the project costs for new build increase for developers, the cost to RTOs for that capacity has begun to climb accordingly – and in some cases dramatically, as reflected in a 22 percent increase in PJM capacity prices during 2025.
Local distribution utilities and other load serving entities will ultimately pass those higher prices onto retail consumers in the form of higher electricity prices. This has prompted stakeholders in the industry to think creatively about ways to more efficiently bring large loads online, although ready solutions remain elusive, as evidenced by PJM’s launch, and then abandonment, of a proposal to fast-track large loads such as data centers through mandatory curtailment.
