Unprecedented growth in electricity demand is being driven by data centers, AI, and industrial electrification, particularly in regions like Texas. Forecasts from grid operators and transmission providers suggest a potential doubling or tripling of demand in just a few years, a scale of growth not seen in decades.
The boom in demand has created a massive order backlog for natural gas turbines, with orders for 2028 delivery (100 GW) far exceeding global production capacity (~60 GW). This scarcity, coupled with inflationary pressures, is causing the capital cost of new gas plants to double, a trend also seen in equipment like transformers.
China has aggressively electrified its economy over the past three decades, quadrupling its electricity share of final energy consumption to 30%, far surpassing the relatively flat 22% in North America. This is driven by industrialization and a geopolitical strategy to achieve energy sovereignty by generating power domestically, even if from imported coal.
While the US narrative is dominated by data center demand, the global picture is more diverse. The IEA projects that industrial electrification, transport, and even basic appliances in developing economies will be larger contributors to global electricity demand growth through 2030.
Keep pulling the thread on Nat Bullard.