Why Electricity Demand Is Rising From Every Direction

For more than a decade, U.S. electricity demand barely moved. Between 2005 and 2019, demand increased by an average of just 0.1 percent annually.

That period is over.

From 2020 through 2025, U.S. electricity demand grew approximately 1.7 percent per year. EIA expects demand to continue rising through 2027, producing the strongest four-year period of electricity-demand growth since 2000.

The important part of this story is not simply that the country needs more electricity.

It is that more industries need more electricity at the same time.

Artificial intelligence is driving massive investment in data centers. Manufacturers are building and modernizing facilities. Communities continue expanding. Transportation and industrial processes are becoming more electrified. Oil and gas operations are adding more automation, communications, measurement, monitoring, and electrically powered equipment.

Each trend creates a legitimate need for power. Together, they are changing what utilities must plan for and how quickly they must respond.

For midstream operators, that matters even when an individual site has a relatively small electrical load. A measurement station or communications node may not consume anything close to what a data center requires, but it can still depend on utility infrastructure, transformers, engineering resources, and construction schedules operating under increasing pressure.

Everyone wants more power.

The question is whether it can be delivered where and when each project needs it.

AI Is Driving Demand, but It Is Not the Whole Story

Data centers have become the most visible symbol of the new electricity-demand cycle.

In 2023, data centers consumed approximately 4.4 percent of total U.S. electricity. Lawrence Berkeley National Laboratory estimates that their share could reach between 6.7 and 12 percent by 2028 as conventional computing and AI workloads expand.

The challenge is not only how much electricity they consume. It is how concentrated that demand can be.

A large data center may request tens or hundreds of megawatts at one location. Multiple facilities can cluster within the same utility territory because they are seeking land, fiber connectivity, development incentives, and access to power.

Texas demonstrates the scale of that pressure. As of June 2026, ERCOT was tracking more than 438,000 MW of large-load connection requests, with nearly 89 percent associated with data centers. ERCOT has since implemented a batch process for qualified projects of 75 MW or greater so it can evaluate available grid capacity and required transmission upgrades collectively.

Not every one of those projects will ultimately connect. But utilities still have to evaluate them while planning for other forms of growth.

Manufacturing expansion is adding large, long-term industrial loads. Electrification is moving more transportation, building systems, pumps, compressors, machinery, and other equipment onto the grid. Population growth continues to add homes, hospitals, businesses, water systems, and public infrastructure.

DOE identifies data centers and AI, domestic manufacturing, and broader electrification as leading drivers of the current acceleration in electricity demand.

This is not one sector creating one isolated problem.

It is several major forms of growth occurring simultaneously.

More Demand Creates Pressure Beyond Electricity Itself

More generation does not automatically mean more power is available at every location.

Electricity still has to reach a project through transmission lines, substations, transformers, feeders, and local service infrastructure. Capacity can exist somewhere on the broader system while the infrastructure serving a specific site remains constrained.

Projects can also feel demand pressure without directly competing for the same electricity.

They may be competing for:

• Transformers and switchgear
• Utility engineering resources
• Line crews and contractors
• Construction windows
• Substation capacity
• Infrastructure investment

DOE has identified distribution transformers as a particular challenge. These transformers serve every category of customer, and demand is increasing because utilities must both serve new loads and replace aging equipment. DOE estimates roughly 55 percent of distribution transformers currently in service are more than 33 years old.

The constraint, therefore, is not always the amount of electricity being generated.

Sometimes it is the ability to study, procure, build, and connect everything required to deliver it.

That distinction matters for project planning.

“Power is available” can mean power is available today. It can also mean power will be available after a transformer arrives, after a line extension is completed, after a substation upgrade, or several years after the project is otherwise ready.

Those are very different versions of available.

Midstream Is Part of the Demand Story

Midstream infrastructure is also becoming more electrically dependent.

Pipeline operations increasingly rely on RTUs, PLCs, SCADA systems, communications equipment, flow computers, measurement systems, gas analyzers, valve controls, remote monitoring, security systems, and other electronic equipment.

These loads may be small compared with a data center or industrial plant.

Their operational importance is not.

A communications node may draw relatively little power while supporting connectivity across multiple field locations. A flow computer may consume little electricity while producing commercially important measurement data. A valve actuator may remain idle most of the time but must have sufficient power available when it is called to operate.

Solarcraft works directly with these types of loads, including SCADA and RTU systems, measurement equipment, communications, gas analyzers, instrumentation, motors, and remote valve actuation.

This creates a unique challenge for midstream.

Its own dependence on electricity is growing while many of its assets are located far from convenient utility service.

A remote measurement station or block valve site may require only modest power, yet connecting it to the grid could involve a lengthy distribution extension, transformer, easements, road or railway crossings, and utility construction.

Solarcraft recently documented one such case involving a midstream natural gas operator evaluating a mainline valve application in New Mexico. Availability and cost constraints associated with line power helped drive the operator to evaluate an alternative solar and hybrid power architecture instead.

That example illustrates the larger issue:

A small load does not always mean a simple power problem.

Growing Demand Changes When the Power Conversation Should Happen

When utility power could largely be assumed, project teams could afford to address it later.

That becomes riskier in an environment of increasing demand, equipment constraints, and more complicated utility schedules.

Power planning should begin while the project still has alternatives.

Teams need to understand the actual operating load, startup requirements, reliability needs, future expansion, required commissioning date, and what the utility must complete before service becomes available.

The objective is not to assume utility service will be late.

It is to know what happens if it is.

That gives project teams time to evaluate phased operation, bridge power, backup systems, or permanent remote-power strategies before electricity becomes the last unresolved dependency on an otherwise completed project.

Where Solarcraft Fits

Utility power remains the right long-term solution for many projects.

Solarcraft becomes relevant when utility access does not align with the project’s location, schedule, reliability requirements, or economics.

Solarcraft designs and builds off-grid, hybrid, grid-connected, and UPS power systems for critical oil and gas applications. Those systems can integrate power generation, batteries, controls, automation, communications, measurement equipment, industrial enclosures, testing, commissioning, and field support around the needs of the actual application.

For midstream operators, that creates another path when a small but critical remote load cannot reasonably wait for utility infrastructure.

The goal is not to replace the grid everywhere.

It is to make sure the grid is not the only strategy available when critical infrastructure needs power now.

Key Takeaways

• U.S. electricity demand is growing again after more than a decade of relative stability.
• AI and data centers are major drivers, but manufacturing, electrification, population growth, and industrial activity are also adding demand.
• More demand creates pressure not only on generation but on transformers, utility engineering, construction resources, and local infrastructure.
• Midstream assets may consume relatively little electricity while supporting critical communications, measurement, control, and safety functions.
• Remote locations can make small loads difficult or expensive to connect to utility service.
• Earlier power planning gives projects more options when utility timing, cost, or geography does not align with the operational schedule.
• Solarcraft provides engineered alternatives for critical midstream loads when traditional utility service is not the best fit.

Ready to Continue the Conversation?

Electricity demand is rising from nearly every direction, and utility infrastructure cannot always expand on the same schedule as critical projects.

Continue exploring the Power Without Waiting series to learn how changing power conditions are creating new risks for midstream planning, construction, and operational readiness.

Sources

1. U.S. Energy Information Administration. “Fossil Generation Could Rise With Faster-Than-Expected Growth in Data Center Power Demand.” March 12, 2026. Supports historical and recent U.S. electricity-demand growth rates.
2. U.S. Energy Information Administration. “EIA Forecasts Strongest Four-Year Growth in U.S. Electricity Demand Since 2000, Fueled by Data Centers.” January 13, 2026. Supports the near-term U.S. demand outlook.
3. U.S. Department of Energy. “DOE Releases New Report Evaluating Increase in Electricity Demand from Data Centers.” December 20, 2024. Provides data-center electricity-consumption estimates for 2023 and 2028.
4. Electric Reliability Council of Texas. “PUCT Approves ERCOT’s Batch Zero Process for Connecting Large Electricity Users While Protecting System Reliability for Texans.” June 18, 2026. Provides ERCOT large-load request data and explains the Batch Zero process.
5. U.S. Department of Energy, Office of Electricity. “Distribution Transformers: Preparing for Growth Demand.” December 5, 2024. Supports transformer-demand and aging-infrastructure discussion.
6. Solarcraft Inc. “CID2 & UL 508A Power Systems for Oil & Gas Applications.” Describes Solarcraft’s midstream power, automation, measurement, SCADA, analyzer, motor, and valve-actuation capabilities.
7. Solarcraft Inc. “Solar Powered Electric Actuator for Mainline Valve.” 2026 case study documenting a midstream operator’s alternative-power application driven in part by line-power availability and cost constraints.