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AI Boom Threatens U.S. Power Grid, Could Reverse Clean Energy Gains
New York, NY – November 14, 2025 – The rapid expansion of artificial intelligence (AI) and the accompanying surge in data center construction are poised to dramatically reshape the U.S. energy landscape, perhaps straining electricity grids and even leading to increased reliance on fossil fuels, according to a new report from FactSet. Projections indicate considerable increases in gas burn to meet the escalating power demands, raising concerns about electricity prices and the future of clean energy initiatives.
The unprecedented load growth driven by AI is challenging utilities to maintain adequate reserve margins. FactSet’s analysis, based on Mid and High scenario projections for data center capacity over the next five years, forecasts notable increases in gas-fired electricity generation. This increased demand, coupled wiht existing pipeline constraints, could drive up electricity prices and potentially incentivize a return to coal as a means of offsetting high gas costs. Ultimately,these elevated energy costs could moderate the pace of data center progress.
The report highlights a critical intersection between technological advancement and energy infrastructure. Data centers, the physical hubs powering AI applications, are exceptionally energy intensive. Meeting this demand requires substantial investment in grid infrastructure and a careful balancing act between energy sources. The potential for increased gas burn and coal reliance represents a setback for decarbonization efforts and underscores the need for proactive planning and investment in renewable energy sources and grid modernization.
FactSet analysts note that the outcome – whether rising energy costs will significantly deter data center expansion - remains uncertain. Interested parties can register for an upcoming webinar hosted by the FactSet Energy team to delve deeper into these issues: https://www.factset.com/lp/webcast/ai-data-centers-electricity-demand. FactSet users can access the full report on data center load growth and its effects here: https://my.apps.factset.com/viewer-fusion/?_doc_id=btuot_480&_doc_date=20251104&_doc_product=NEWS_BTUOT&_doc_docfn=U2FsdGVkX18OyzuQ5LKkbCJ%2FSr2SmK4lF9f0Bq3TWOScp6aGDo31jH%2FrUTzfxllN5%2Ff38nXCw9MQ7PlzpUWgPJ0z1cDTegjgRGvW4dAxviTt%2F%2FHiOtLxAAo%2BOwlXrDQG&_app_id=NRFResearch&_appSesGUID=1f25fe1fa8c3-9404-2666-f180-60121763065871718.
Disclaimer: This data is for informational purposes only and does not constitute legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any outcome relating directly or indirectly to any action or inaction taken based on this information.
