- U.S. electricity demand is accelerating after decades of flat growth, led by data centers, electrification, and reshoring, straining grid capacity and reliability.
- Meeting demand requires massive investment (over US$1.4T through 2030), but interconnection backlogs, equipment lead times, extreme weather, and policy volatility are slowing buildout.
- AI is becoming core to energy operations and planning, improving forecasting, asset optimization, and supply-chain visibility while also raising peak-demand needs.
- Workforce shortages and skill gaps are a growing constraint, with over 1.7M energy workers needing upskilling or reskilling to support digital and operational shifts.
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Recent Deloitte Insights and other authoritative sources paint a picture of an inflection point for the U.S. Energy & Industrials sector. 2025 (and beyond) is seeing demand-side pressures—primarily from electrification, AI, and industrial reshoring—that are reshaping investment priorities, operational models, and workforce strategies.
On the demand front, utilities are responding to sustained growth after decades of stagnation. In addition to electrification for transportation and buildings, enormous power demands from data centers (both AI-focused and for crypto) are accelerating, with Deloitte projecting data center electricity demand could reach between 515-720 TWh by 2030, up from ~180-290 TWh in 2024.. But supply-side challenges—like protracted delays in grid interconnection (two terawatts waiting in queues), modest baseload additions, and increased risk from extreme weather—are creating a widening gap between demand forecasts and reliable supply.
AI and automation are now central to resilience and efficiency. According to the 2026 Energy Industry Trends report, AI is reshaping both the demand profile (peak demand rising ~26% by 2035) and operations—real-time grid coordination, forecasting, asset optimization, and supply-chain visibility are growing beyond pilot projects. Oil & gas firms are projected to direct ~57% of IT spending toward AI by 2029 (up from ~23% in 2025), with process digitization a major area of investment.
Capital deployment faces both opportunity and constraint. The sector needs over US$1.4 trillion in investments through 2030 in the power domain alone. But escalating material and financing costs, policy volatility (especially recent clean energy incentive revisions), and supply chain disruptions are forcing more disciplined capital strategies. M&A activity and portfolio rotation are becoming more prominent tools to reallocate risk and focus on scalable, higher-return investments.
Finally, workforce issues are emerging as a strategic concern. Despite expected growth in energy & chemicals employment (4.1% by 2033), more than 1.2 million workers must be upskilled and over half a million reskilled to handle new technologies, complex regulations, and evolving operations. High rates of attrition, retiring workers, and competition from tech sectors intensify the challenge. [0search0]
Strategic implications for executives include: forging deep collaboration between utilities and data center operators; accelerating projects that offer “firm” capacity; integrating AI across asset and performance management; adopting modular and flexible capital deployment models; and prioritizing workforce development programs now to avoid capability gaps.
Open questions include how policy shifts (federal and state) will affect incentive structures; whether interconnection queue reforms can accelerate renewable integration; how utilities will manage rising customer affordability pressures; and how industries and government will balance tradeoffs between speed of deployment and environmental, labor, and safety concerns.
Supporting Notes
- Electricity demand in the U.S. rebounded 1.8% in YTD 2024 after a 1.7% decline in the same period in 2023; data center electricity demand is projected to grow from ~180-290 TWh in 2024 to 515-720 TWh by 2030.
- Peak demand projected to grow approximately 26% by 2035; data center demand is projected to be 176 GW by 2035—five-fold from 2024; industrial electrification to add ~25 GW by 2030.
- Renewables made up 93% of new generation capacity additions through July 2025; solar and storage alone accounted for 83%; yet two terawatts remain in interconnection queues.
- Utilities’ capital expenditures expected to hit US$174 billion in 2024 with 42% directed toward transmission & distribution.
- Disk-like supply delays: transformer lead times climbed from ~50 weeks in 2021 to ~120 weeks (and up to ~210 weeks for larger units) in 2024.
- Through Q3 2025, U.S. crude oil production rose to 13.6 million barrels per day; natural gas production likewise projected to record highs.[news13]
- AI spending in U.S. oil & gas companies expected to grow from ~$4 billion in 2025 to over $13 billion in 2029; 57% of IT spending in oil & gas companies forecast for AI by 2029.
- Energy & Chemicals (E&C) employment set to rise 4.1% by 2033; over 1.2 million workers need upskilling, 534,000 need reskilling.