U.S. electricity demand is set to record its strongest four-year growth streak since 2000, driven largely by the rapid expansion of data centers, according to new forecasts from the U.S. Energy Information Administration (EIA).
In its January Short-Term Energy Outlook, the EIA projects electricity consumption will rise 1 percent in 2026 and accelerate to 3 percent in 2027. This would mark the first time since 2007 that U.S. power demand has increased for four consecutive years, reflecting structural changes in consumption tied to large-scale computing facilities and artificial intelligence workloads.
According to a press release, the U.S. energy production is expected to remain robust.
“U.S. energy production remains strong, and natural gas output is expected to grow to nearly 109 billion cubic feet per day this year,” said Tristan Abbey, Administrator of the U.S. Energy Information Administration. “Natural gas supply is critical as we forecast that U.S. liquefied natural gas exports expand and electricity demand rises through 2027, driven largely by increasing demand from large computing facilities, including data centers.”
Natural gas output is forecast to approach 109 billion cubic feet per day in 2026, supporting both higher domestic power generation and expanding liquefied natural gas exports, which are projected to grow from 15 billion cubic feet per day in 2025 to 18 billion cubic feet per day by 2027. Natural gas prices at the Henry Hub benchmark are expected to average just under US$ 3.50 per million British thermal units in 2026 before rising above US$ 4.50 in 2027 as demand outpaces production growth.
The outlook also anticipates lower oil prices as global liquid fuels production exceeds demand. Brent crude is forecast to average US$ 55 per barrel in 2026, down sharply from 2025, before edging higher in 2027. Lower prices are expected to reduce U.S. drilling activity, with crude oil production reducing after reaching record levels. Retail gasoline prices are projected to fall to around US$ 2.90 per gallon in 2026 and remain relatively stable in 2027.
Renewable power generation continues to gain momentum in the US. Solar energy accounts for the largest increase, with output expected to grow more than 20 percent annually in 2026 and 2027 following significant new capacity additions. Natural gas maintains the largest share of generation at about 39 percent, while coal’s share continues to decline. Nuclear, wind, and hydropower remain stable and U.S. carbon dioxide emissions are projected to edge lower and then flatten through 2027 in the generation mix.