The expected surge in electricity demand in the United States is spurring a green energy boom, even though President Donald Trump’s administration is blocking projects left and right and rolling back decarbonization policy. Power prices could more than double upon the expiration of the clean energy subsidy mechanism.
S&P Global Energy expects new solar and wind capacity in the US to total almost a third more and nearly 50% more, respectively, than last year, FT reported. The numbers drastically defy President Donald Trump’s attempts to stifle green energy growth.
The administration in Washington DC is primarily hostile to offshore wind. But after the courts annulled the halts it imposed, it turned to negotiations. The US has agreed to pay almost USD 4 billion in total to several developers to quit their leases and rights. However, they accepted to redirect the funds to fossil fuels.
The latest and largest deal, USD 1.22 billion, was with Germany-based RWE. Its three zones were offshore California, New York and Louisiana.
AI, electric cars bolstering electricity demand
Clean energy expansion, seen at an all-time high 45 GW this year in the US, is mostly driven by the trend of rising power demand, the article notes. The jump would be a quarter higher than the record, set in 2024.
The biggest factors are data centers, artificial intelligence and the electrification of transportation and other segments of life. ICF calculated that power consumption in the United States in 2035 would be 39% bigger than last year.
Global growth in renewables capacity has been covering the rise in electricity demand for a few years now, and growing its chunk of the market. On the other side of the fence are gas power plants, with a surge in investments.
Subsidy expiration is set to push power prices higher, which is another investment incentive
The US government is reversing decarbonization policies. The previous administration’s Inflation Reduction Act carries hefty subsidies, which expire this year and next. Electricity prices are expected to advance betwen 40% and 120%, the media outlet wrote.
Notably, it would also be an incentive for investments, including in renewable electricity. In the meantime, developers rushed to get their projects going before the clean energy programs end, which explains the boom in capacity deployment.
