AI's electricity demand is projected to surge threefold within five years; the U.S. power grid is 'not ready,' and natural gas is stepping up to play a leading role.

Artificial intelligence is pushing the U.S. power grid to its design limits. According to Goldman Sachs Research, global data center electricity demand is expected to reach 84 gigawatts (GW) by 2027—a 50% increase from 2023—with AI workloads accounting for 27% of that total. Domestically, U.S. utilities’ forecasts for summer peak demand over the next five years have surged from 38 GW to 128 GW—a more than two-fold jump within a single planning cycle. This figure signals that the U.S. grid is already nearing its capacity ceiling even before the full force of the AI wave arrives. To bridge this gap, natural gas has become the only option capable of meeting demand both swiftly and at scale. Entergy is investing $3.2 billion to build three natural-gas-fired power plants totaling 2.3 GW—specifically to supply Meta’s new Louisiana data center. Meanwhile, NextEra Energy—the largest U.S. renewable energy developer—is partnering with ExxonMobil to construct a 1.2-GW natural-gas plant in the southeastern United States. NextEra CEO John Ketchum has dubbed this trend 'BYOG'—'Build Your Own Generation'—reflecting how the AI industry is increasingly taking power generation into its own hands. Yet the cost of betting heavily on natural gas is becoming evident. The PJM Interconnection grid—which serves much of the Mid-Atlantic and Midwest—saw its capacity market clearing price for the 2026–2027 delivery year soar to $329 per megawatt, over ten times higher than the $28.92/MW level just two years earlier. The installed cost of new combined-cycle gas turbines has nearly doubled, reaching approximately $2,000 per kilowatt. Moreover, these plants—designed for roughly 30 years of operation—will significantly impact America’s carbon reduction commitments. Natural gas: the only realistic option Natural gas currently supplies about 40% of U.S. electricity, with renewables and coal making up the rest. AI data centers require round-the-clock, uninterrupted, gigawatt-scale stable power—a critical weakness of today’s grid. Renewables face hard constraints: the median interconnection wait time for newly proposed solar and wind projects exceeds four years. In contrast, natural gas is inexpensive, abundant, and supported by a nationwide pipeline network—enabling new power plants to come online within three to five years. Entergy’s three Louisiana plants for Meta’s data center alone require 2 GW just to power computational loads. NextEra and ExxonMobil’s joint project follows a 'build infrastructure first, attract tenants later' logic. Ketchum’s 'BYOG' remark effectively marks a shift in the relationship between energy companies and tech giants—from simple buyer-seller dynamics to co-developers of shared infrastructure. Grid engineering faces systemic restructuring Traditional grid planning rests on predictable load patterns—seasonal peaks, industrial cycles, and population growth—all of which can be modeled years in advance. AI has shattered that logic. Large language model training tasks mean thousands of GPUs operating at full load simultaneously for days or even weeks, followed by abrupt shutdowns; each AI inference request, meanwhile, triggers instantaneous power spikes—measured in hundreds of megawatts.

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European natural gas prices rise to three-year highs as traders rush to replenish inventories With winter approaching, traders are scrambling to refill natural gas inventories while awaiting specific details of an agreement between Iran and Oman on shipping through the Strait of Hormuz. On September 8, Europe’s benchmark natural gas futures briefly rose 3.4%, hitting their highest level since January 2023. Although Tehran says an agreement with Oman—including a temporary safe shipping lane—is imminent, how the U.S. will respond following its weekend attack on Iranian tankers remains unclear to traders, and the risk of vessel attacks remains high. Attacks on Saudi Arabian energy facilities have further added uncertainty to the market, pushing oil prices higher. As of 11:50 a.m. Amsterdam time, the Netherlands’ near-month natural gas futures—the European benchmark—rose 2.4% to €75.10 per megawatt-hour. (Source: Cailian Press) 09 Rising oil and gas prices exacerbate inflation, weighing anew on the European economy Escalating Middle East tensions and supply risks in the Strait of Hormuz continue to drive international oil prices upward. As of the close on September 8 local time, NYMEX October light crude futures rose $1.55 to settle at $93.03 per barrel; November Brent crude futures rose $0.92 to settle at $97.92 per barrel. Eurostat’s preliminary data released on September 1 showed that the eurozone’s annual inflation rate in August stood at 3.3%, markedly up from 2.9% in July. Energy prices rose 14.3% in August—significantly higher than the 10.3% increase recorded in July. Christina Balouskaitė-Griškevičienė, an economist at the European Central Bank, recently noted that rising energy prices are a key driver behind the current rebound in eurozone inflation—a shock closely tied to Middle East conflicts and disruptions to shipping through the Strait of Hormuz. (Source: Xinhua News Agency) 10 Persistent heatwaves prompt emergency dispatch measures by America’s largest regional grid Sustained high temperatures have increased electricity supply pressure across many parts of the U.S., with PJM—the nation’s largest regional grid operator—facing particularly heavy load stress. Meanwhile, MISO—the independent system operator covering 15 states across the U.S. Midwest and South—recorded a weekly peak electricity demand of approximately 121 GW this week, nearing its all-time record of 127.1 GW. To prevent worsening supply shortages from escalating into rolling blackouts, U.S. Energy Secretary Chris Wright invoked Section 202(c) of the Federal Power Act on September 1, authorizing PJM to implement emergency measures. The order took effect on September 1 and remains in force until the evening of September 8. Beyond short-term heatwaves, the U.S. grid also faces long-term pressure from steadily rising electricity demand. PJM’s latest forecast indicates that its summer peak demand is expected to grow by an average of ~3.6% annually over the next decade—reaching approximately 222 GW by 2036, an increase of about 66 GW over current baseline projections. Data center expansion, electrification, and new manufacturing loads are cited as primary drivers. (Source: People’s Daily Online) 11 Australia’s monthly pure electric vehicle sales surpass gasoline-powered vehicles for the first time According to China News Service, Australian Minister for Climate Change and Energy Chris Bowen announced on September 4 that pure electric vehicle (BEV) sales in Australia exceeded gasoline vehicle sales for the first time in August this year.

US Midwest Expected to See Record Number of New Power Plants in Next Five Years, Grid Operator Says

Jun 3, 2026

MISO reports surging electricity demand in the US Midwest will drive a record influx of gas-fired power plants, adding roughly 15 gigawatts of new capacity annually over the next five years.

reuters

2026-06-03

US Midwest Expected to See Record Number of New Power Plants in Next Five Years, Grid Operator Says

US Midwest Expected to See Record Number of New Power Plants in Next Five Years, Grid Operator Says

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