US Sees Resurgence in Fossil Fuel Power Infrastructure Amid Rising Electricity Demand

Image: The fossil fuel comeback is here · Source

New report reveals increased fossil fuel infrastructure development in the US while renewable energy growth slows and electricity demand climbs, driven by data centers, factories, and electric vehicles.

A recent report by the Environmental Defense Fund and Atlas Public Policy highlights a significant shift in the US energy landscape as fossil fuel infrastructure construction accelerates faster than it has in a decade. This trend emerges alongside growing electricity demand fueled by data centers, manufacturing facilities, and electric vehicle adoption.

The report warns that if all planned natural gas projects proceed, they could entrench higher pollution levels and increased electricity prices for decades. It emphasizes the critical decisions being made now will influence the grid's cost, reliability, and emissions profile far into the future.

Despite renewables like wind and solar quickly gaining ground—together producing more electricity than coal for the first time in 2024—government policy under the Trump administration sought to prioritize fossil fuels. This included efforts to impede wind and solar developments by halting work, blocking permits, and removing tax incentives. While solar growth remained robust in 2024, benefiting from Biden-era incentives, new fossil fuel project plans rose sharply.

According to US Energy Information Administration data analyzed in the report, fossil fuel capacity planned for development climbed from 5 percent of new projects in 2024 to 30 percent by mid-2026. Projections indicate fossil fuels could constitute 70 percent of the energy development pipeline by 2030, a 45 percent increase in planned fossil capacity within six months.

Renewable energy projects are being canceled at a faster rate than fossil fuel projects, 4.9 percent versus 2.9 percent respectively. Nonetheless, utility-scale wind and solar continue to offer lower average costs per megawatt hour ($68–$69) compared to new combined-cycle natural gas plants ($90). However, fossil fuels face increasing price volatility and contribute harmful emissions resulting in health and environmental costs.

The shift poses challenges for the US power sector amidst rising electricity bills as utilities upgrade infrastructure to meet demand. The report underscores that the trajectory chosen now will have lasting impacts on pollution, energy costs, and the evolution of the US electricity grid.