US Power Can't Duck Out of AI

Data centers and AI are driving a doubling of US power load share by 2030, stressing the ERCOT and PJM grids. These regions face high interconnection wait times, political opposition, and price volatility due to the solar 'duck curve'.

Key Takeaways

• 1.Data center electricity demand is rapidly increasing, accounting for 4% of total US load in 2025 and projected to double by 2030.
• 2.ERCOT (Texas) and PJM (Mid-Atlantic) grids face long-term system risks as fossil plant retirements and weather-dependent solar additions struggle to meet surging AI-driven demand.
• 3.Public and political opposition to data centers (NIMBY) is rising, with polls showing Americans oppose their construction more than nuclear power plants due to electricity inflation.

Table of Contents

• US power can't duck out of AI
• Solar additions exacerbate ERCOT duck curve risks...
• higher power demand boosts PJM prices
• ERCOT and PJM reserves are likely adequate this year, but growing loads a risk
• Affordability is weighing on voter support for data centers...
• ...as growing connection queues could slow data center development
• ERCOT load growth is benefiting from the favorable project environment in TX...
• ...and Permian production could boost Texas electric loads as well
• Renewables have kept pace with robust loads, but aging assets could be a risk
• Texas battery capacity is set to surpass California this year...
• ...as developers respond to "duck curve", yet fossil is still needed in evenings
• ERCOT on-peak summer prices have declined on growing solar...
• ...while off-peak strengthened on need for fossil fuels to manage duck curve...
• ERCOT 2028+ curve could shift higher once renewable subsidies end
• Data centers boosted PJM loads in recent years and this trend likely continues
• Although solar has increased, PJM relies heavily on fossil fuel generation...
• ...with more solar coming and new natural gas-fired plants a couple years away
• Higher carbon and winter gas prices could support PJM power prices
• We favor summer 2026 PJM off-peak and like both on and off-peak in 2027

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