Electricity demand continues to grow in the US, driven by data centers and the buildout of AI infrastructure. However, natural gas may not benefit until later this decade, as renewables continue to offset much of the gains in power demand. This is especially true for this summer, as growth in electricity consumption is expected to be relatively modest, while solar and battery capacity sets new records.
The chart above shows Lower-48 average power consumption and the year over year percentage change. This is total electricity, from all generation sources. The EIA expects power demand in summer 2026 to be about 2% higher compared to summer 2025. Demand growth in summer 2027 is expected to be even stronger, at 3.4%. While this trend is supportive, it may not lift power sector gas demand yet, as a considerable number of renewables are still being installed.
The chart above shows the total amount of solar and utility-scale battery capacity installed through 2027, in gigawatts. This is important as solar directly competes with natural gas during the day, and batteries compete with less-efficient gas peaker plants during the evening hours when solar output is fading but power demand remains high. By adding more solar and battery to the power mix, the economics of gas fired power plants is reduced.
When you put these factors together, modest electricity demand growth and continued renewables buildout, the impact is that power sector gas demand should be flat or slightly lower this summer compared to 2025, assuming ten-year average weather. However, if temperatures realize hotter than the ten-year average this summer, gas power demand could still increase.
After 2027, things begin to shift and electricity demand could start outpacing renewables, resulting in a modest increase in power sector gas demand. This would come at the same time as strong growth in LNG feedgas demand, potentially supporting gas prices into the end of the decade.