America could meet growing electricity demand without building new power plants, new report shows

As concerns mount over America’s surging electricity demand and rising energy costs, a new report from the American Council for an Energy-Efficient Economy (ACEEE) suggests the solution isn’t necessarily building more power plants—it’s using existing electricity more wisely.

The report reveals that energy efficiency improvements and load shifting—moving electricity use to off-peak hours—could meet much or all of the nation’s projected electricity demand growth at roughly half the cost of new infrastructure. By 2040, utility-driven efficiency programs could reduce usage by about 8 percent (70 gigawatts) at just $20.70 per megawatt, compared to $45 per kilowatt for new gas plants. Load shifting could save an additional 60-200 gigawatts by 2035, potentially outpacing even aggressive data center growth projections.

Despite these cost advantages, utilities often favor building new infrastructure because they can earn a 10 percent return on capital investments while efficiency programs are treated as operating expenses with no profit margin. “Our incentives aren’t properly lined up,” said ACEEE’s Mike Specian, who authored the report. Solutions include “decoupling” utility revenue from electricity sales and implementing performance-based regulations that reward conservation.

With infrastructure planning happening 10 years in advance, experts emphasize that acting now on demand-side measures could save billions while avoiding emissions from new power plants. As electrification accelerates, tapping into America’s “massive untapped resource” of energy efficiency becomes increasingly critical for meeting climate goals affordably.