Power Tracker: Data Centers Boosting Demand and Tightening US Power Markets
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Goldman Sachs reports that United States data center capacity additions reached a monthly record of 1.4 gigawatts in December 2025, culminating in 10 gigawatts for the entire year. This massive expansion drove a 2.8% year-over-year increase in total US power demand during the first ten months of 2025, marking the highest growth rate in two decades. More than half of American regional power markets reached critical tightness levels throughout the year.
The PJM market, covering the Mid-Atlantic region, recently lowered its average summer peak demand growth forecast for 2027 through 2029 to 3.1%. However, it raised its long-term ten-year projection to 3.6%. Short-term bottlenecks and critical tightness within PJM could temporarily slow data center expansion, but the long-term demand outlook remains robust due to sustained data center growth, broader electrification, and increasing industrial activity.
On January 16, 2026, President Trump and several Northeastern governors proposed an emergency action plan involving PJM capacity auctions. The proposal requests technology companies to fund long-term contracts for new generation capacity. Goldman Sachs believes this emergency plan will have a limited impact on data center growth and overall power demand. Electricity costs are not the primary driver for data center site selection, and the fundamental supply-demand imbalance in the data center market is expected to persist, leaving the ultimate impact on electricity bills and market tightness uncertain.