This is an extract from a recent report “US Electricity 2025 Special Report” by EMBER.
The transformation of the US energy system hinges on two key trends: the expansion of clean electricity generation and the electrification of energy demand. In 2024, electrified vehicles made up 20% of all new car sales, with full electric vehicles comprising 9%. Heat pump sales rose to account for 57% of new space heating installations. Meanwhile, retail electricity prices increased by 3.0% in 2024, in line with economywide inflation; commercial prices rose 2.1% and industrial prices rose only 1.4%. Several major grid expansion projects were proposed in 2024 to enhance resilience as electricity demand rises and renewables grow. Together, these shifts can enhance efficiency, improve affordability and strengthen energy security. Now, the next stage of the US electricity transition will be about meeting growing electricity demand. Clean power can fulfil this without raising bills, sacrificing security of supply or further relying on gas.
Demand and supply changes in 2024
Electricity demand growth in the US had been near-stagnant for 14 years from 2008 to 2021 (averaging 0.1% per year). However, in 2024, it rose by 3.0% (+128 TWh), following a 1.3% fall in 2023. This marked the fifth highest level of demand growth this century. The country’s GDP rose by 2.8% and the population by 1%, both not unusually high compared to the period of stagnant electricity demand, therefore the rise in demand cannot be fully attributed to these factors. A much hotter summer in 2024 compared to a mild one in 2023, explains some of the increase. According to Ember’s modelling, 25 TWh out of 128 TWh of the electricity demand rise in 2024 can be attributed to the difference in temperature compared to 2023. The analysis quantifies the extent to which higher or lower temperatures drive changes in monthly electricity use, isolating the impact of temperature variations from structural changes such as economic growth or increased electrification. The modelling shows that a hotter summer added 35 TWh to air conditioning demand and milder winter months reduced heating demand by 10 TWh. An intense heatwave in June alone added 24 TWh (+8%) electricity demand compared to a relatively mild June the previous year. The biggest rises by state were Arizona (+20%), Utah (+22%) and Nevada (+23%) in June, most of which can be attributed to increased air conditioning. Overall, temperature-adjusted electricity demand in the country rose by an estimated 2.4% in 2024.
The impact of data centres is significant – but still uncertain. Electricity demand from data centres is estimated to have increased from 176 TWh in 2023 by between 8 TWh (+5%) and 55 TWh (+31%) in 2024, according to recent analysis by Lawrence Berkeley National Laboratory (LBNL). The means between 6% to 43% of the overall 2024 demand rise could be attributed to data centres. This large uncertainty range reflects how difficult it is to track data centre energy use. Electricity demand from mining cryptocurrency is also rising. It grew by an estimated 16%, adding 7 TWh in 2024 and accounting for 5% of the total rise in demand. That’s according to the latest December analysis by the LBNL. The bitcoin industry has been resisting disclosure, so estimates still contain a lot of uncertainty. Just 3% (4 TWh out of 128 TWh) of the 2024 demand rise could be attributed to light duty electric vehicles. EIA data showed that demand from EVs grew to 11 TWh in 2024, making up just 0.25% of overall US electricity consumption. Solar generation increased by a record 64 TWh, from 239 TWh in 2023 to 303 TWh in 2024, leading to a substantial increase in clean generation. Solar and wind together added 97 TWh to generation in 2024 compared to 2023, 64% more than gas (+59 TWh). The growth in all three sources met rising electricity demand while allowing coal to decline.
Wind and solar overtake coal in historic US clean electricity landmark
For the first time, wind and solar produced more electricity than coal nationwide. Illinois just became the 24th state to make the crossover since the peak of US coal power in 2007. In 2024, wind and solar hit a record 17% of US electricity, surpassing coal, which dropped to an all time low of 15%. The surge of renewables and gas has driven coal’s rapid decline since its peak in 2007. Since then, wind and solar have overtaken coal in 24 states with half making the shift in just the last six years. Last year marked a major milestone for US electricity generation. For the first time ever, wind and solar combined produced more electricity than coal. In 2024, wind and solar produced a record 17% (757 TWh) of US electricity, marking a 15% (+97 TWh) increase from 2023 – enough to power 9.2 million additional homes. Meanwhile, coal generation decreased to its lowest level ever, making up just 15% of US electricity. Coal’s decline has been swift. Since its peak in 2007, coal generation has fallen by over two-thirds (-68%), displaced by gas, wind and solar. Gas generation more than doubled, increasing by 968 TWh. Wind and solar expanded twentyfold, together adding 722 TWh. In comparison, coal declined by 1,364 TWh. The shift has been particularly fast in recent years. Just six years ago, in 2018, coal was three times larger than the combined total of wind and solar. Since then, coal has fallen by 43%, while the combined generation of wind and solar has doubled.
Since coal’s nationwide peak in 2007, wind and solar have surpassed it in 24 states– and the pace is accelerating. Half made the switch in just the last six years, with Illinois the latest to cross over in 2024, following Arizona, Colorado, Florida and Maryland in 2023. The shift from coal to wind and solar has delivered cleaner electricity across most US states, even in those where wind and solar have not yet surpassed coal. The biggest reductions in carbon intensity have happened in states where wind and solar have replaced coal, rather than where coal has mostly been swapped for gas. But while this transition has made electricity cleaner, gas generation continues to rise, meeting growing electricity demand and slowing overall emissions reductions
Batteries are scaling up faster than ever in the US, enabling record solar growth to continue and reducing fossil fuel use. In 2024, California and Nevada led the nation in solar power, becoming the first states to surpass 30% annual solar share, with California hitting 32% and Nevada 31% – the highest shares of any state. But the transition is uneven – while some states are surging ahead, others are just beginning to see significant growth. Batteries are essential for the rise of solar, allowing solar to meet growing demand and displacing gas and coal generation. Across the US, the growth of batteries is accelerating alongside solar, with 1 MW of storage being added for every 3 MW of solar added in 2024. As of 2024, two states generate more than 30% of their annual electricity from solar for the first time ever.
California generated 32%, up from 28% in 2023, while Nevada jumped from 26% to 31%. They now lead the nation alongside Massachusetts (26%, up 1 percentage point), Hawaii (21%, up 2% percentage points), and Vermont (17%, up 1 percentage point). Despite these gains, solar remains a minor player in large parts of the rest of the country. While its share in the US electricity mix rose from 5.6% in 2023 to 6.9% in 2024, 28 states still generated less than 5% of their power from solar. In many of these states, solar is just beginning to emerge as a new source of generation growth. However, the pace of change can be rapid. In Maine, solar’s share increased fivefold from less than 3% in 2021 to 14% in 2024. In Texas, the share of solar rose from less than 5% in 2022 to 8% by 2024. Texas surpassed California in utility-scale solar capacity in 2024, but solar made up a much smaller share of its electricity mix due its significantly higher power demand.
The rise of batteries will enable solar to continue growing
Batteries are a game changer for solar — they can store electricity during periods of high solar generation, typically midday, and make that power available to meet high demand during evening peaks or even overnight. Without batteries, solar’s share can grow only in the sunny hours. Once it saturates those hours, any further capacity growth would put stress on the grid and lead to large curtailment losses. Batteries are already storing a significant share of California’s peak solar generation, shifting it to meet the evening demand. This also eases the stress on the grid at midday and helps reduce the occurrence and severity of negative prices. Looking at a relatively sunny day in February 2025, nearly a third (30%) of the daily solar generation was absorbed by batteries. Their rise will drive continued capacity growth and a higher share of generation, with California’s example proving that batteries can unlock rapid solar expansion in other US states as well.
California has seen explosive battery growth, expanding nearly twentyfold from 0.6 GW in 2020 to 11.7 GW in 2024 – making up nearly half (45%) of total national utility battery capacity. The state installed more batteries than solar at utility-scale in 2024 – adding 3.8 GW of battery capacity compared to 2.5 GW of new solar. Other states are racing to catch up. In 2024, Texas installed more new utility-scale battery capacity (3.9 GW) than California (3.8 GW), doubling its total from 3.6 GW in 2023 to 7.5 GW. The fast growth of batteries in Texas is underpinning soaring solar capacity growth, with 7.4 GW utility-scale solar added in 2024, nearly double the 2023 additions (3.7 GW). This means that Texas added 1 GW battery for nearly every 2 GW of solar added in 2024.
Arizona and Nevada also saw major growth, more than doubling their battery capacity. Arizona’s battery capacity surged from 1 GW in 2023 to 2.1 GW in 2024, while Nevada’s jumped from 0.6 GW to 1.1 GW. As more states scale up, batteries are rapidly reshaping the US grid, making way for greater solar growth. On the national level, batteries are catching up to solar capacity additions. The US added a record 36 GW of new solar capacity in 2024, accounting for 81% of its total power capacity additions. Of this 36 GW, 31 GW was utility-scale solar, alongside 10 GW of utility-scale batteries – an 80% increase – bringing the ratio of new batteries to solar closer than ever. Overall, batteries made up a third of solar additions, with 1 GW battery added for every 3 GW of solar. This is expected to reach 60% in 2025 – 1 GW battery for every 1.7 GW solar.
US gas and clean generation growth meets rising demand more than it replaces coal
The rise in gas, solar and wind generation in 2024 was predominantly used to meet electricity demand growth, whereas historically it had mostly replaced coal. Gas generation rose 3.3% in 2024, similar to the average of the last ten years. However, the increase was mostly to meet electricity demand growth, which is a change from recent history, where gas increased to replace coal. Solar and wind growth slowed the growth of gas, which would have needed to grow by 9% to meet demand without them. In 2024, states with the highest rise in gas generation also saw the highest electricity demand rise. Rising clean electricity generation slowed gas generation in many states.
Only California and Georgia saw large enough growth in clean generation to create a significant fall in gas generation. US gas generation rose by 3.3% (+59 TWh) in 2024, a significant increase, though similar to the average growth of the previous ten years (+68 TWh). What was different in 2024, is that the increase in gas, solar and wind was more to meet rising demand and less to replace coal. Demand rose by 128 TWh and coal fell by 22 TWh – the 150 TWh shortfall was met by gas, solar and wind. This also means that 85% of the total growth in gas, solar and wind met rising electricity demand and just 15% replaced coal generation, resulting in the second smallest fall in coal generation since 2014.
The states with the biggest rises in gas generation in 2024 were those with the highest rise in electricity demand growth. In the states with the highest rise in gas generation, electricity demand grew more than the decline in coal generation. Virginia saw the largest rise in gas generation (and coal generation even rose slightly). This establishes a clear – and perhaps obvious link that rising electricity demand is leading to rising gas generation. 32 states saw a rise in both gas generation and clean generation. In Virginia, gas made up 87% of the total increase in generation. In other states, clean sources played a bigger role and gas, a smaller role. In Texas, gas accounted for less than half (47%) of the total generation rise, and in Arizona, Connecticut and Colorado, it was only a third. California saw the largest fall in gas generation as clean electricity rose more than electricity demand.
Rising demand pushes up emissions slightly, but electricity continues to get cleaner
The rise in power demand was much faster than the rise in power sector CO2 emissions – making each unit of electricity the cleanest it has likely ever been. Maintaining the mature clean technologies of hydro and nuclear while rapidly adding newer ones, especially solar, was not sufficient to achieve a year-on-year reduction in carbon emissions. That’s because fast-rising electricity demand necessitated extra gas generation. Even though carbon emissions increased, carbon intensity (emission per unit of electricity) reached a record low of 384 gCO2/kWh in 2024 – mainly because clean generation grew faster than fossil and gas replaced coal, making US electricity cleaner. The 0.7% rise in CO2 emissions in 2024 was relatively small compared to the increase in electricity demand (+3.0%), mainly because clean generation – predominantly solar and wind – helped meet a significant part of the increased demand. While coal generation continued to fall, emissions rose due to increased gas generation.
For nearly two decades, US power sector emissions have been in decline, falling by 2.3% per year on average since the peak of coal generation in 2007, resulting in a cumulative 33% fall by 2024. The rise of wind and solar, along with the shift from coal to gas, was transformational, reducing coal’s share in the electricity mix from 49% in 2007 to an all-time low of 15% in 2024. Meanwhile, mature clean technologies of hydro and nuclear maintained their share in the mix. Even as demand grew, the US grid continued to get cleaner. The expansion of wind, solar and gas helped stabilize emissions in the face of rising consumption. The key question is whether these trends will continue as the economics and politics of power generation in the country continue to shift.
Carbon intensity of power generation continued to fall – from 393 gCO2/kWh in 2023 to 384 gCO2/kWh in 2024. This is most likely the cleanest electricity in the US since the late 1800s when coal began to dominate. Since US coal generation peaked in 2007, the country’s electricity has become substantially cleaner, falling from 598 gCO2/kWh in 2007 to 384 gCO2/kWh in 2024. Over that period, the combined generation of wind and solar, along with gas, increased substantially (by 722 TWh and 968 TWh, respectively), contributing to the fall in coal generation. The biggest falls in carbon intensity between 2007 and today happened in states where increasing wind and solar were the biggest sources replacing coal, rather than gas. The five states with the largest falls in carbon intensity were Iowa, New Mexico, Kansas, Colorado, Oklahoma and North Dakota, which also saw large increases in wind and solar. Meanwhile, Ohio and Delaware recorded the largest falls in coal share than any state but did not see their carbon intensity fall as steeply because most of the coal was replaced with gas.
Energy transition
The transformation of the US energy system hinges on two key trends: the expansion of clean electricity generation and the electrification of energy demand. Together, these shifts can enhance efficiency, improve affordability and strengthen energy security. For electrification to accelerate, electricity must remain affordable – and prices in 2024 remained stable, albeit high after a large rise in 2022. Sales of electrification technologies like electric vehicles and heat pumps continued their decade-long rise. While EVs made up one-fifth of total car sales, heat pumps accounted for 57% of new space heating installations in 2024. Grid modernisation is essential for maintaining supply security and presents a key infrastructure investment opportunity.
As more renewables come online, a more interconnected grid and increased cross-border electricity trade could help stabilize prices, allowing high-cost regions to benefit from lower-cost power elsewhere. Affordable electricity is not only a key driver of economic growth but also a critical enabler of electrification. Wholesale prices were lower and less volatile in 2024 than the year before. This was mostly driven by low natural gas prices, increased generation from some lower cost renewable energy sources and new battery storage capacity. Retail electricity prices increased by 3.0% in 2024, in line with economywide inflation, although commercial prices rose 2.1% and industrial prices rose only 1.4%. Prices have steadied after a 10% rise in 2022, triggered by a surge in fossil fuel prices following Russia’s invasion of Ukraine, although they remain higher than pre-war levels.
There is no evident correlation between the share of electricity generated from wind and solar and overall electricity prices. However, some states with high wind and solar penetration – such as Iowa, South Dakota and Kansas – have some of the lowest electricity prices in the country. Conversely, higher electricity costs in states such as California and Massachusetts are influenced by factors including reliance on expensive imported fossil fuels, aging infrastructure and natural disaster damage. These elements play a more significant role in determining electricity prices than the level of wind and solar uptake. Electricity currently accounts for approximately 18% of total energy demand in the United States. While the share of electricity in the energy mix grew steadily for much of the 20th century, the pace of electrification began to slow in the 1990s and has remained stagnant since 2008. However, there are emerging signs that electrification is about to accelerate again. The rapid adoption of electric vehicles and heat pumps is expected to drive renewed growth in electricity’s share of energy consumption.
Electric vehicle (EV) car sales in the United States are gaining momentum, setting the stage for a broader shift in road transport electrification. Sales translate into stock turnover, which leads to the electrification of passenger cars — and eventually the entire road transport sector. Road transport currently accounts for 23% of total energy consumption in the US, according to the EIA. In 2024, electrified vehicles (xEVs) made up 20% of all new car sales, with battery electric vehicles (BEVs) comprising 9%. Sales of pure internal combustion engine (ICE) vehicles are declining since their peak over seven years ago and are continuing to fall as xEVs have absorbed virtually all of the post-COVID rebound in the auto market. Heat pump sales are rising rapidly, accelerating the electrification of low temperature heating in buildings and industries, which together account for about 20% of total US energy demand according to NREL. As old systems are replaced, heat pumps are steadily displacing fossil-fuel-based heating, reshaping the U.S. heating market.
The US electricity market is primarily composed of regional grids, with many states largely self-sufficient in their power generation. Despite the potential for interregional trade, electricity flows between states have remained relatively stable over the past few decades, with only a handful of states undergoing notable shifts. That will likely change in the coming years. The latest data on interstate trade shows limited reliance on imports, with only seven states importing more than 20% of their electricity demand in 2023. Most of them had below-average wind and solar shares, including Delaware at the top (7.5% vs. 15.5% nationwide), followed by Maryland, Virginia and Tennessee. In contrast, states with high wind and solar have not relied much on imports to balance supply and demand, partly due to growing battery storage managing fluctuations in renewable generation. There were 17 states exporting more than 20% of their demand, most with below-average wind and solar. New Hampshire, which had the highest exports relative to its demand also had less than 5% wind and solar. Since the 1990s, the rise of wind and solar has helped transform three states – Oklahoma, South Dakota, and Iowa – from net importers to net exporters.
Enhanced transmission links are essential to not only support the efficient integration of low-cost solar and wind, but to improve overall security of supply and resilience, especially in a world of rising electricity demand. The US grid is one of the oldest grids in the world, with more than half of its infrastructure over 20 years old, and has been experiencing rising outages. The ongoing grid transformation presents a substantial investment opportunity and the US has the potential to leapfrog from one of the oldest to one of the most modern grids globally. This transition could unlock numerous benefits, including higher efficiency, lower system costs and improved reliability. Several major grid expansion projects were proposed in 2024 to modernize US transmission infrastructure and integrate more renewable energy. Key initiatives backed by the Department of Energy include the Aroostook, Cimarron Link, Southern Spirit and Southline projects, along with Nevada’s Greenlink West and North lines. Collectively, these projects aim to improve grid reliability and unlock gigawatts of cheap renewable capacity to supply demand centers with elevated prices.
Access the report here
