Electricity Strategy Is Now a Business Decision for Leaders
Most leaders still treat the electricity line the way they treat rent. It arrives, someone approves it, and it gets filed under overhead.
That habit is getting costly. In May, the U.S. Energy Information Administration (EIA) said commercial electricity sales would pass residential sales for the first time in 2027, as Utility Dive reported in Commercial electricity use will likely surpass residential in 2027: EIA. The agency's October update moved the date up a year. The EIA now projects commercial sales of 1,549 billion kilowatt hours in 2026 against 1,541 billion for residential customers, then 1,592 billion against 1,534 billion in 2027, according to its Short-Term Energy Outlook, October 2026. The commercial category includes data centers. In Data center server energy use grows across the commercial building stock, the EIA estimates that servers alone made up about 7% of commercial electricity use in 2025 and could reach 22% to 33% by 2050 across its long-term cases.
The 2026 margin is thin, only 8 billion kilowatt hours, and the EIA releases its next outlook on November 10, so the figure can still move. The direction is steadier. The agency expects commercial demand to grow 2.8% in 2027 while residential demand stays mostly flat. Business customers now drive the growth in U.S. electricity demand, and that changes what power costs you and where you can get it.
Why Electricity Strategy Now Belongs on Your Agenda
A utility bill is something you absorb. An electricity strategy is something you plan around. Electricity moved from the first category to the second because price and availability now differ sharply by location, and an average no longer describes your situation.
Look at U.S. wholesale prices. The EIA forecasts that prices in the PJM region of the eastern United States will rise 41% in 2026 over 2025, the largest regional increase. At the Mid-Columbia hub in the U.S. Northwest, they fall 23%. Same country, same year, opposite direction.
Retail prices carry more than fuel and generation. The EIA notes that residential prices also include transmission and distribution upgrades and, in some regions, capacity market auction prices. U.S. commercial customers paid an average of 13.41 cents per kilowatt hour in 2025, and the agency projects 14.00 cents for 2026 and 14.21 cents for 2027. Those are national averages. Your own rate follows where you operate and how you buy.
What the Global Grid Comparison Shows
The International Energy Agency (IEA) put data center electricity use at 415 terawatt hours in 2024, about 1.5% of world consumption, in its report Energy and AI. The United States accounted for 45% of that, China 25%, and Europe 15%. The agency expects the global total to more than double to around 945 terawatt hours by 2030. In the United States, where the limit is price and capacity, it expects data centers to account for nearly half of demand growth through 2030, and by the end of the decade to use more electricity than all the country's energy-intensive manufacturing combined, including aluminum, steel, cement, and chemicals.
Total demand is climbing too. In Electricity 2026, the IEA forecasts global electricity demand growth averaging 3.6% a year from 2026 through 2030, about 50% faster than the previous decade. Each market meets that growth against a different limit.
In Ireland, the limit is permission. The nation's Central Statistics Office reports in Data Centres Metered Electricity Consumption 2025 that data centers used 23% of Ireland's metered electricity in 2025, up from 5% in 2015. Their use grew 10% in 2025 while everyone else's grew 2%. Ireland's regulator, the Commission for Regulation of Utilities, responded with a rule instead of a price signal. Its December 2025 policy requires new data centers of 10 megavolt-amperes or more to bring dispatchable generation or storage that matches their import capacity, and they can't ramp up to full capacity until it is delivered, according to Arthur Cox's summary in New connection policy for data centres in Ireland.
In Europe and other advanced economies, the limit is time. The IEA finds that data centers will account for more than 20% of demand growth to 2030 across advanced economies, which spent decades with flat demand. European Union demand is forecast to grow about 2% a year through 2030, though it isn't expected to return to 2021 levels before 2028, and wholesale prices there rose in 2025 on higher natural gas prices. Building a new transmission line can take 4 to 8 years in advanced economies.
China shows what sustained grid investment can do. In Electricity 2026, the IEA expects China to account for close to half of the increase in global demand through 2030, adding demand equal to the European Union's total consumption today, with growth averaging 4.9% a year. In its Renewable Energy Market Update - June 2023, the agency credits large-scale grid investment, averaging USD 75 billion a year since 2010, with cutting wind and solar curtailment from 16% in 2012 to under 3% in 2022 as interconnection linked northern and northwestern provinces to load centers in the south and east.
In India and Southeast Asia, the limit is reliable supply that keeps pace with growth. The IEA expects their share of emerging-market demand growth to rise substantially by 2030, driven by economic growth and rising demand for air conditioning. Its ASEAN Energy Security Review projects Southeast Asian electricity demand rising about 5.4% a year from 2026 to 2030 and says meeting it reliably will require investment in grids, generation capacity, and system flexibility. Across emerging and developing economies outside China, the agency reports 50% of the world's internet users but less than 10% of data center capacity. Where outages are frequent, it says running a data center at home can be risky or costly, which makes overseas hosting more appealing.
Price, permission, time, and reliability look like four separate problems. They are one question. Can you get dependable power, at a cost you can plan for, by the date your strategy needs it? The IEA adds that regional price gaps persist and weigh most on energy-intensive industries.
Where Power Pressure Reaches Beyond Technology
Data centers are only the largest new buyers competing for the same local networks. The IEA reports that nearly half of U.S. data center capacity sits in regional clusters, and that 50% of the U.S. projects under development are inside existing ones, which raises the risk of local bottlenecks. If you run a plant, a cold-storage network, a hospital system, or a distribution hub near one of those clusters, you may be drawing on the same infrastructure.
South Korea shows the same pressure outside technology. Electricity rates for industrial users above 300 kilowatts rose about 70% from 2022 to 2024, the Korea JoongAng Daily reported in As Korea's once-low electricity rate rises, manufacturers mull pulling the plug. A foundry, BM Foundry, told the paper that more than 500 million South Korean won of its 3 billion won in monthly revenue goes to electricity, roughly 17%. In January 2025, Hyundai Steel said it would build a new electric arc furnace steel mill in Louisiana, citing local customers, the state's business climate, and cheap electricity. The paper put Louisiana's industrial rate at about half of Korea's.
Site selection looks different from there. Land cost and labor supply still matter. I would make verified power availability a formal condition of major site and capital decisions, which means confirming the capacity on offer, the contract terms for delivery, and the investment needed to make that capacity usable. A low-rent site with a long wait for a connection costs more than its lease suggests, because the delay is a cost of its own.
Margins follow the same logic. The roughly 4% rise in U.S. commercial prices between 2025 and 2026, calculated from the EIA outlook figures above, is easy to absorb if electricity is a small share of your costs. If it is a large share, the arithmetic matters. Assuming new sales earn the same margin, a business with a 10% operating margin needs $10 in new sales to offset each additional dollar of energy cost.
Questions Your Operating Model Has to Answer
A tariff discount is an efficiency gain. Whether your footprint fits the grid you depend on is a strategy question. Russell Ackoff warned about confusing the two in A Lifetime of Systems Thinking, published in The Systems Thinker in 1999. He argued that large social systems pursue the wrong objectives, and that "They try to do the wrong thing righter, and this makes what they do wronger."
Start with who owns electricity strategy. In many organizations, electricity sits with facilities, and finance sees it after the fact. Once you have an electricity strategy, it belongs alongside the capital plan, with finance, operations, technology, and the executive team sharing accountability. For data centers, the IEA's Energy and AI analysis points to two ways to reduce grid risk. One is placing new load where power and grid availability are strong. The other is running servers, on-site generation, and storage more flexibly. The agency calls both underexplored, and the logic reaches any large user.
Then look at capacity. Write down the power each growth plan needs and the date it needs it, including what automation, AI, and electrified equipment add. Compare that with what the local network can deliver by then. Electricity 2026 reports more than 2,500 gigawatts of projects stalled in grid connection queues worldwide. It estimates that flexible connection agreements, which allow faster access with some limitations, and grid technologies could free capacity for 1,200 to 1,600 gigawatts of advanced-stage projects. You can wait for infrastructure or redesign operations around the capacity that exists. Add reliability to the review too. The agency cites large blackouts in Chile, the Iberian Peninsula, and Mexico in 2025. A gap found in a planning document costs far less than one found during construction.
Finally, look at cost structure. Compare each site's or business unit's power use with the margin it earns, and separate the energy cost you can influence from the cost you can't. Demand charges, peak-period pricing, and capacity charges can raise your effective rate even when total consumption falls. Fixed-price and index-linked contracts, on-site generation, storage, and shifting load each move that line differently, and none guarantees a return. The right mix turns on your load profile, your location, and how much price swing your margins can take. Rules and prices differ by market, so test any approach against the terms in your own jurisdiction.
The 2026 crossover is thin enough to shift when the EIA publishes on November 10. Whatever the revision says, ask what your plan assumes about electricity, and who in your organization owns that assumption.
When Power Limits Where and How Fast You Grow
Growth, transition, and performance pressure expose how an organization is built. When the cost or availability of power starts to constrain an expansion, a site decision, or margins, the challenge usually reaches the operating model, capacity plans, and cost structure at once. Aspirations Consulting Group helps leadership teams work through those pieces together.
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Thanks for reading!
~ Jerry Justice
Living to Serve, Serving to Lead™
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