Electricity demand is rising as data centers, factories, and electric vehicles connect to the grid. At the same time, plans for new fossil fuel infrastructure are taking a larger share of the US power development pipeline, while renewable energy growth is slowing.
A shift in what the US plans to build
A report from the nonprofit Environmental Defense Fund and research firm Atlas Public Policy finds that the US is building more fossil fuel infrastructure than it has in a decade. Its analysis of US Energy Information Administration data shows plans for fossil fuel projects rising from 5 percent of new capacity in 2024 to 30 percent by the second quarter of 2026.
If the pattern continues, fossil fuels could account for 70 percent of the development pipeline by the end of the decade. Planned fossil capacity could reach 68 gigawatts by 2030, a 45 percent increase from construction plans six months earlier.
Those figures describe projects in development, not a guarantee that every plant will be built. The report cautions that some plans could fall through, especially if forecasts of energy demand from AI data centers prove too high.
Renewables face a changing policy landscape
The shift comes after a period of rapid growth for renewable power. Wind and solar together generated more electricity than coal for the first time in 2024. Solar was the fastest-growing source of new electricity generation that year, accounting for 81 percent of added capacity.
Still, the report describes a less favorable environment for wind and solar projects under the Trump administration. It has sought to halt renewable projects through stop work orders, blocked permits, and the removal of tax incentives. Some new solar and wind farms continue to move ahead because of their relatively low costs, though many are part of a wave that benefited from Biden-era incentives.
Project cancellations also offer a measure of uncertainty in the pipeline. Renewable projects are currently being canceled at a 4.9 percent rate, compared with 2.9 percent for fossil fuel projects. These rates do not determine which plans will ultimately be completed, but they show that planned capacity can change before it reaches construction.
Cost and risk extend beyond construction
Building new gas plants is not the lowest-cost option in the report’s comparison. New utility-scale solar and wind farms average $68 to $69 per megawatt-hour, while new combined-cycle natural gas plants average $90 per megawatt-hour.
Gas and coal plants also bring exposure to volatile fuel prices, air pollution, and greenhouse gas emissions. Those emissions contribute to climate change, while pollution can add to health costs. The report warns that completing the gas projects now in the pipeline could lock in more pollution and higher electricity prices for decades.
Power bills have already risen across the nation as utilities upgrade grids and build energy infrastructure to meet demand. That makes the cost and lifespan of new projects consequential for customers as well as energy companies.
Decisions now shape the grid for years
The US still generates 60 percent of its electricity from fossil fuels, but renewables have gained ground. Globally, solar has become the cheapest power source in most of the world, adding to the economic pressure to weigh new gas construction against alternatives.
The report frames the power sector as being at an inflection point: decisions made now will influence the grid’s cost, reliability, and emissions profile for decades. Rising demand creates pressure to add power, but the projects chosen to meet it can have long-lasting effects on bills and pollution.
Whether the fossil fuel rebound continues depends in part on which plans survive and how much electricity new data centers ultimately require. For now, the development pipeline points toward more gas even as renewable projects remain less costly on average.