California Forecasts 61% Electricity Demand Growth by 2045

A new California Energy Commission forecast projects a 61 percent rise in electricity demand by 2045, driven largely by electric vehicle adoption and data center growth, challenging grid planners to build capacity and reliability to meet future loads.

California’s electricity planning landscape is undergoing a major shift after the California Energy Commission approved a long-term forecast showing electricity consumption could increase by as much as 61 percent between now and 2045, intensifying concerns already raised during past periods of tight supply and reliability stress, such as those examined in discussions of the California electricity shortage.

At A Glance

• California Energy Commission adopts new demand forecast
• Biggest drivers are EV adoption and data center growth
• Planners eye upgrades for grid capacity and reliability

The forecast, adopted this week, will serve as the official baseline for utility and grid planning across the state. It is part of the Integrated Energy Policy Report that regulators use to determine how much generation, storage, and transmission infrastructure will be necessary in the coming decades, particularly as the state pursues its legally binding California carbon-free electricity mandate.

According to the forecast, electric vehicles will be the largest contributor to rising electricity demand. As Californians continue switching from internal combustion engines to battery-electric models, charging demands are expected to increase peak loads, particularly in the evening hours when solar generation wanes.

In the forecast materials, one Energy Commission commissioner noted the critical role of electrification. “Electric vehicles and other electrification trends are fundamentally changing how we think about peak demand in California,” the commissioner said during the adoption meeting.

In addition to EVs, data centers are emerging as significant new electricity consumers. Demand from machine learning, cloud services, and large-scale computing facilities is growing rapidly, particularly in Northern California’s tech corridors. While data centers often locate near robust transmission infrastructure, their demand profiles can be intense, requiring sophisticated load management and capacity planning.

In a mid-range scenario included in the forecast, peak demand rises by roughly 50 percent by 2045. In a high-growth scenario, consumption rises further as transportation and industry electrify more aggressively.

Grid planners are already reacting to the implications. Representatives from the California Independent System Operator, which manages the state’s wholesale energy grid, said that accommodating the projected load growth will require new transmission corridors, more generation capacity, and expanded energy storage, reinforcing long-standing priorities around repairing and modernizing California’s grid infrastructure.

“Planning for this level of growth is complex,” said a senior grid official. “We have to balance reliability, cost, and clean energy goals while ensuring that the system can meet peak loads even under extreme weather conditions.”

The forecast also underscores how electrification is reshaping California’s grid priorities. Where once the focus centered on integrating intermittent renewables like wind and solar, planners now must contend with rapidly changing load shapes driven by transportation infrastructure and heavy computing.

Some experts argue that demand response programs and distributed energy resources, such as rooftop solar and behind-the-meter battery storage, will play a critical role. These resources can help shave peak demand and reduce stress on transmission networks.

But others caution that without significant investments in grid infrastructure, the state may face reliability risks. The ramifications extend beyond utilities and regulators. Local governments are already updating building codes to encourage electrification, while businesses are planning for increased on-site power needs in response to rising California electricity demand trends.

Electric vehicle charging infrastructure, for example, will need to scale far beyond current levels to serve both residential and commercial sectors. Utilities and regulators are debating how to coordinate charging load with broader grid needs, especially as fast chargers become more common.

Utilities argue that better forecasting and planning can help smooth the transition. “Understanding where and when demand is growing allows us to target investments that enhance reliability without overbuilding,” said a utility spokesperson.

At the same time, the forecast highlights opportunities for clean energy investment. With projected load growth tied to electrification, there is an opportunity to deploy new wind, solar, and storage resources to serve these loads with minimal emissions.