The energy trends that will define 2026: AI, affordability and the future of power

Heading into 2026, energy news is heating up in the national conversation. From surging demand from data centers powering AI to increasing electricity bills and political fights over wind and solar power, Straight Arrow News’ fact-based journalism will explore these forces throughout the year, starting with three pressing questions: How many data centers will be built? Which energy sources will win under shifting policies? And who will win the political fight over affordable electricity?. 

The answers to these questions won’t just shape corporate policies; they will affect everyday life, from the price paid to keep the lights on to energy reliability during extreme weather events. 

How many data centers will really be built? 

Data centers dominated the news throughout 2025. The technology industry wants more computing power for artificial intelligence tools. The industry is dishing out billions in capital expenses to build massive warehouses full of computers, and Big Tech is hungry for the electricity its computers need to run. 

In November, SAN reported projections of the energy requirements for planned data centers, according to real estate firm Cushman & Wakefield. The firm found that it would take 79 gigawatts of electricity to power all the planned data centers. The new demand is 40 times what the Hoover Dam generates for the grid.

Meanwhile, energy analysts at BloombergNEF estimate that by 2035, new data centers will account for about 60 gigawatts of new electricity demand. While projections vary, they all point in the same direction: Data centers will need an astronomical amount of electricity, and fast. 

But SAN reporting also shows how communities around newly proposed data center sites often mount fierce opposition to construction projects. Americans are increasingly wary of how data centers could alter their neighborhoods and the potential impacts on electricity rates and water availability. Even if a lawsuit doesn’t stop a data center project, litigation can cause delays.

The year has been rife with discussion of an “AI bubble” as most of the stock market’s growth was dominated by a small group of technology companies investing heavily in artificial intelligence tools. Bubble or not, many researchers are skeptical of the projected electricity demand from data centers. 

“Many data centers that are talked about and proposed and in some cases even announced will never get built,” Sean O’Leary, a senior researcher at the Ohio River Valley Institute, told SAN earlier this year. 

Projections of electricity demand growth may also be inflated because technology companies can submit the same proposal to multiple utility companies across the country while intending to build in only one area. While energy analysts agree that data centers will drive more energy demand, 2026 should provide more insight into the actual size and speed of data center construction. 

Which energy resources will flourish or falter? 

As President Donald Trump returned to power, the new administration’s shift in policy priorities away from renewable energy became a key storyline. From day one, Trump’s executive orders put federal grant funding for renewable energy projects on hold while signaling to the oil and gas industry that he would cut red tape to make it easier to expand production. 

On July 4, Trump signed the “One Big Beautiful Bill Act” into law, which shortened the time wind and solar power companies have to qualify for federal tax credits. Those credits provide a taxpayer-funded payment for each unit of electricity produced by large-scale wind and solar installations. Renewable energy companies now have until 2027 or 2030 to qualify for 10 years of tax credits, depending on when construction begins. 

The Trump administration also took a series of steps that hampered the offshore wind industry. Most recently, the Department of the Interior announced it would stop offering leases for offshore wind on federal waters and told five ongoing wind projects to stop construction, citing national security concerns. 

Despite the rollback of many Biden-era funding mechanisms, solar power had a blockbuster year in 2025. Solar paired with batteries remains among the most cost-effective sources of electricity, according to an analysis by the U.S. Energy Information Administration, and it can be built quickly. 

Natural gas will continue to account for the largest share of U.S. electricity production, and in 2025, dozens of new gas-fired power plants were proposed or approved nationwide. SAN covered the approval of three new gas power plants in Louisiana, which will be needed to power a massive data center being built by Meta.

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The Trump administration plans to invest $80 billion in nuclear power plants designed by the company Westinghouse.

But the growth of gas power is limited by supply chain constraints. Wait times for new gas power plant turbines have stretched to five years or more. In September, Mitsubishi Heavy Industries announced plans to double gas turbine production, and continued efforts into 2026 could speed up the timeline for expanding gas on the electric grid.

Geothermal and nuclear power enjoyed bipartisan support in 2025 because they produce zero carbon emissions and can provide electricity to the grid 24 hours a day. The year was full of milestones in this space, such as geothermal company Fervo raising $462 million in private investment and the Trump administration announcing up to $80 billion available to build Westinghouse nuclear reactors. In terms of providing large amounts of power to the grid, the fruits of these investments are likely to be realized several years from now. But if the trend continues, geothermal and nuclear power sectors will continue to gain steam in 2026.

Who will win the electricity affordability narrative? 

With the 2026 midterm elections in sight, the economy — specifically how rising costs are straining millions of Americans’ budgets — is emerging as a key issue.

As SAN reported in October, rising energy prices were the largest driver of year-over-year inflation, pushing it above 3% for the first time in eight months. No doubt, Americans are feeling the squeeze from high electricity prices

In November, Florida regulators approved a $7 billion rate increase for about 6 million customers of Florida Power & Light. SAN reported how people across 41 states face approved or proposed rate increases, and both political parties have taken notice.

Left-leaning groups and Democratic politicians have tied high electric bills to the Trump administration’s cuts to renewable energy funding. At a time when electricity demand is surging from AI, renewable energy projects that relied on that funding have been canceled. 

“A lot of families are going to be facing tough decisions,” Lucero Marquez, an associate director at the left-leaning Center for American Progress, told SAN earlier this year. “The consistent attack on renewables is going to hurt Americans.”

Meanwhile, Republicans and right-leaning groups say renewable energy investments are making electricity more expensive. They cite the need to back up weather-dependent energy technologies like wind and solar with other sources, like natural gas. Mario Loyola, a senior fellow at the right-leaning Heritage Foundation, told SAN in September that excessive renewable energy means customers are “paying for all this redundant power.”

Loyola also said regulations on the oil, gas and coal industry have “constrained grid capacity” and made power more expensive.

Elections in Georgia, New Jersey and Virginia in 2025 put these dueling narratives to the ultimate test: the ballot box. 

If those elections are any indication, Democrats are coming out ahead. In New Jersey’s gubernatorial race, where high electricity bills were a key issue, Democrat Mikie Sherrill defeated Republican Jack Ciattarelli by 13 points. And Democrat Abigail Spanberger won the gubernatorial race in Virginia, home to the largest concentration of data centers in the U.S., where residents have also seen rising bills. 

The races in Georgia were squarely focused on electricity prices. There, two Democratic challengers defeated Republican incumbents to win seats on the Georgia Public Service Commission, the board that regulates utilities. Democrats flipped traditionally Republican counties for decisive victories in a key swing state. However, the results likely had less to do with partisan affiliation and more to do with anger at incumbents who approved previous increases in electricity rates. 

Daniel Tait, a director at the nonprofit utility watchdog group Energy and Policy Institute, told SAN in November, “Monopoly investor-owned utilities are deeply unpopular,” and any politician, regardless of party affiliation, could face backlash for aligning with the utility companies. 

“People are just fed up with high power bills,” Tait said. 

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Ella Rae Greene, Editor In Chief