The United States is in the midst of a surge in energy demand, largely driven by the rise of artificial intelligence and the power-hungry data centers feeding it, as well as electrification and an increase in U.S. manufacturing.

There is bipartisan agreement that America needs more power. But the question of how to meet this demand has quickly become a flashpoint in the nation’s energy debate, with the Trump administration pushing to expand fossil fuel production while trying to cut off federal support for low-carbon energy like solar and wind. 

On Wednesday, utility, grid and energy systems experts told the House Committee on Energy and Commerce that Trump administration policies aimed at freezing and repealing incentives for grid modernization and low-carbon energy sources will trip up efforts to meet America’s increasing energy demands. 

In January, President Donald Trump signed an executive order calling for an “immediate pause” in federal funding for Inflation Reduction Act programs, which include tax credits for wind, solar, nuclear and other low-emission energy sources. 

Tyler H. Norris, James B. Duke Fellow at Duke University, told lawmakers that repealing the IRA tax incentives would likely hinder utility providers’ plans to expand nuclear, wind and solar energy sources. Energy reliability, he added, could also be impacted, while a rise in cost will be passed onto consumers. 

“I mean, it’s sort of obvious, right?” Norris said. “If you pull back incentives for a given activity, you’re going to see less of that activity. In this case, that means there’s going to be less generation out of the system, and it’s going to impose higher costs.”

A recent study conducted by the economic consulting firm National Economic Research Associates on behalf of the Clean Energy Buyers Association found that repeal of the IRA tax credits would raise the average American’s electricity prices roughly 7 percent by 2026. For U.S. businesses, the firm forecasted a 10 percent increase. 

Asim Z. Haque, senior vice president for governmental and member services of PJM Interconnection, which runs the mid-Atlantic regional grid, told lawmakers it needs both renewable energy sources and additional energy sources in order to keep up with demand. 

“Policies, economics and consumer choices are shifting the grid away from dispatchable, emitting generation resources toward intermittent generation with little-to-no carbon emissions,” Haque said. 

Which energy sources utility companies use for power generation depends on a variety of factors, ranging from cost to availability, geography, government policies and reliability. Countries worldwide have been reforming their electricity grids to meet renewable energy commitments to fight climate change, particularly as costs have plummeted. But gas, coal and nuclear power plants are still widely used because they can run more regularly. 

Republicans at the hearing argued for scaling up fossil fuel sources, including natural gas. 

Supply chain bottlenecks could get in the way of that plan, said Michelle Solomon, manager in the electricity program at the energy policy think-tank Energy Innovation. Gas turbine orders are backed up, with deliveries delayed until 2030. 

“There are big questions about how quickly those facilities can be built,” Solomon told Inside Climate News. “What is being built now is largely clean energy—wind, solar and batteries—and they’re being built largely because of market forces.”

Democrats at the hearing said sole reliance on fossil fuels as a strategy was misguided and would increase consumer costs and impede the transition to cleaner energy.

They called for maintaining the Biden-era tax credits aimed at facilitating investment in renewable sources and said doing so was crucial to avoiding a reliability crisis in the power sector that could leave communities vulnerable to power outages during extreme weather events.

They also took aim at Trump’s dismantling of the federal government under Elon Musk’s Department of Government Efficiency program. 

“It’s rather absurd that we’re tackling strengthening our electrical system while Elon Musk and the Trump administration are taking a sledgehammer to the Department of Energy, especially the initiatives that strengthen and modernize the grid,” said Rep. Kathy Castor (D-Fla.).

The vast majority of IRA clean energy tax credits, about 80 percent, have gone to Republican districts, where manufacturing of components in wind turbines and solar panels has surged.  

Katie Surma

Reporter, Pittsburgh

Katie Surma is a reporter at Inside Climate News focusing on international environmental law and justice. Before joining ICN, she practiced law, specializing in commercial litigation. She also wrote for a number of publications and her stories have appeared in the Washington Post, USA Today, Chicago Tribune, Seattle Times and The Associated Press, among others. Katie has a master’s degree in investigative journalism from Arizona State University’s Walter Cronkite School of Journalism, an LLM in international rule of law and security from ASU’s Sandra Day O’Connor College of Law, a J.D. from Duquesne University, and was a History of Art and Architecture major at the University of Pittsburgh. Katie lives in Pittsburgh, Pennsylvania, with her husband, Jim Crowell.

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