Data centers will spike electricity bills, but renewable energy could offset the pain, rep

January 21, 2026

Investing in clean energy could avoid trillions of dollars in health and climate costs, the Union of Concerned Scientists’ report said.

CAMBRIDGE, Mass. — The spread of power-hungry data center developments across the country is poised to cause residential electricity bills and air-polluting emissions to skyrocket over the next decade, but a newly released report argues that reality isn’t set in stone.

The Union of Concerned Scientists, a nonprofit science advocacy organization, released its “Data Center Power Play” report early Wednesday morning, where it found that clean energy investments could largely offset the consequences of data centers.

Data center developers are rarely transparent about their energy needs, which makes projecting future electricity demand difficult, according to the organization’s report. The Union instead used projections developed by Evolved Energy Research, which previously served as the modeling partner for the Oregon Department of Energy, and the most recent S&P Global projections to estimate projected energy demand between now and 2050.

The organization found that data centers would increase electricity demand by 62% between 2025 and 2050 under its “mid-demand growth” scenario, accounting for nearly half of all national electricity demand growth. Projected demand rose to just under 80% during the same time period in the organization’s “high-demand growth” scenario.

The surge in demand will cost the nation’s households more than $500 billion in cumulative electricity costs by 2025 and nearly $1 trillion by 2050, the report said. The resulting emissions from the rapid growth would increase by 10% and would cause $1.6 trillion in health and climate damages by 2035 and $4.5 trillion by 2050.

The organization, however, said the massive costs could be largely alleviated if ambitious climate and clean energy policies are put in place. Decarbonization of the power grid would reportedly avoid $248 billion in electricity cost increases, would lower global climate damages by $1.6 trillion, and lower $220 billion in health costs by 2050.

“The climate and health benefits and net cost savings of building clean energy to meet future electricity needs are obvious and enormous, but they will not materialize without political support and responsible management of data center load growth,” Union of Concerned Scientists Director of Energy Research and lead report author Steve Clemmer said.

The U.S. Department of the Interior recently announced that a group of technology companies had committed to funding $15 billion in new power generation projects in hopes that the buildout would be enough to offset the projected increases in energy costs. Officials, when asked, would not clarify what companies were involved or what kind of power generation projects would be built.

But that investment is a drop in the bucket compared with the costs residents will face due to data centers, according to the organization. Union of Concerned Scientists Clean and Energy Program Midwest Policy Director James Gignac said the investment will only allow fossil fuels to continue harming the public.

“The recent data center announcement by the Trump administration focuses on propping up dirty fossil fuels instead of driving investments toward the cost-effective and clean energy resources, such as wind and solar, our analysis shows are capable of supporting data centers’ growing electricity demands,” Gignac said in an emailed statement. “This is not the time to take clean energy off the table if policymakers want to protect our health, climate and wallets. They have the ability to take action now and require data center developers build more clean energy while ensuring Big Tech doesn’t price gouge the public to subsidize these proposed projects.”

Click here to read the full report.