President Donald Trump has been racing at breakneck speed to keep all his campaign promises. Yet he has only four months left to fulfill his vow to halve electricity prices by the end of his first year. Fighting against the fallout of the Biden administration’s harmful anti-fossil fuel agenda, the president faces stiff headwinds. The only way the president can meet his self-imposed deadline is to change course quickly, reject Biden’s mistakes and unlock the potential of every available electron.
So far, the trend lines aren’t looking good. In the last year, electricity prices have risen twice as fast as inflation, and the Energy Information Administration estimates that retail electricity prices will continue to outpace inflation through next year, with residential prices surging between 13% to 18% higher than in 2022.
Though, traditionally, consumers have been much more concerned about gas prices — a number they see projected on highway signs and experience firsthand multiple times a month at the pump — the experience of electricity price spikes instead of the promised price cuts will risk diminishing Trump’s popular support.
What’s worse, these price hikes will arrive before the midterms, when Trump will be battling to retain his slim congressional majorities.
The current price hikes aren’t Trump’s fault. Instead, he inherited a market with increasing and unprecedented energy demand coupled with the fallout from the Biden administration’s harmful policies to phase out fossil fuels.
Technological innovations like cloud and quantum computing, crypto mining, electric vehicle adoption, streaming services and, most of all, AI data centers, all have tremendous energy demands, which drive electricity prices higher. Rand estimates global AI data centers alone will need 327 GW of energy by 2030. To put that into perspective, the entire state of California used 86 GW of energy in 2022.
In the face of rising demand, the Biden administration embarked on an aggressive program to curtail legacy energy production. The Biden EPA imposed new emissions restrictions that effectively forced the retirement of coal and natural gas power plants and manipulated regulations across agencies to hem in traditional fuel sources.
If these Biden-era policies didn’t cause the current electricity price spikes, they at least allowed today’s demand-induced price increases to hit consumers unabated.
Trump now has to deal with a crisis not of his own making. With his firm commitments to win the AI race, advance crypto and reshore energy-intensive manufacturing such as semiconductor production, Trump can only keep electricity prices in check by massively increasing supply to meet rising demand.
Unfortunately, his administration appears to be repeating the same mistakes as Biden’s, just colored with a different ideology.
Where the Biden administration cut energy supplies by attacking fossil fuel production, the Trump administration is limiting alternative and renewable energy sources.
The One Big Beautiful Bill rescinds tax incentives for renewables, while the administration has advanced multiple orders and rules that limit clean energy, from halting offshore wind leases to curbing solar tax credits.
‘Drill, baby, drill’ is a great energy policy, but it’s not enough by itself. While America produced nearly enough energy from fossil fuels (86.3 quads) to supply our nation’s entire energy consumption (93.59 quads) in 2023, the fact is, we need alternative energy sources just to meet current demands. When the future requires even more energy, the necessity for alternative energy will only increase.
The cheapest way to put more electrons into the power grid immediately is to erect significantly more solar and energy storage infrastructure, coupled with natural gas peaker plants that can be rapidly turned on during peak hours.
In the medium term, America needs to increase nuclear energy production, build more energy infrastructure like electric transmission lines and natural gas pipelines, and construct geothermal power plants while deploying grid-enhancing technology, improving demand response and increasing energy efficiency. With the growing adoption of solar and EVs, the United States can even create an aggregated network of residential, virtual power plants that only draw energy in low-use times while feeding energy back into the grid when it’s needed most.
If these Biden-era policies didn’t cause the current electricity price spikes, they at least allowed today’s demand-induced price increases to hit consumers unabated.
The point is, every energy source and efficiency measure must be deployed if we have any hope of keeping prices in check.
President Trump can’t be blamed for the current rise in energy prices. But he could be blamed down the road if his administration continues to limit supply by favoring one source of energy over others. At the end of each month, most consumers don’t care where their energy comes from; they only care that it’s cheap.