New UCS Report: Powering US Data Centers with More Clean Energy Could Avoid Trillions in Climate, Health Costs

CAMBRIDGE, Mass. (January 21, 2026)-Electricity demand is up and so are household bills across the country. More energy is needed to bolster the U.S. electricity grid as the addition of data centers is widely expected to reshape the energy landscape in coming years. A new report released today by the Union of Concerned Scientists (UCS) highlights the projected consequences of data centers' growing electricity demand on the U.S. power grid and how decisionmakers can mitigate harmful economic, climate, and health impacts through clean energy development and strong ratepayer protections.

Since future data center demand growth is highly uncertain, largely due to a lack of transparency from utilities and Big Tech companies, UCS modeled multiple demand growth scenarios as well as energy policy scenarios for how that demand is met. The report, "Data Center Power Play," projects U.S. electricity needs increasing more than 60% by 2050 in its mid-level data center demand growth scenario. In the next five years, data centers were projected to account for nearly half of total electricity demand growth nationally.

Without strong ratepayer protections, such rapid data center growth could put households and businesses at risk of more than $500 billion in cumulative electricity costs nationally by 2035 and nearly $1 trillion by 2050, UCS reports. Absent ambitious climate and clean energy policies, additional fossil fuels burned to power data centers could increase carbon dioxide emissions from power plants by 19% and result in a further $1.6 trillion in climate and health damages over the next decade, growing to $4.5 trillion by 2050.

"Frenzied data center growth with little transparency or guardrails puts the public at risk of massive cost increases," said Steve Clemmer, director of energy research at UCS and lead report author. "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."

Amid the rapidly escalating and costly impacts of fossil fuel-driven climate change and an affordability crisis nationwide, state and federal support for affordable clean energy paired with substantive ratepayer protections is the smartest and quickest way to meet growing electricity demand while protecting people's health, wallets and the climate.

Key report findings, which assume mid-level demand growth for data centers:

• $248 billion in wholesale electricity costs could be avoided by 2050 by restoring federal clean energy tax credits slashed by the Trump administration.
• Reducing U.S. power sector CO2 emissions 70% by 2035 and 95% by 2050 would result in more than $1.6 trillion in avoided global climate damages by 2035 and $13 trillion by 2050.
• Such power sector decarbonization would also dramatically reduce air pollution from fossil fuels, resulting in $40 billion in avoided health costs nationally by 2035 and $220 billion by 2050.

Decarbonizing the power sector would come with modest increases in wholesale electricity costs, but those costs would be far outweighed by the avoided health and climate damages from reducing fossil fuel use. Stronger ratepayer protections can also prohibit utilities from passing on the costs from data centers through higher prices.

"Data centers are already secretly increasing peoples' electricity bills," said Mike Jacobs, senior energy analyst at UCS and author of a recent UCS report on loopholes exploited by data center developers to push their costs onto the public. "While some utility companies and data center developers are intentionally misdirecting scrutiny, others are willfully ignorant about their roles in passing costs onto consumers. In a future with immense data center growth, ratepayers shouldn't be forced to subsidize Big Tech's profits at the expense of their own health, climate and pocketbooks. State utility regulators have clear authority to assign costs to those that cause them-it's time they require data center developers to pay their fair share for energy needs that can dwarf that of entire cities."

This latest UCS report recommends stronger policies to accelerate the clean energy transition while creating guardrails to protect people and communities from the harms and costs of meeting data centers' electricity demands. It also calls out the Trump administration's prioritization of fossil fuel polluters that put people, the environment, and electricity affordability and reliability at risk.

"The Trump administration has repeatedly worked to derail clean energy deployment precisely when we need it most," said Julie McNamara, associate policy director for the Climate and Energy Program at UCS. "With surging demand from data centers, the need for plentiful, affordable power has never been higher. Yet instead of clearing the path for the fastest, cheapest, cleanest resources to deploy, President Trump is sidelining renewables just to boost the interests of the fossil fuel industry. People will pay the price: in higher bills, in dirtier air, in lost local investments and in worsened climate impacts."

You can read the full report here and related blog posts here. UCS also released state fact sheets for Illinois, Michigan and Wisconsin.