After years of relatively modest growth, electricity demand is rising again, and electric cooperatives are preparing for a fundamentally different operating environment.

According to NRECA’s latest Electric Industry Outlook Report, U.S. electricity consumption could increase by roughly 25% between 2025 and 2040, driven by data centers, advanced manufacturing, electrification and increased domestic manufacturing.

At the same time, uncertainty around which proposed large loads will ultimately be built is complicating long-term planning.

To meet that demand, the industry is undergoing a historic building cycle. The report notes that the United States added nearly 55 gigawatts of generating capacity in 2025, the largest annual increase since 2002, with another 86 GW planned for 2026. Solar and battery storage account for much of the near-term growth, while natural gas is expected to remain a critical source of dispatchable power as coal generation declines.

“Co-ops are entering one of the most significant building cycles in recent memory,” says Anthony Buckley, NRECA research analyst and one of the report’s authors. “The challenge is balancing reliability, affordability and resilience while adapting to a much different demand outlook than the industry expected just a few years ago.”

Co-ops are already investing to meet future demand.

More than 20.5 GW of new generation and storage projects have been announced through 2031, including investments in natural gas generation, renewable energy and battery storage. Battery storage capacity is expected to increase sharply as co-ops seek additional flexibility and reliability.

The report highlights co-ops’ growing emphasis on resource diversity. Alongside renewable and natural gas projects, generation and transmission cooperatives have signed agreements for capacity from the restarted Palisades nuclear plant in Michigan and the planned restart of the Duane Arnold plant in Iowa.