Goldman Sachs warns U.S. power grid nearing collapse as AI and EVs overwhelm aging infrastructure
By isabelle // 2025-06-06
Copy
 
  • The U.S. power grid is nearing collapse as AI data centers, EVs, and electrification drive demand beyond reliable generation capacity.
  • Goldman Sachs warns spare capacity will drop to 14% by 2027, risking rolling blackouts in key regions like PJM and MISO.
  • Renewables fail during peak demand, leaving grids vulnerable—Texas nearly collapsed in 2021 due to frozen wind turbines.
  • Households and businesses in high-risk areas should prepare for outages with backup generators as blackout threats grow.
  • Decades of underinvestment and over-reliance on unreliable green energy have pushed the grid to the brink of failure.
The U.S. power grid is teetering on the brink of failure as surging electricity demand from artificial intelligence (AI) data centers, electric vehicles (EVs), and widespread electrification outpaces the nation’s ability to generate reliable power. A dire new report from Goldman Sachs reveals that spare generation capacity—the critical buffer preventing blackouts—is projected to plummet to just 14% by 2027, far below the 20% safety margin experts recommend. Key regional grids, including PJM (serving the Mid-Atlantic) and MISO (Mid-Continent), have already fallen below this threshold, raising the specter of rolling blackouts, price spikes, and economic disruption. The warning comes as America’s aging infrastructure struggles to keep up with the Biden administration’s previous aggressive push for renewable energy, which has proven unreliable during peak summer heat when demand soars. With no viable plan to rapidly expand baseload power generation, households and businesses are left vulnerable to cascading failures.

The looming grid crisis

Goldman Sachs analysts highlight a perfect storm of factors driving the grid toward collapse. Electricity demand is skyrocketing, fueled by the AI revolution’s power-hungry data centers, the rapid adoption of EVs, and the electrification of industries and homes. Yet, the report notes that additions of reliable power generation—primarily natural gas, nuclear, and coal—have stalled, while wind and solar fail to deliver consistent output during critical periods. The report warns that spare capacity in the U.S. power grid will drop to 14% by 2027, a level that leaves almost no room for error. Regional grids are already buckling: PJM, which serves 65 million Americans across 13 states, saw its reserve margin fall to 15% last year, while MISO dipped to just 10%. These figures are dangerously close to the levels that triggered California’s rolling blackouts in 2020. The U.S. power grid is approaching critical instability, and the situation will worsen without immediate action. The consequences could be severe: uncontrolled blackouts, surging electricity prices, and disruptions to everything from healthcare to manufacturing.

Renewables fall short when needed most

Proponents of wind and solar energy claim these sources can replace fossil fuels, but reality tells a different story. During heatwaves, when air conditioning sends demand soaring, wind turbines often sit idle due to low wind speeds, while solar panels produce less energy in the evening when demand remains high. The Goldman Sachs report underscores this unreliability, noting that regions with high renewable penetration face greater risks of shortages. Texas, for example, narrowly avoided grid collapse during a 2021 winter storm when frozen wind turbines and inadequate gas supplies left millions without power.

Prepare for the worst

With grid instability rising, households and businesses should invest in backup power solutions. Natural gas or diesel generators can provide critical electricity during outages, ensuring families stay safe and essential appliances remain operational. For those living in high-risk areas, particularly the Mid-Atlantic and Midwest, securing a backup generator is no longer optional. Rolling blackouts could strike with little warning, leaving vulnerable populations without heating or cooling for extended periods. There is also the potential for price spikes as demand outstrips supply. Electricity costs could surge during peak periods, straining household budgets and forcing businesses to cut operations. The grid crisis is not inevitable. It is the result of decades of neglect and misguided policies that prioritized green energy fantasies over real-world reliability. The U.S. has underinvested in transmission infrastructure for years, while regulatory hurdles delay the construction of new power plants. At the same time, the war on fossil fuels has left the grid dependent on weather-dependent energy sources that cannot guarantee steady power. The U.S. power grid is on borrowed time. With reserve margins collapsing and demand surging, the risk of widespread blackouts grows by the day. While policymakers dither, individuals must take responsibility for their own energy security. Investing in a backup generator is a prudent step to safeguard against outages. Staying informed about grid conditions and reducing energy use during peak periods can also help mitigate risks. However, without urgent reforms to expand reliable generation and modernize infrastructure, the lights may soon flicker out. Sources for this article include: ZeroHedge.com Energy.gov InsideLines.PJM.com
Copy