The Age of Electricity Is Becoming the Age of Energy Backlash

International Energy Agency Director Fatih Birol has labeled the coming decades “the Age of Electricity.” Global electricity demand is growing at twice the rate of total energy demand. Whether it’s the emergence and rapid adoption of air conditioning, electric vehicles or data centers, surging electricity demand is upending both energy policy and politics. 

As Politico’s Ben Storrow observed, “Oil is still king of global energy markets, and politics. But a shift is underway.” That shift is about more than ballooning demand. It is also about voters’ growing sensitivity to electricity prices.

In the United States, data centers and rapidly rising power bills have pushed electricity to the center of the political debate. Since February 2020, average electricity prices have increased 40% nationwide. In some areas, the rise has been far steeper. Here in Washington, D.C., prices have jumped 93% in just half a decade.

Europe faces a similar backlash. There, frustration is directed at a bungled energy transition that has delivered greater penetration of wind and solar at exorbitant costs and created a crippling dependence on imported natural gas.

The circumstances across the Atlantic may appear different, but they share a costly commonality: the rush to push coal off the grid.

America’s Capacity Crisis Comes Home to Roost

In the United States, concerns about rising prices and the enormous electricity needs of data centers ultimately come back to a shortage of generating capacity—a shortage created by years of policy mistakes.
Cheap natural gas, renewable mandates and a federal regulatory onslaught drove half the nation’s coal capacity off the grid since 2011. Another 50 gigawatts of coal capacity are now at risk of closure over the next five years.

The loss of those plants has collided with soaring demand and mounting warnings about grid reliability. The Trump administration has worked to stop further losses, but electricity markets increasingly short of capacity and dispatchable fuel diversity have responded with sharply higher prices to incentivize new supply. Data centers may be in the political crosshairs but the policy decisions that preceded their emergence created today’s energy politics.

Europe’s Coal Retreat Meets a Voter Revolt

Europe’s obsession with pushing coal off the grid has left consumers and industry at the mercy of one energy supply crisis after another. Europe’s power prices are now dictated by carbon markets, painfully expensive imported natural gas and the schizophrenic variability of renewable generation that regularly leaves grid operators scrambling. The Germans even have coined word for it: dunkleflaute, or the “dark doldrums,” when wind and solar generation all but disappear.

The blowback to the ever-growing cost of Germany’s energy transition is reshaping the political map. Germany remains committed to phasing out coal generation – which continues to meet 20% of the nation’s power needs – despite mounting affordability and reliability concerns. But German voters are realizing a coal phaseout will simply mean greater reliance on imported natural gas to fill the voids left by renewable variability, an own goal they’re increasingly unwilling to make.

The Alternative for Germany (AfD), Germany’s biggest opposition party, opposes the country’s coal phaseout and is demanding a reversal to avoid ​the risk of blackouts and to reduce energy costs. Once on the margins of German politics, the AfD now leads nationwide polls.

The story is similar in Britain where energy prices and energy policy missteps making and breaking governments. Former prime minister Keir Starmer came into power in 2024 pledging to reduce energy costs. When he resigned as prime minister this summer, his successor immediately eliminated a value-added tax on electricity consumption, only underscoring the importance of energy politics.

British voters are angry, and rightfully so.

Coal generated 40% of Britain’s electricity as recently as 2012. Now it is zero, with the country instead relying on an expensive combination of renewable power and volatile international gas markets. As a result, wholesale electricity prices in the UK are now 151% higher than pre-Covid levels, 175% higher than the U.S. average, and the highest among International Energy Agency member countries.

In the era of surging power demand, those countries that put affordability and reliability first will have a distinct advantage. It’s also what voters are demanding. Pushing aside the low-cost power and dispatchable fuel diversity underpinned by coal generation was – and remains – a grave mistake. Political leaders on both sides of the Atlantic are discovering that voters are no longer willing to pay that bill.