The United States needs to build between 1300 and 1900 new power plants in the next 20 yr to accommodate the projected increase in energy demand, according to the Bush administration's new proposed National Energy Policy. Announced by President Bush in May, the policy estimates U.S. energy capacity needs will increase by 393,000 MW by 2020.

According to the National Energy Policy Development Group (NEPDG), the gap between supply and demand has been increasing for more than a decade. Since 1989, electricity sales have increased 2.1% per year, while transmission capacity has increased by only 0.8% annually.

However, the NEPDG's report wasn't all doom and gloom. The group believes improvements in energy efficiency can lessen the strain on energy demand. Industry analysts predict these possible improvements could reduce demand by 0.3% per year over the next 20 yr. Such a reduction could cut the estimated increase in necessary energy capacity by 60,000 MW.