Load Growth from AI, Data Centers Could Strain Grid, Threaten Climate Goals

Pretty daunting challenge emerging as the growth of Data Centers, driven in part by unexpectedly rapid adoption of AI technologies, fuels a jump in electricity demand.
Solutions will have to include breaking logjams on permitting for clean energy, bringing new transmission on line, and standing up virtual power plants.
More discussion on these below and in coming posts.

Utility Dive:

• U.S. electric load is growing significantly faster than grid planners previously expected, led by new manufacturing and industry and the growth of data centers, according to a Tuesday report from Grid Strategies. Electrification, hydrogen production and severe weather are also contributing.
• Reports filed this year with the Federal Energy Regulatory Commission show grid planners expect nationwide electricity demand to grow 4.7 % over the next five years — while 2022 estimates called for just 2.6% growth. Peak demand is expected to grow 38 GW over the next five years.
• The electric grid “is not prepared for significant load growth,” the report concludes. “Low transfer capability between regions is a key risk for reliability if load growth outpaces deployment of new generation in some regions.”

New York Times:

Something unusual is happening in America. Demand for electricity, which has stayed largely flat for two decades, has begun to surge.

Over the past year, electric utilities have nearly doubled their forecasts of how much additional power they’ll need by 2028 as they confront an unexpected explosion in the number of data centers, an abrupt resurgence in manufacturing driven by new federal laws, and millions of electric vehicles being plugged in.

Many power companies were already struggling to keep the lights on, especially during extreme weather, and say the strain on grids will only increase. Peak demand in the summer is projected to grow by 38,000 megawatts nationwide in the next five years, according to an analysis by the consulting firm Grid Strategies, which is like adding another California to the grid.

“The numbers we’re seeing are pretty crazy,” said Daniel Brooks, vice president of integrated grid and energy systems at the Electric Power Research Institute, a nonprofit organization.

In an ironic twist, the swelling appetite for more electricity, driven not only by electric cars but also by battery and solar factories and other aspects of the clean-energy transition, could also jeopardize the country’s plans to fight climate change.

To meet spiking demand, utilities in states like Georgia, North Carolina, South Carolina, Tennessee and Virginia are proposing to build dozens of power plants over the next 15 years that would burn natural gas. In Kansas, one utility has postponed the retirement of a coal plant to help power a giant electric-car battery factory.

Burning more gas and coal runs counter to President Biden’s pledge to halve the nation’s planet-warming greenhouse gases and to generate all of America’s electricity from pollution-free sources such as wind, solar and nuclear by 2035.

“I can’t recall the last time I was so alarmed about the country’s energy trajectory,” said Tyler H. Norris, a former solar developer and expert in power systems who is now pursuing a doctorate at Duke University. If a wave of new gas-fired plants gets approved by state regulators, he said, “it is game over for the Biden administration’s 2035 decarbonization goal.”

Some utilities say they need additional fossil fuel capacity because cleaner alternatives like wind or solar power aren’t growing fast enough and can be bogged down by delayed permits and snarled supply chains. While a data center can be built in just one year, it can take five years or longer to connect renewable energy projects to the grid and a decade to build some of the long-distance power lines they require. Utilities also note that data centers and factories need power 24 hours a day, something wind and solar can’t do alone.

Yet many regulated utilities also have financial incentives to build new gas plants, since they can recover their costs to build plants, wires and other equipment from ratepayers and pocket an additional percentage as profit. As a result, critics say, utilities often overlook, or even block, ways to make existing power systems more efficient or to integrate more renewable energy into the grid.

“It is entirely feasible to meet growing electricity demand without so much gas, but it requires regulators to challenge the utilities and push for less-traditional solutions,” Mr. Norris said.

The stakes are high. If more power isn’t brought online relatively soon, large portions of the country could risk blackouts, according to a recent report by the North American Electric Reliability Corporation, which monitors the health of the nation’s electric grids.

“Right now everyone’s getting caught flat-footed” by rising demand for electricity, said John Wilson, a vice president at Grid Strategies.

Finding enough power could be a challenge, since PJM’s process for connecting renewable energy projects to the grid has been afflicted by delays. Utilities in PJM have been preparing to retire roughly 40,000 megawatts of mostly coal, gas and oil-burning power plants this decade as states seek to transition away from fossil fuels. PJM has already approved an additional 40,000 megawatts of mostly wind, solar and batteries as partial replacements. But many of those projects have been stalled by local opposition or trouble getting vital equipment like transformers.

“We have a huge concern about that,” Mr. Seiler said. “Folks aren’t building.”

Nationwide, just 251 miles of high-voltage transmission lines were completed last year, a number that has been declining for a decade.

So far, one state that has kept pace with explosive demand is Texas, where electricity use has risen 29 percent over the past decade, partly driven by things like bitcoin mining, liquefied natural gas terminals and the electrification of oil fields. Texas’s streamlined permitting process allows wind, solar and battery projects to get built and connected faster than almost anywhere else, and the state zoomed past California last year to lead the nation in large-scale solar power.

“Texas still has problems, but there’s a lot to learn from how the state makes it easier to build clean energy,” said Devin Hartman, director of energy and environmental policy at the R Street Institute.