As the graph below shows, around 2028, the projected demand outstrips the available generation – in large part due to Trump administration blocks on new renewable generation.
But additionally, there is a lot of low hanging fruit available in optimizing the grid that we have.
That’s what Jigar Shah and his guest are discussing above. Grid optimization using VPP, Virtual Power Plants, but also reconductoring of existing lines to increase capacity, Dynamic Line Rating, which uses sensors and AI to maximize the usage of every power line (not every line is carrying its full capacity all the time) – and demand response.
Two Data Center projects in the upper midwest are pointing the way on this, and there is evidence that this approach will gain traction, in particular with the recognition that the availability of gas turbines is only getting iffier with the closure of the Strait of Hormuz, and prices for natural gas are going to be thrown off kilter by that closure as well.
Alphabet Inc.’s Google is moving ahead with plans for a major data center in Michigan that features a 20-year electricity contract requiring it to cover the full expense of adding a haul of new clean power.
Currently, DTE produces most of its electricity from fossil fuels, with about 41% coming from coal, 26% coming from natural gas and the remainder coming mostly from nuclear and wind, according to its website. Google said in its statement that its data center operations will be served by 2.7 gigawatts of new resources, including solar, storage and demand flexibility.
Google’s commitment in turn to fully cover the costs of 1,600 megawatts of new renewable energy and 480 megawatts of battery storage is also novel and may serve as a playbook for other tech firms desperate electricity to power their ever-growing AI computing needs.
Xcel Energy in Minnesota is poised to become the first utility in the nation to build and operate its own virtual power plant.
For the past six months, fans and foes have debated the novel plan, which will see Xcel deploy hundreds of megawatts of small-scale batteries at customer sites across its territory. The Minnesota Public Utilities Commission ultimately approved a version of Xcel’s plan last week.
Under the new program, known as Capacity*Connect, Xcel will spend up to $430 million to deploy up to 200 megawatts of batteries, in 1-megawatt to 3-megawatt increments, over the next two years. It’s a rare arrangement: Almost every other virtual power plant program in the U.S. is organized around third-party companies, like solar and battery vendors or specialized “aggregators,” that tap into energy resources installed and owned by customers.
VPPs, which aggregate distributed energy resources to mimic the output of a traditional power plant, are seen as a key way to get more energy onto the existing grid. By using customer-owned energy resources or small-scale batteries, VPPs can help utilities reduce the need to build or dispatch expensive power plants.
Your home offers another solution to the energy shortage. The concept is simple. When thousands of homes are coordinated together by software into what are known as distributed or virtual power plants (VPPs), they can deliver or free up a power plant’s worth of electricity for the grid by dialing down consumption from smart appliances like electric water heaters or dispatching electricity from home batteries. This approach can bring hundreds of megawatts online in months, not the years it can take to build a new power plant.
Transmission lines move electricity through space to where it’s needed. VPPs deliver power the moment it’s needed most. The grid tends to run at half capacity, because it’s built for peak demand, so storing cheap off-peak power and discharging it when demand spikes effectively creates new capacity. Home batteries can recharge later using cheap power — often wind and solar — as demand ebbs.
Last July, the largest residential test in U.S. history delivered 535 MW in California, enough to power half of San Francisco for two hours, from more than 100,000 home batteries in California. Building equivalent capacity from natural gas plants would cost twice as much, estimates the U.S. Department of Energy.
Note that happens after 2028 – which is part of the great shame of all of this. A lot of the damage from this Administration won’t truly be felt until after Trump is a memory.