Electricity demand growth: How will the grid keep pace?
Utilities have https://scriptmafia.org/tutorials/576944-iso-50001-energy-management-master-energy-management-system.html shown in the past decade that they can out-do their own forecasts for the share of renewable energy they can economically bring online. Public Service Company of Colorado, an electric utility serving Denver and other areas in the state, announced in a 2011 regulatory filing that it would generate only about 22 percent of its electricity from wind and solar power plants by 2020. Many utilities have announced investment plans that rely on new gas-fired power plants and the retention of aging, uneconomic coal-fired power plants to help meet projected load growth.
Unlike a traditional commercial business, whose shareholders bear investment risk, regulated utilities can pass the costs of poor investment decisions onto ratepayers over decades. A renewed focus on the load side of the equation will ensure a more cost-effective and efficient grid built to respond to rapidly changing conditions, while also benefiting and protecting customers and mitigating carbon emissions. In the era of load growth and climate change, PIMs should target measures that provide reliability and affordability benefits for all customers. At the consumer level, program success hinges on people and businesses being willing and able to participate in programs, which may require adoption of new technologies, and a certain level of trust in their utilities (or retail electric providers) and aggregators.
Likewise, NIETCs should be given primary siting authority and expanded federal financing tools that “buy-down” cost allocation concerns at the state level. Congress should direct the National Interest Electric Transmission Corridor (NIETC) authority toward projects that expand regional and interregional transfer capacity in regions facing heavy demand growth and hosting strategic industries. This logic applies equally to regions organized under vertically integrated utilities and regions with restructured markets. However, 90 percent of this spending has flowed into “local” and “reliability” projects, which receive no regulatory or policy oversight and deliver little to no additional system capacity for serving demand growth. Recent years have seen a vast increase in transmission and distribution spending by utilities, reaching roughly $25 billion annually, which makes additional investment into high-voltage transmission projects appear unaffordable. At a macro level, a slow and heavily constrained expansion of demand represents considerable lost economic, social, and strategic value for the nation.
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- Public Service Company of Colorado, an electric utility serving Denver and other areas in the state, announced in a 2011 regulatory filing that it would generate only about 22 percent of its electricity from wind and solar power plants by 2020.
- As recently as a decade ago, the supply and demand for electricity was fairly predictable.
- Furthermore, all server designs must pass the NVIDIA-certified systems program, which includes rigorous “power consumption evaluations” to ensure that components function efficiently within the server.cxli
- At a state and local level, policymakers must strike a delicate balance between economic development interests and commitments to energy affordability, reliability, public health and emissions reductions.
- Likewise, NIETCs should be given primary siting authority and expanded federal financing tools that “buy-down” cost allocation concerns at the state level.
Ongoing development, expansion, and enforcement of these types of laws can help ensure the new energy load is met by clean sources. In May 2024, Australia announced that all data centers serving federal agencies must achieve “excellent” or greater environmental performance standards by July 2025. At a state and local level, policymakers must strike a delicate balance between economic development interests and commitments to energy affordability, reliability, public health and emissions reductions. At the federal level, the new Trump administration has put its full support behind encouraging new data centers and producing significantly more oil and gas to meet energy demands. While some projects are exploring how data center loads can become more flexible and put less stress on the grid during times of high demand, they are still in their early stages.
Electricity Demand Growth in the United States: Trends, Drivers, and Forecasts
By 2030, EVs are projected to represent up to 46% of light-duty vehicle sales, requiring over 42.2 million charging points across the country. Since January 2023, over 50 GW of new data center capacity have been announced. One analysis estimates they could account for 44% of all U.S. load growth between 2023 and 2028. State and federal energy regulators, as well as utilities and the federal government broadly, will be critical actors in addressing this new challenge, and they are actively pursuing solutions. What’s more, new demand could put additional strain on an aging electricity grid that is overdue for upgrades and expansion. These latest load forecasts caught many by surprise and are creating turbulence across the energy sector.
A symphony of demand side solutions ready to perform
Some states have less than 1 percent of peak being met with demand side solutions, with only a handful exceeding 10 percent. Communication and software tools, like distributed energy management system (DERMS), can make dispersed resources visible to utilities and grid operators so they can plan for and manage them in ways https://themors.com/two-silvers-one-surge-how-hall-and-ogden-rewrote-the-days-script-for-team-usa/ similar to larger supply side resources. Like a combination of complementary musical instruments, demand side solutions encompass a wide range of technologies and applications that have the “potential to moderate the growth of both electricity consumption and peak load,” according to Brattle. Given the time and money required to build new generation and transmission to meet new demand, Silverstein argues “we can’t build our way out of this.” Now is the time to activate more energy efficiency and demand side solutions, which are cheaper and faster to deploy, and can also buy us time to make prudent supply side resource adjustments.” With climate change-driven weather shifts, demand has become less predictable and at times terrifying.”
- At the micro level, heavily delayed and high-priced interconnection due to a lack of system capacity risks destruction of latent, “waiting in the wings” electric demand, causing missed opportunities for local economic activity, jobs, and tax bases.
- In the era of load growth and climate change, PIMs should target measures that provide reliability and affordability benefits for all customers.
- The utility has seen annual large-load growth of 5–7% for the last decade and hit a peak of nearly 1,000 MW in summer 2023.
- Congress should direct the National Interest Electric Transmission Corridor (NIETC) authority toward projects that expand regional and interregional transfer capacity in regions facing heavy demand growth and hosting strategic industries.
What Else Should Utilities Understand in Order to Adapt Effectively?
Historically, utilities have struggled to accurately predict demand growth; from 2005 to 2015, utilities and grid operators consistently overestimated growth by an average of 12 percentage points. In that capacity, he has led development of roadmaps on sustainable data centers, artificial intelligence for climate change mitigation, low-carbon ammonia, biomass carbon removal and storage, industrial decarbonization, direct air capture and carbon dioxide utilization, among other topics. Diego’s research and practical experience focuses on energy policy and geopolitics in Latin America, particularly on natural gas and LNG markets, critical minerals supply chains, and their role in the low-carbon energy transition. Certain state level actions, new PJM tariff mechanisms, and federal intervention by FERC require data centers to finance new generation and transmission upgrades and even accept curtailment risks, such as in PJM. The initiative is structured into specialized workstreams focused on developing data center design specifications informed by grid needs, testing distributed generation and storage capabilities, and creating equitable program structures to attract flexible loads.cxliii One example is the Controls Reference Design (CRD1), which provides a framework for “precise, real-time management of critical power and cooling resources.” According to NVIDIA, these efforts are intended to enhance operational efficiency and prevent power overloads.cxlii
