A report from Grid Strategies LLC late last year was titled “The Era of Flat Power Demand is Over.”
Our Take, with Doug Sheridan
A report from Grid Strategies LLC late last year was titled “The Era of Flat Power Demand is Over.”
Our Take, with Doug Sheridan
Allen Brooks writes in his Energy Musings newsletter, the magnitude of the power demands of AI, data centers, and crypto mining is just emerging, and utilities are being forced to re-examine their prior demand forecasts.
As forecasts are increased, utilities are also reassessing their capital spending needs. A report from Grid Strategies LLC late last year was titled “The Era of Flat Power Demand is Over.” It was an examination of how these new technologies are changing the growth trajectory of electricity demand.
The report highlights three points—
“Over the past year, grid planners nearly doubled the 5-year load growth forecast.”
“The main drivers are investment in new manufacturing, industrial, and data center facilities.”
“The U.S. electric grid is not prepared for significant load growth.”
Grid Strategies shows how new technologies are driving higher electricity growth. To wit, the top ten electricity planning areas are now seeing future growth, unlike any years in the past decade.
For many utilities, the future world for utilities will be markedly different from the one they have lived in for the past twenty years. It’s unclear whether current utility CEOs are up to the tasks they may face. If not, then we’ll be looking at major economic disruptions as the risk of missteps in executing business strategies increases.
The problem is that these missteps, while costly, will not only be impactful for electricity utility, but may also be deadly—besides being disruptive and costly for regional economies.
Electric utilities have entered a new world with greater operational challenges—keeping supply and demand in balance—as dispatchable power plants age into retirement or are forced to retire because of new emission rules. This is shrinking the reserve power margins available for grids that can be called upon when demand spikes or supply drops. As a result, more grids are warning about the increased risk of blackouts or periods when people will have their unrestricted use of electricity suppressed.
To Sum It Up: Due to the electrify-everything push, US power demand will grow faster than ever in the past decade—pressuring grids and utility managers. The push is also causing shifts in grid seasonal peaks from summer to winter, adding even more operational challenges.
To Sum It Up: How these challenges will be met is uncertain, but the solutions will add to customers’ electricity bills. Most customers are unaware of the financial pain they are about to suffer.
Our Take: Know-nothing politicians have set in motion changes to America's energy system, and particularly the power grid, that will negatively affect its energy security, reliability and affordability. One reason is that those at the helm of many of the companies implementing energy policy do not have the incentive or skills to deliver as needed. This is especially the case at large public utilities. Hold onto your wallets.