top of page

Balancing Increased Electric Demand, Climate Goals, Presents Challenges

The U.S. is wrestling with an unprecedented challenge as it attempts to decarbonize electric production in order to meet climate goals at the same time that demand for power is exploding.

The EFI (Energy Futures Initiative) Foundation recently published a report based on a workshop that included about 30 stakeholders representing utilities, industry, system operators, former policymakers, regulators and consumers to identify the challenges that must be addressed in order to keep the electric grid operating reliability and safely. “Managing Unprecedented Electricity Demand Growth on the Path to Net-Zero Emissions” discusses the implications and actions that need to be taken.

Decarbonization of power plants, industry, vehicles, and residential heating through electrification is seen as key to meeting net-zero emissions goals. However, after years of relatively flat power demand, the landscape has suddenly changed, putting pressure on utilities and grid operators.

Driven by incentives to encourage domestic manufacturing and clean energy in federal legislation, electric demand has been increasing rapidly. “Data-center proliferation is also a major driver of near-term load growth, and the rapid expansion of AI is exacerbating their load requirements,” the report states. Load growth could double or even triple over the next five years with huge implications for the power sector in ensuring reliability.

At present, data centers account for 2.5% of electric consumption but that is expected to increase to up to 10% by 2030. Data centers use huge amounts of power and EFI panelists estimated that electric demand forecasts are undercounting the amount of power needed by three to five gigawatts.

At the same time as demand is increasing, grid operators have been grappling with an increasing percentage of power coming from intermittent renewable sources like solar and wind, and a number of coal-fired power plants that can produce power 24/7 have been retired due to their high emissions and tougher federal regulations.

The report suggests that meeting near-term growth will require more generation capacity and may require relying more on natural gas-fired plants, which emit much less CO2, extending use of coal-fired plants, and adding rapidly-deployable natural gas “peaker” plants to ensure grid reliability. “These measures present potential conflicts to pursuing decarbonization goals while adhering to environmental regulations and meeting electricity demand,” the report states.

Several other themes also came up in the workshop, including that region-specific approaches are necessary for managing near-term load growth. Some areas of the country are experiencing higher demand, including Arizona and Nevada in the Southwest, Michigan and Indiana in the Midwest, and Georgia and the Carolinas in the Southeast. Each region has varying ways to meet and manage this challenge.

The report also noted that stakeholder alignment is critical to meet the dual challenges of managing reliability and planning for continued decarbonization. Needed investments in generation, transmission and distribution, and other resources must be made while closely coordinating large demand additions.

At the same time, there needs to be flexibility to meet increased demand, and the report noted that “carbon-managed” electricity sources must be recognized, such as natural gas with carbon capture and sequestration. Further discussion is needed in a number of areas, the report concluded, in order for the continuation of a reliable, affordable energy supply in the U.S.

18 views0 comments


bottom of page