Resurgent US electricity demand sparks power grid warnings (ft.com)
“…The North American Electric Reliability Corporation, a regulatory body, has sharply increased projections for peak power demand for the next decade, reversing steady or falling growth rates from previous years…”
“…Jim Robb, NERC’s chief executive, told the Financial Times that projected demand growth over the next 10 years was now nearly double what it was five years ago. “The explosion in data centres is very, very real . . . a lot of utilities are having issues keeping up with that demand,” said Robb, whose organisation is focused on improving the reliability of the bulk power system in North America. North American Electric Reliability Corporation chief Jim Robb says there is an urgent need to build more transmission lines to connect more renewable generation to the grid while adding more natural gas generation to boost reliability, at least in the short term.””
“Robb said electricity networks stretching down the centre of the country from Minnesota to Louisiana already faced “high risk” of outages, particularly during severe weather events. Some utilities were delaying connecting industrial and data centre customers because of reliability concerns, a trend that risks undermining Biden administration policies aimed at repatriating manufacturing from overseas, he added.”
“US power demand rose gradually for almost two decades as efficiency gains offset the effects of population and economic growth. But that trend is now poised to change as more energy technologies run on electricity. Demand is getting an extra boost from the Inflation Reduction Act, the climate and tax law passed in 2022 that provides subsidies to attract inward investment and accelerate the energy transition.”
“Grid Strategies, a US consultancy, said that nationwide forecasts for electricity demand growth over the next five years had “shot up” from 2.6 per cent in 2022 to 4.7 per cent in 2023, in a report based on an analysis of utility filings to the Federal Energy Regulatory Commission.”
““This is likely an underestimate of demand,” said John Wilson, co-author of a report titled “The era of flat power growth is over”, adding that some utilities have publicly expressed higher demand expectations than they have reported in filings to regulators.”
“Wilson said the largest driver of increased electricity demand was $481bn in industrial projects that have been announced since 2021, including the manufacturing of chips and batteries. Another big driver was the anticipated construction of $150bn in new data centres by 2028 and clean technologies such as electric heat pumps, water heaters and cars…”
“…One of the most visible examples of the rise in electricity demand is “data centre alley” in northern Virginia, home of the world’s largest concentration of internet servers. Incentives offered by the state government have attracted more than 250 data centres supporting operations run by Amazon, Microsoft, Google and other web giants.”
“Peak power required by the industry doubled between 2018 and 2022 to 2,767 megawatts, according to Dominion Energy, the main utility in the region…”
“…This provides a growth opportunity for utilities such as Dominion, which makes about a fifth of its electricity sales to data centres. But it also poses reliability challenges, which in 2022 forced Dominion temporarily to stop connecting new data centre customers.”
“The company has since resumed making new connections, but is rationing electricity to some customers because of constraints on transmission lines. Dominion recently forecast electricity demand would grow 85 per cent in its service territory over the next 15 years, nearly five times faster than the growth over the previous 15 years…”