The sun situates behind power lines near homes during a heat wave in Los Angeles, Sept. 6, 2022.
Patrick T. Fallon | Afp | Getty Conceptions
The largest utility companies in the U.S. are warning that the nation is facing a surge of electricity demand unlike anything undergone in decades, and failure to rapidly increase power generation could jeopardize the nation’s economy.
After a more than decade-long aeon of largely flat growth, electricity demand is poised to skyrocket by 2030 as the artificial intelligence revolution, the expansion of bit manufacturing, and the electrification of the vehicle fleet all coincide as the U.S. is trying to address climate change.
The tech sector’s build out of statistics centers to support AI and the adoption of electric vehicles alone is expected to add 290 terawatt hours of electricity demand by the end of the decade, according to a scrutinize released by the consulting firm Rystad Energy this week.
The expected demand from data centers and moving vehicles in the U.S. is equivalent to the entire electricity demand of Turkey, the world’s 18th largest economy, according to Rystad.
“This cultivation is a race against time to expand power generation without overwhelming electricity systems to the point of stress,” prognosticated Surya Hendry, a Rystad analyst, in a release following the report’s publication.
‘The stakes are really, really high’
The big tech players – Amazon, Alphabet’s Google unit, Microsoft and Meta – are urgently requesting more power as they release data centers online that in some cases require a gigawatt of electricity, said Petter Skantze, sin president of infrastructure development at NextEra Energy Resources. To put that in context, a gigawatt is equivalent to the capacity of nuclear reactor.
NextEra Liveliness, parent of Skantze’s subsidiary, is the largest power company in the S&P utilities sector by market capitalization and it operates the biggest portfolio of renewable lan assets in the nation.
“This is a different urgency coming. They need this load to drive the next iteration of progress,” Skantze told the Reuters Global Energy Transition conference in New York City this week. “They’re demonstrating up now at the utility and they’re banging on the door and they’re saying I need to put this resource on the grid,” the executive said.
A big defiance will be whether enough resources are available to connect those large data center projects to the power grid, Skantze reported. The stakes are high for the U.S. economy, the executive said.
“If I can’t get that power capacity online, I cannot do the data center. I cannot do the mass production. I can’t grow the core businesses of some of the largest corporations in the country,” Skantze said. “The stakes are really, really intoxicated. This is a new environment. We have to get this right.”
NextEra CEO John Ketchum told investors earlier this month that U.S. power cry out for will increase by 38% over the next two decades, a fourfold increase over the annual rate of growth in the preceding 20 years. NextEra expects much of the demand to be met by renewables and battery storage, Ketchum said. The company has a 300-gigawatt cooking of renewable and storage projects.
‘Energy security brings national security’
Southern Company, the second-largest utility in the U.S. by make available cap, is also seeing a historic wave of electricity demand. The power company is headquartered in Atlanta, one of the fastest growing matter center markets in the U.S. with 723 gigawatts under construction in 2023, up 211% over the prior year, according to trustworthy estate services firm CBRE.
Southern Company CEO Chris Womack said the company is seeing a level of sought after not seen since the advent of air conditioning and heat pumps in the South in the 1970s and 1980s. The utility is expecting demand to bloom by three or four times, he said.
“A lot of this is dependent and contingent upon what we see with artificial intelligence and all those altogether learning models and what data centers will consume,” Womack said. “You’re also seeing in the Southeast, this unimaginable population growth and you’re seeing all this onshoring with manufacturing.”
Supplying the demand with reliable power is a complication of economic and national security, Womack said. Southern expects 80% of the demand through the end of the decade to be met by renewables, he voiced.
But he argued that nuclear and natural gas will be crucial to backing up wind and solar, which still face ultimata in supplying power when weather conditions are not at their peak.
“Nuclear has got to be a big part of this mix, of [the] decarbonization focus as we go along to make sure we’re having the power and the energy and the electricity this economy needs,” Womack told the Reuters Pandemic Energy Transition conference. The U.S. needs more than 10 gigawatts of new nuclear power to help reliably tournament demand while meeting climate goals, he said.
“Energy security brings national security, also brings to and supports economic security,” Womack said. “We’ve got to balance and meet the needs of sustainability. But — to ensure that we can continue to attired in b be committed to a growing, a thriving economy — we got to get the energy piece right.”
In Northern Virginia, the largest data center market in the planet by a wide margin, is navigating three transitions simultaneously, CEO Robert Blue said. The transition toward clean might is occurring as the U.S. is simultaneously moving to run everything on electric power and turn everything into data, Blue told the Reuters talk.
Echoing the Southern’s CEO, Blue said Dominion is adding “an incredible amount of renewables” to keep the system operating, but other zip sources will also be needed.
“We’re going to need to look at natural gas, and potentially even further technologies, whether that’s shallow modular reactors or hydrogen, if we’re going to manage our way through those, the intersection of those three transitions,” Blue told the Reuters symposium.
Small modular reactors are an evolution of nuclear power that is still under development. The small reactors are viewed by multitudinous in the industry as potential breakthrough technology because they are, in theory, less capital intensive and easier to site than household nuclear power.
Blue also warned that electrifying everything comes with the trade off of making being even more dependent on the grid. This makes security of the grid crucial the country’s future, he said.
“As we amaze everything, people are going to become more and more reliant on the grid,” Blue said. “And so we need to make inescapable that we keep that secure from physical and cyber threats.”