Failure to meet surging energy demand will jeopardize economic growth, utility execs warn

The sun sets behind power lines near homes during a heat wave in Los Angeles, Sept. 6, 2022.

Patrick T. Fallon | Afp | Getty Images

The largest utility companies in the U.S. are warning that the nation is facing a surge of electricity demand unlike anything seen in decades, and failure to rapidly increase power generation could jeopardize the nation’s economy.

After a more than decade-long period of largely flat growth, electricity demand is poised to skyrocket by 2030 as the artificial intelligence revolution, the expansion of chip 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 data 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 report released by the consulting firm Rystad Energy this week.

The expected demand from data centers and electric vehicles in the U.S. is equivalent to the entire electricity demand of Turkey, the world’s 18th largest economy, according to Rystad.

“This growth is a race against time to expand power generation without overwhelming electricity systems to the point of stress,” said Surya Hendry, a Rystad analyst, in a release following the report’s publication.

‘The stakes are really, really high’

A big challenge will be whether enough resources are available to connect those large data center projects to the power grid, Skantze said. 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 manufacturing. I can’t grow the core businesses of some of the largest corporations in the country,” Skantze said. “The stakes are really, really high. This is a new environment. We have to get this right.”

NextEra CEO John Ketchum told investors earlier this month that U.S. power demand will increase by 38% over the next two decades, a fourfold increase over the annual rate of growth in the previous 20 years. NextEra expects much of the demand to be met by renewables and battery storage, Ketchum said. The company has a 300-gigawatt pipeline of renewable and storage projects.

‘Energy security brings national security’

But he argued that nuclear and natural gas will be crucial to backing up wind and solar, which still face challenges 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 forward to make sure we’re having the power and the energy and the electricity this economy needs,” Womack told the Reuters Global Energy Transition conference. The U.S. needs more than 10 gigawatts of new nuclear power to help reliably meet demand while meeting climate goals, he said.

“Energy security brings national security, also brings about 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 have a growing, a thriving economy — we got to get the energy piece right.”

In Northern Virginia, the largest data center market in the world by a wide margin, Dominion Energy is navigating three transitions simultaneously, CEO Robert Blue said. The transition toward clean energy is occurring as the U.S. is simultaneously moving to run everything on electric power and turn everything into data, Blue told the Reuters conference.

Echoing the Southern’s CEO, Blue said Dominion is adding “an incredible amount of renewables” to keep the system operating, but other energy sources will also be needed.

“We’re going to need to look at natural gas, and potentially even further technologies, whether that’s small modular reactors or hydrogen, if we’re going to manage our way through those, the intersection of those three transitions,” Blue told the Reuters conference.

Small modular reactors are an evolution of nuclear power that is still under development. The small reactors are viewed by many in the industry as potential breakthrough technology because they are, in theory, less capital intensive and easier to site than traditional nuclear power.

Blue also warned that electrifying everything comes with the trade off of making people even more dependent on the grid. This makes security of the grid crucial the country’s future, he said.

“As we electrify everything, people are going to become more and more reliant on the grid,” Blue said. “And so we need to make sure that we keep that secure from physical and cyber threats.”

Don’t miss these energy insights from CNBC PRO:

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Todays Chronic is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – todayschronic.com. The content will be deleted within 24 hours.

Leave a Comment