Grid operators faced a near-critical situation, prompting FERC's Christie to advocate for dispatchable resources.
In the face of an escalating demand for electricity due to the growth of artificial intelligence and electrification, as well as the impending retirement of energy-generating facilities, the United States is grappling with an urgent need for a reliable and sustainable power supply.
The Department of Energy has identified that approximately 104 gigawatts of energy-generating capacity is set to retire by 2030, posing a significant risk if not replaced in time, potentially leading to widespread power outages. The rapid expansion of AI and the electrification of sectors such as transportation are driving an exponential increase in electricity demand, with AI data centres alone expected to consume a substantial portion of U.S. power by 2030.
Historically, the U.S. has experienced stagnant electricity production due to manufacturing shifts abroad, which, combined with rising demand, creates a supply-demand imbalance. This imbalance threatens to disrupt critical infrastructure and daily life, with the looming risk of extended power outages potentially exceeding 800 hours annually.
The economic impact of rolling blackouts could be severe, deterring industries like primary aluminum smelting and leading to economic losses. Furthermore, the lack of abundant, low-cost energy could undermine the U.S.'s global competitiveness and resilience in a rapidly changing world.
To address these challenges, grid operators are exploring several potential solutions. Investment in renewable energy and energy storage technologies, such as solar and wind, can help stabilise the grid and meet growing demand. The U.S. has seen significant growth in these areas, with a 47% increase in utility-scale solar, wind, and battery storage capacity in the past year.
Nuclear energy development is also gaining interest as a reliable baseload power source, which could help mitigate the impact of retiring traditional power plants. Grid modernisation and efficiency can improve the management of peak demands and reduce the likelihood of blackouts. Policy changes that support the development of new energy sources while accelerating project completions can also help address the supply-demand gap.
Mark Christie, President of the Federal Energy Regulatory Commission, emphasises the need for adequate power supplies, particularly in light of this week's extreme heat and humidity. He suggests that the U.S. may need to require utilities and other load-serving entities to meet mandatory reserve power supply targets.
On Monday, the PJM Interconnection, the largest U.S. grid operator, hit a peak load of about 161 GW, which is 4.8% above its summer peak demand forecast and the highest demand since 2011. ISO New England's electricity demand peaked on Tuesday evening at 26,024 MW, the highest level seen since 2013. ISO New England managed its grid under a "power caution" due to the unexpected loss of generation in the late afternoon on Tuesday.
To mitigate these peaks, PJM called on demand response resources in various regions on Monday, Tuesday, and Wednesday, using nearly 4,000 MW of demand response to reduce its load. Gas-fired generation supplied about 12,280 MW at 6 p.m. on Tuesday, followed by nuclear power with 3,350 MW. Oil supplied 3,180 MW, net imports provided 3,015 MW, hydroelectric generation contributed 2,070 MW, renewables provided 1,540 MW, and "other" (which includes grid-level demand response) supplied 405 MW at 6 p.m. on Tuesday.
Christie supports requiring inverter-based resources like wind and solar to be able to ride through frequency and voltage excursions, instead of tripping offline. He states that not enough generation is being built and not enough is being kept, highlighting the urgent need for action.
References: [1] U.S. Energy Information Administration. (n.d.). Retirements of U.S. Electric Generating Units. Retrieved from https://www.eia.gov/electricity/planning/retirements/ [2] U.S. Energy Information Administration. (n.d.). U.S. Electricity Monthly. Retrieved from https://www.eia.gov/electricity/monthly/ [3] U.S. Energy Information Administration. (n.d.). Electricity, Renewable. Retrieved from https://www.eia.gov/energyexplained/electricity/renewable.php [4] U.S. Energy Information Administration. (n.d.). Electricity, Nuclear. Retrieved from https://www.eia.gov/energyexplained/electricity/nuclear.php [5] U.S. Energy Information Administration. (n.d.). Electricity, Demand. Retrieved from https://www.eia.gov/energyexplained/electricity/demand.php
- The urgent need for a reliable and sustainable power supply in the United States is being driven by policy-and-legislation concerning the retirement of energy-generating facilities, as well as the rapid expansion of finance within the energy sector, including AI and electrification of transportation.
- The Department of Energy's identification of 104 gigawatts of energy-generating capacity set to retire by 2030, combined with the increasing demand for electricity, poses a significant risk that, if not replaced on time, could lead to widespread power outages, affecting various sectors such as primary aluminum smelting, general-news, and critical infrastructure.
- To address this challenge, policy changes are necessary to support the development of new energy sources like renewable energy, nuclear energy, and grid modernization. These changes, along with investments in energy storage technologies and demand response resources, can help stabilize the grid, meet growing demand, and prevent extended power outages.
