Executives of U.S. regional power grids are warning they face new and unprecedented challenges as energy demand grows and the industry takes on the enormous shift to carbon-free electricity.
Without policies aimed at managing the transition from coal- and natural-gas-fueled power plants to renewable energy and advanced technology, the U.S. grid could reach a cliff’s edge of widespread blackout vulnerabilities before the end of this decade, leaders of four grid organizations said last week during an industry conference.
“What keeps me up at night is the winter of 2032,” said Richard Dewey, CEO of the New York Independent System Operator, at the conference sponsored by the Electric Power Supply Association (EPSA).
By that time, New York’s cushion of backup generation resources will be gone, he said, while power demand from the use of artificial intelligence, digital data centers, electrified vehicles and home heating will be mushrooming.
“I don’t know what fills that gap in the year 2032,” Dewey said. “It feels like that’s a long way away, but that’s like tomorrow,” he said — considering how long it takes to build new sources of electricity and transmission.
Dewey’s comments and those of other grid managers reflect cross-cutting tensions and realities. One is economic. The U.S. economy has rebounded since 2021. Government spending and tax incentives have generated private investment. Factories for green technology, electric cars, batteries and microchips — and energy policies aimed at deploying that technology — are changing the calculus around future electricity demand.
Moving from fossil fuels to wind and solar power, battery storage, and other advanced energy technology will require more high-voltage electric transmission. Those projects take years to build, and they require planning.
Poor planning and coordination have slowed development of clean energy projects, just as other sources of electricity generation — mainly coal — are being retired.
A push to close natural gas plants is also a pressure point: Gas is used for about 40 percent of U.S. electricity generation. Climate activists say new investments in gas extend the life of fossil fuels when they need to be phased out.
Then there is politics. Republicans, led by presumptive presidential nominee Donald Trump, have said they’d reverse course on President Joe Biden’s climate policies that are driving a wrenching transition to cleaner fuels.
“We have a lot of issues that have to be solved and we do not control the pace of the transition,” said Gordon van Welie, chief executive of ISO New England, manager of that region’s power network. “It’s happening, and we are running like crazy” to keep up.
“How do we deal with the strain that’s coming because electrification is going to drive massive demand for electricity?” van Welie said.
Winter peaks
One risk scenario is during future winters, the grid’s most vulnerable period, van Welie said. Solar farms dominate the queue of proposed new generation projects needed to meet demand. Output plummets under gray skies and snow, grid officials point out.
Meanwhile, coal- and gas-fired generation continues to retire faster than new generation arrives to take its place, according to the long-term analysis by North American Electric Reliability (NERC), the grid monitor. Gas generation supplies failed during two huge winter storms: Uri, which struck the central U.S. in 2021, and Elliott, which came the next year and triggered power blackouts in the Southeast and a near crisis for gas heating supplies in New York City.
“You have to ask yourself how we would have fared under Winter Storm Elliott if we had 25 percent more load on the system,” van Welie said. “The answer is probably not well.”
NERC CEO Jim Robb, also speaking at last week’s conference, said “I’m an optimist [who] thinks that if we really focus as an industry, we can get there. But the list of things to get done is extraordinarily long.
“It’s ‘Everything Everywhere All at Once,’” he said, picking up the title of the 2022 Academy Award-winning film.
The electricity industry has been flashing warning signals about the risks to grid reliability posed by Biden’s drive to zero out most power grid emissions by 2035. The messaging from executives in the industry has intensified since the EPA proposed greenhouse gas restrictions on coal power plants and selected gas generation units.
Maggie Shober, research director at the Southern Alliance for Clean Energy, criticized power companies for not putting more dollars into customer-level energy conservation strategies that would reduce the threat of a peak demand crises.
“Customer resources like smart water heaters, managed charging and smart thermostats are great resilience tools,” Shober said in an interview.
Grid officials keep focusing on the urgent need for more electrons.
NERC’s Robb testified to Congress last year, “Conventional generation is retiring at an unprecedented rate,” he said. “We must identify new resources to replace retiring generation that provides both sufficient energy and essential reliability services.”
“NERC is right,” San Francisco-based Energy Innovation: Policy & Technology said in a report on the dilemma last year. Except for Texas, where investments in renewables and battery storage keeps growing, “much of the rest of the country is struggling to add new clean energy resources fast enough to replace retiring assets,” the report said.
Wind, solar and batteries can fill a much greater share of the missing energy, “if policies and markets support this rapid transition,” it said.
But policy and markets aren’t doing that, grid executives said.
Multiple analyses agree that the amount of interregional transmission capacity would have to double or triple by 2035 to move much greater volumes of wind and solar power to customers while also meeting higher demands from an electrifying economy.
Republican leaders in Congress, rejecting Democrats’ call for urgent climate action, have not backed proposals to streamline siting and permitting of transmission lines. That leaves big grid wires projects still struggling to line up approvals from states the lines must cross.
The builders and the fixers
Congressional action has, however, lit a fuse under demands for more electricity from new factories and industrial projects, at the same time that the arrival of artificial intelligence and crypto-mining are feeding an explosive growth in data centers.
The CHIPS and Science Act and the Inflation Reduction Act have launched a boom in new job construction in New York, Dewey said. The gain in investment and jobs is a big plus, he added, but resulting demand for more electrons is eating up the state’s cushion of surplus grid capacity.
Pablo Vegas, CEO of the Electric Reliability Council of Texas, grid operator for most of that state, cited new studies of rising demand for electricity, which could require 25,000 megawatts of new generation capacity in five or six years.
“That’s like adding another whole Dallas-Fort Worth to the state,” Vegas said at the EPSA meeting. “All of a sudden we’re seeing … this [electricity demand] explosion that potentially could show up.”
New high-voltage power lines take five years to plan and build on average and a lot of the new power demand from factories, data centers, and oil and gas development is coming faster than that, Vegas said. “The big question is, OK, if we’re going to add 25 gigawatts [of demand] over the next five years, what’s going to serve it?”
The new demand profile grid operators and utilities must respond to is becoming more volatile and unpredictable — far outside the familiar patterns that have guided operations for generations, grid experts said.
Data centers are one reason why. Another is the increase in extreme weather barrages that are striking grid operations.
Vegas noted that on a moderate spring day, Texas could be getting half of its electricity from wind and solar plants. But that flow of power can move up or down very quickly if a big weather system moves through, clouding the sky or snuffing out wind. “Being able to respond to that has become a very unique challenge for us,” Vegas said.
With solar, wind and battery storage now the dominant sources of new grid resources, the U.S. has a dilemma, speakers at the conference said.
On the one hand, the transition is not moving fast enough to reach the Biden clean energy goals, putting the U.S. in front of the global challenge to restrain the worst impact.
The Biden administration has thrown federal support behind potential new clean energy technologies for the 2030s, including offshore wind, advanced small modular nuclear reactors and hydrogen fuels. But in most cases, energy markets and distribution utilities aren’t yet willing to pay a premium to accelerate the arrival of supplies of clean power from these sources, speakers at the conference said.
“We are not on target to achieve a noncarbon grid in 11 years,” said Jason Grumet, CEO of the American Clean Power Association. “It’s just the truth. Recognizing that we are not on track is the first step.”
But the momentum toward clean energy compels a serious concentration on making the transition work, he added.
“The climate debate in the last 20 years has been dominated most by the loudest fighters,” Grumet said.
That’s meant partisans for wind, solar, storage, nuclear and hydrogen technologies vying to secure a future for their strategies.
“The future is around the builders and the fixers,” Grumet proposed.
