The United States is facing a new energy crisis — one that could make the climate crisis even worse.
After more than 30 years of falling or flat demand for electricity, electric utilities are forecasting the nation will need the equivalent of about 34 new nuclear plants, or 38 gigawatts, over the next five years to supply power for data centers, electrification and new industry according to filings made to the Federal Energy Regulatory Commission and compiled by Grid Strategies.
Since those reports, several utilities have further increased their near-term forecasts.
And those estimates don’t necessarily include the growth of hard-to-track but disproportionately energy-hogging cryptocurrency or cannabis farming, which are estimated to be using up to 2.3% and 1%, respectively, of the nation’s electricity. Energy demand in these industries has skyrocketed as the popularity of cryptocurrency and the legalization of marijuana have spread.
The utilities “were either just caught unaware or not believing what they were hearing,” said Rob Gramlich, president of Grid Strategies, which provided a cumulative look at the demand in December.
In response to this demand, which seems to have caught power providers in the United States flat-footed, many utilities want to build new power plants to burn methane, a fossil fuel also known as natural gas, or to delay closing their coal plants.
“I can’t recall the last time I was so concerned about the U.S. energy trajectory, as major utilities maneuver for mass gas capacity expansion in the face of load growth. Unless course is changed…[U.S. greenhouse gas] goals are effectively dead,” Tyler Norris, a doctoral fellow at Duke University, said in a recent tweet.
The issue is also a global one, as a recent International Energy Agency report says electricity for data centers, including for AI and cryptocurrency, could double by 2026.
At the same time, there hasn’t been enough construction of new transmission to bring renewables such as solar and wind to the grid.
“We see [the gas buildout] as a huge threat. We are at a moment where we need to be phasing out fossil fuels, not locking [them] in for decades longer,” said Gudrun Thompson, energy program leader for the Southern Environmental Law Center.
2022 projections “were so off”
Norris said that in 2022 he pointed out in hearings on Duke Energy’s carbon plan that the company seemed to be “lowballing” the need for more electricity, including for the growing amount of electric vehicles. At about the same time, Georgia Power told regulators it only needed the equivalent of one more midsized power plant to meet growth for the rest of the decade after its two new nuclear units at Vogtle came online.
But late last year, Georgia Power said it will need 17 times more electricity — the equivalent of four new nuclear units — than it had forecast just 18 months earlier because of new data centers and manufacturing in the state.
One member of Georgia’s Public Service Commission, known for backing Georgia Power, questioned whether the company should have seen that growth coming ahead of time.
“Talk with me about why I should have any confidence whatsoever in these projections when the 2022 projections were so off,” Commissioner Tricia Pridemore asked during a heated PSC hearing.
Economic development interests in the state call the demand a measure of success. Georgia Gov. Brian Kemp has aggressively recruited new industry to the state, and its economic development arm and Georgia Power tout low electricity prices there as a way to attract that industry.
The same is true in Texas, where data mining centers have requested the equivalent of roughly 41 new nuclear power plants to power their energy-intensive computer processes to find the cryptocurrency.
