• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Even Shell Agrees with Climate Change!
  • 8 days America should go after China but it should be done in a wise way.
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
New Tech Enhances Safety and Performance of Lithium Ion Batteries

New Tech Enhances Safety and Performance of Lithium Ion Batteries

Researchers at Incheon National University…

This Might Be The Fastest Way to Double U.S. Grid Capacity

This Might Be The Fastest Way to Double U.S. Grid Capacity

Upgrading existing lines using advanced…

The Renewable Revolution’s $3 Trillion Problem

The Renewable Revolution’s $3 Trillion Problem

Renewable energy developments are advancing…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Surging Electricity Demand Increases the Risk of Blackouts in the U.S.

  • The U.S. faces a surge in electricity demand contrary to previous predictions, leading to warnings of potential blackouts.
  • Factors contributing to the demand spike include data center expansions, industrial projects, and the Inflation Reduction Act's support for transition technologies.
  • Despite the anticipated growth in wind and solar energy, challenges like project cancellations and the retirement of coal and gas power plants pose threats to grid reliability.

Back in the middle of 2023, the International Energy Agency reported that electricity demand is on the decline in advanced economies. The IEA said at the time that demand for electricity in the U.S. alone was set to drop by 2% in 2023. Instead, demand is surging. And warnings of blackouts are multiplying.

This weekend, the Electric Reliability Council of Texas issued a call for electricity conservation to Texans for Monday morning to avoid a shortage. The reason: a spike in demand due to winter weather combined with insufficient wind speeds for the state’s massive wind power generation capacity.

It is not just Texas, however. And it is not just in winter—and summer—when demand is reaching new peaks. It’s all over the States. And it is a long-term problem that may lead to blackouts.

The North American Electric Reliability Corporation reported the danger in its latest Long-Term Reliability Assessment, released in December. It then reported, last week, that retail sales of electricity this year are likely to hit a record high of close to 4 billion kWh. Not only that, but demand over the next ten years in the U.S. is going to grow at a rate twice as high as it used to over the last five years. And it’s not because of households being reckless with their electricity consumption.

“The explosion in data centres is very, very real . . . a lot of utilities are having issues keeping up with that demand,” NERC chief executive Jim Robb told the Financial Times last week.

Because of that explosion, some utilities were stalling data center connections to the grid for fear of causing reliability problems for themselves, Robb explained. Yet it is not only data centers driving the demand surge. It is also the Inflation Reduction Act and the money it has pledged in support of transition technology such as EVs and batteries—and heat pumps.

The FT cited in an article a report produced by consultancy Grid Strategies that calculated the largest driver of this higher electricity demand in the U.S. going forward would be some $481 billion worth of industrial projects announced since 2021. Including things like chip and battery manufacturing.

There is also some $150 billion in new data center projects that have been announced and are set to be built by 2028. And, of course, there are the millions of EVs that should hit U.S. roads in the coming years—provided carmakers and dealers somehow reverse the slowdown in sales.

Meanwhile, electricity generation capacity additions will be dominated by wind and solar, the Energy Information Administration said in its latest Short-Term Energy Outlook. Per the report, solar would be the biggest source of new generation capacity, at 36 GW in additions this year and 43 GW in 2025.

Output from solar would also increase, from 162 billion kWh last year to 230 billion kWh this year. So would output from wind turbines, the EIA said, estimating the 2024 gain at 30 billion kWh.

With such abundant wind and solar projected output, exceeding this year’s expected retail electricity sales many times over, all should be well. And it would have been if wind and solar generated round the clock and peak production coincided with peak demand. Also, the forecast additions are not certain to materialize: opposition to new wind and solar installations in on the rise in parts of the United States, leading to project cancellations.

While this is happening, electricity demand is growing—and coal and gas power plants are being retired as it becomes increasingly difficult to compete with heavily subsidized wind and solar installations.

This accelerated retirement of baseload generation capacity led NERC to warn last December that two-thirds of the country risks sinking into blackouts in peak winter weather. Loss of coal and gas generation capacity caused rolling blackouts in Tennessee in winter 2022 amid Winter Storm Elliott—though in the case of Tennessee it was not retirement that was the reason but rather bad maintenance and the cold.

There appears to be a growing divide between electricity demand trends, which appear to involve strong growth and, with it, the unavoidable need for reliable supply, and trends in the supply half of the equation, which are focused on so-called low-carbon sources of energy such as wind and solar. As long as utilities can build all the necessary transmission lines to take the electricity from the wind and solar installations to the consumers—including data centers.

In mid-2023, the Federal Energy Regulatory Commission warned there would be blackouts. The warning was spelled out by Commissioner Mark C. Christie at a testimony to the House Subcommittee on Energy, Climate, and Grid Security.

Detailing developments in grid security, Christie said that the problem was not “the addition of intermittent resources such as wind and solar, but the far too rapid subtraction of dispatchable resources, especially coal and gas.”

ADVERTISEMENT

“One nameplate megawatt of wind or solar is simply not equal to one nameplate megawatt of gas, coal or nuclear,” the commissioner went on to add, as quoted by media at the time.

Yet it seems that, if the EIA is right, the trend of adding wind and solar, and retiring coal and gas is set to continue. How this will fit with rising demand for electricity is perhaps the most important question about the energy transition right now.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News