CERAWEEK HIGHLIGHTS: Surging US power demand, tariff impacts stay center stage

The challenges of meeting accelerating US power demand and the impacts of US tariffs on the energy sector remained at the forefront of the CERAWeek by S&P Global conference in Houston on March 12 and 13.

Highlights of coverage by Platts, part of S&P Global Commodity Insights:

Surging power demand

The energy industry is not overplaying projections for unprecedented power load growth across the US in the years ahead, and long-term investment plans made in recent years by data center companies and manufacturers back up this premise, panel speakers said.

Utilities and grid operators could struggle to bring online new generation, as they face supply chain issues, such as higher costs and longer waits for equipment.

"We have 2 terawatts of resources just in the interconnect queue," said Rebecca Kujawa, president and CEO of NextEra Energy Resources. "So we need to speed up the processes for getting through the queues. We need to unlock some of the roadblocks of getting these resources to the grid, and we need to bring these low-cost resources as quickly as possible to the demand that we see today."

Carbon-free energy targets

The need to boost nuclear generation capacity to meet surging global power demand -- and the benefits of cultivating the related skills and supply chains -- drew intense interest.

Allseas, Amazon, Dow, Google, Occidental and OSGE were the initial entities from 31 countries who signed a pledge to triple nuclear capacity by 2050, the World Nuclear Association said March 12.

Google is aiming to operate on "24/7 carbon-free energy around the globe at all of our data centers and offices," according to Lucy Tian, Google's head of clean energy and decarbonization technologies.

"What we've realized is that to achieve that goal, we need a whole portfolio of technologies," Tian said. "Google has long been one of the largest nonutility purchasers of power from renewable technologies like wind and solar, but our own optimization's modeling shows that actually if you want to achieve 24/7 carbon-free energy, you need a whole range of technologies that include clean firm resources like nuclear to decarbonize the grid and have affordable, clean and reliable power."

Power grid's 'rendezvous with reality'

US Federal Energy Regulatory Commission Chairman Mark Christie said the agency must focus on wholesale power capacity market designs to help ensure US grid reliability as the nation braces for a new period of major growth in electricity demand.

Christie cited an updated forecast from Dominion Energy of up to 40 GW of new data center demand in subsidiary Dominion Energy Virginia's service territory alone, representing nearly 25% of PJM's all-time peak demand.

"Whether it's a data center or a single residential customer living on a Social Security check, we need to take into consideration treating all customers fairly," Christie said. "The rendezvous with reality is if we're going to serve what's coming, and it's already here in Virginia, we have to have the generating resources to serve it, and that's going to be combined-cycle gas."

Nimble policy needed

US policymakers should focus on market needs and understand the dynamics in the marketplace to speed up permitting, Portland General Electric CEO Maria Pope said.

"We need to speed up our policy environments," Pope said. "We probably need to have an environment where we have more trust for that to happen and the ability to not see things as an 'or' but see things as an 'and'."

Bobby Hollis, Microsoft's vice president for Energy Cloud Operations & Innovation, said certain markets are likely to be written off because of the additional time needed to develop projects there.

"We just need to create policy infrastructure that is much more nimble and flexible, and gives us greater certainty around how we can look at deployment in specific locations," Hollis said.

Tariffs not hindering LNG deals

Rio Grande LNG developer NextDecade does not view tariff uncertainty as a headwind for developing its proposed two-train expansion of the Texas LNG export facility, CEO Matt Schatzman said.

He said tariffs were also unlikely to hinder the developer from finalizing long-term supply deals needed to advance the project. Tariffs were built into NextDecade's EPC price for Train 4 and will be built into the refresh underway, Schatzman said.

"These projects -- specifically LNG -- this is how we reduce trade deficits," Schatzman said.