Utilities, private sector not prepared for increased US power demand: experts

Flat power demand in the US has ended, and planning is necessary to prepare for the increased load ahead, speakers said at a webinar hosted by the Center for Strategic & International Studies Feb. 28.

The webinar, part of CSIS' Energy Security and Climate Change program, focused on issues of electricity demand growth and grid resilience in the US. Speakers emphasized the need to accommodate growing demand while keeping the grid resilient, affordable and ever cleaner.

The conversation followed the release of a report in December from consulting firm Grid Strategies that showed power demand across the country was increasing, reversing a trend of "basically just no power demand" in the 2000s and 2010s.

"[We] don't know if [demand is increasing by] 1% a year or 5% a year," Grid Strategies president Rob Gramlich said. "But everybody in every region and every utility now needs to get their load forecasters back and start planning for that, because they're going to need to know what that number is and plan for it."

In 2023 the US consumed about 4 trillion kWh, and in 2000 about 3.5 trillion kWh, Cy McGeady, a CSIS representative, said.

The Grid Solutions report shows a significant change in forecast peak demand growth in 2028. The 2022 forecast projected peak demand of 835 GW in 2028, while the 2023 forecast projected 852 GW. The main drivers of demand growth are investments in new manufacturing, industrial and data center facilities, according to the report.

Private sector load growth is driven by many decentralized actors competing for clean electricity, Brian Janous, former vice president of energy at Microsoft, said from the perspective of large commercial electricity consumers.

Technological advancements, such as the sudden onset of the growing AI industry, are also further driving up power demand, Janous said.

"We don't have a good national signal for how much electricity we actually need in this country," Janous said.

Speakers said to tackle demand growth, utilities must invest in infrastructure over the long term. Gramlich said proactive planning "stands in great contrast" to the current strategy of reactive, incremental grid growth, which he called the most expensive strategy.

The risks presented by underbuilding power infrastructure outweighs the risks of overbuilding, McGeady said. Underbuilding could broadly undermine strategic objectives, he said.

Janous argued that utilities are not expanding power infrastructure due to existing regulatory structures. Utilities "don't have an incentive model that says, 'go build ahead of that demand, or in anticipation of that demand,' " he said.

Speakers said they are looking to see if the Federal Energy Regulatory Commission will encourage long-term planning based on anticipated future generation and load. Also, the Senate Energy Committee is considering permit reform, Gramlich said.

"Election years are not the greatest year for passing legislation, but they are working very hard," Gramlich said. "So I'm hopeful something will come out of that."