Electricity Demand Growth from AI and Increased Electrification Puts the U.S. Electric Grid in Jeopardy of Blackouts

Guest Post from the Institute for Energy Research.

A Department of Energy (DOE) report indicates that the United States could face significant power shortages by 2030 if the closure of existing coal and natural gas-fired generation facilities continues amid huge growth in electricity demand from artificial intelligence (AI) data centers.

The report identifies 104 gigawatts of existing capacity that is slated for closure in the next five years, while 210 gigawatts of new capacity is expected to come online in that time.

Despite that large number, the new capacity is mostly wind and solar power, whose generation levels are a fourth or a third of what traditional sources produce, and must be backed up by duplicative power when the sun is not shining and the wind is not blowing. If existing power plants are not kept operational, potential outages could occur in the mid-Atlantic and Great Plains regions.

This finding is also supported by the North American Electric Reliability Corp. (NERC), which is responsible for the reliable operation of the power grid.

Out of the 210 gigawatts of new generation estimated to come online by 2030, only 22 gigawatts are considered “firm generation” that would come from coal, natural gas, or nuclear power. Around 124 gigawatts would be new solar, 32 gigawatts would be new wind-generated power, and 31 gigawatts would consist of four-hour storage batteries that must get their power from another generating source.

Batteries support wind and solar power by releasing the stored power when there is no wind or sun. Because wind and solar are intermittent and weather-driven technologies, they are the wrong type of generation needed to address the reliability issue. AI data centers need reliable power 24/7, as do households and businesses.

Data centers are expected to add anywhere from 35 gigawatts to 108 gigawatts in load growth to the grid by the end of the decade. The energy department sees peak hour energy supply demand increasing by at least 100 gigawatts by 2030, 50 of which can be directly attributed to data centers.

According to the agency, if the current plan continues, blackouts across the country would increase by 100 times. Further, new reliable capacity must come online as the department found that even if there are no retirements over the next five years, outage risks in several regions would still increase more than thirtyfold. According to the DOE report, it would be impossible for the nation’s bulk power system to meet the AI growth requirements while maintaining a reliable power grid and keeping energy costs low for Americans.

According to the DOE analysis, the hardest hit would be eastern states served by the PJM Interconnection grid. The agency sees weeks of power shortages in Maryland, Pennsylvania, and Virginia by 2030, resulting from power plant closures and data center expansion. Under the most severe weather conditions, based on history, power shortages in the area could total more than a month over the course of a year.

Grid operators in power markets such as PJM and the Southwest Power Pool agree that reliability is a major issue if the current rate of fossil plant retirements continues. Coal-fired plants, which supplied half of U.S. electricity just two decades ago, have seen their share decline to 15 percent, trailing natural gas plants and nuclear reactors, and about equal to wind and solar power’s share. According to Lanny Nickell, CEO of the Southwest Power Pool, peak demand is expected to be as much as 75%higher in 10 years, largely driven by electrification and data center growth.

Conclusion

According to the DOE, the massive deployment of wind and solar energy expected over the next five years will not be enough to support the growing power demand brought on by AI data centers and increased electrification that the Biden administration has pushed.

While the U.S. electric grid is expected to see more than 200 gigawatts of new power generation by the start of the next decade, planned retirements of firm generation, such as coal, natural gas, and nuclear, will continue to threaten reliability.

The DOE estimates that 104 gigawatts of firm plant retirements are scheduled over the next five years. If this and the current pace of new additions of firm generation remain unchanged, the agency believes blackouts could increase across the country by 100-fold.

The DOE report justifies President Trump’s belief that electricity demand growth from AI and increased electrification puts the U.S. electric grid in jeopardy of blackouts, which creates the need for his national emergency declaration to ward off the threat by increasing firm power on the grid.

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