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Why is US energy demand soaring, putting climate goals at risk?

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Why is US energy demand soaring, putting climate goals at risk?

What is happening with American energy?

Demand for electricity is skyrocketing, creating a new energy crisis for the United States – one that could make the climate crisis even worse.

After more than 30 years of declining or stagnant electricity demand, forecasts indicate that the country will need the equivalent of about 34 new nuclear power plants, or 38 gigawatts, over the next five years to power the data centers and manufacturing and electrify buildings and vehicles, according to documents filed with the Federal Energy Regulatory Commission and compiled by Grid Strategies.

Since those filings, several utilities have said they will need even more power.

Georgia Power, which has more than 2.7 million customers, told regulators in 2022 it would need the equivalent of one additional mid-sized power plant for the rest of the decade. But late last year, the company said it would need 17 times more electricity – the equivalent of four new nuclear power plants – because of new data centers and manufacturing.

Nationwide estimates do not necessarily include the growth of cryptocurrency or the hard-to-track but energy-intensive cannabis culture, which would consume up to 2.3% And 1%, respectively, of the country’s electricity. Energy demand in these industries has exploded with the popularity of cryptocurrency and the legalization of marijuana.

What is driving demand?

Data mining is driving demand in Texas, where miners of Bitcoin and other cryptocurrencies have request the equivalent of approximately 41 new nuclear power plants to power their energy-intensive computing processes for generating the cryptocurrency.


The overall growth of data centers, including crypto, is increasing energy demand worldwide. A recent International Energy Agency report says the amount of electricity needed for centers could double by 2026.

In Virginia, Dominion Energy threatened to turn away planned centers, saying they could not meet electricity demand.

In 2023, Dominion said data centers will increase demand 376% by 2038. Even though this growth is moderate, Dominion still expects overall electricity demand to increase 85% over the next few years. next 15 years as consumers shift to electrical appliances, heating and cooling. units and vehicles.

The Tennessee Valley Authority, meanwhile, is another hot spot for data centers, which have generated 65% of load growth since 2019, the public power provider said. TVA has contracts with additional centers not yet built that will increase electricity needs by 40 to 50 percent. The quasi-public utility has proposed or is building eight new natural gas plants to meet demand.

“The time frames in which (data centers) can come online have been aggressive on their part,” said Lori Stenger, TVA’s director of business, forecasting and financial planning.

The growth of new manufacturing industries such as heat pumps and electric vehicles, spurred in part by the climate change mitigation provisions of the Inflation Reduction Act, has boosted plans to build power plants for burn methane, a fossil fuel also known as natural gas, or delay the closure of coal-fired power plants.

“Electric vehicle charging stations, large fleet charging stations, are going to be a pretty big driver. So it’s a whole bunch of things coming together at the same time,” said Rob Gramlich, president of Grid Strategies.

Growth occurs as studies and experts have made clear that global climate goals will only be possible if overall electricity demand is reduced, including from renewable sources. The U.S. goal is to reduce greenhouse gas emissions by about 50% from 2005 levels by 2030, to achieve 100% carbon pollution-free electricity by 2035 .

“We see (gas production) as a huge threat – we’re at a point where we need to phase out fossil fuels and not lock them in for more decades,” said Gudrun Thompson, Southern Environmental’s energy program manager. Law Center.

Why Utilities Are Building On Natural Gas Rather Than Renewables

Utilities say they can’t meet booming growth with wind, solar and other renewable energy, but a large group of companies, including Google and Microsoft, disagree. The Clean Energy Buyers Association (Ceba), which has 400 members, has said fossil fuels do not fit its goals.

Many members now consider, or even prioritize, their ability to access clean energy when looking to establish a foothold and expand, wrote Priya Barua, Ceba’s director of policy and market innovation, in a written testimony on Georgia Power’s request to add more capacity.

Electric utilities, however, view natural gas plants as the most logical and cost-effective choice. In some states, they make more money building multibillion-dollar power plants than they do producing renewable energy.

Natural gas power plants are also the cheapest and quickest to build, especially since the United States has failed to build the transmission lines needed to get wind and solar power where it needs to go. will be used. Clean energy advocates say utilities, states and regions should have better planned for this surge in demand.

“They were warned that they were low, certainly in terms of their forecasts for electric vehicles,” said Tyler Norris, a doctoral student at Duke University who testified that Duke Energy did not forecast a sufficient increase in the energy demand from electric vehicles. “None of us have really faced these scenarios at any point in the last 20 to 30 years on this scale. We are all struggling to understand how real this is and how we are going to make it happen.

Projector is a nonprofit newsroom that investigates the powerful interests blocking climate action

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