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E&E News
19 hours ago
- Business
- E&E News
Storms, AI demand and policy failures are upending US grid
Ensuring the nation's power grids can reliably deliver electricity is clashing with the tech industry's voracious appetite for energy — pushing the risks of power outages to new highs, executives of regional power markets told federal regulators Wednesday. Grid rules developed during periods of relatively slow growth aren't equipped for the demands of Silicon Valley's investment in artificial intelligence, extreme weather shocks, and deep national and state political divisions over energy and climate policy, grid operators told members of the Federal Energy Regulatory Commission. 'AI is going to change our world,' said Manu Asthana, CEO of the PJM Interconnection, grid operator for 67 million customers in all or parts of 13 Eastern states and the District of Columbia. Advertisement 'In our forecast between 2024 and 2030, currently we have a 32-gigawatt increase in demand, of which 30 is from data centers,' Asthana said. 'We need to stabilize market rules and find that intersection between reliability and affordability that works both for consumers and suppliers, and that intersection is getting harder and harder to find.' Lanny Nickell, CEO of the Southwest Power Pool, PJM's counterpart in a band of Great Plains states, said extreme weather threats and the increasing role of weather-dependent wind and solar power put outages at 125 times more likely to happen than eight years ago. 'As if this wasn't challenging enough,' he said, 'we are now projecting our peak demand to be as much as 75 percent higher 10 years from now, and that's largely driven by electrification and data center growth.' Jim Robb, CEO of the North American Electric Reliability Corp., the architect of transmission grid standards, said grid operators need 'much deeper insight' into future electricity supply and demand and the probabilities of extreme storms and heat waves that could push power demand to new peaks. Limited real-time information about the effect that dangerous storms have on gas pipeline deliveries to electric turbines is also an area of concern that has been left unresolved by the broader energy industry. Current industry risk analysis cannot do the job, Robb said in comments filed for a two-day conference at FERC's Washington headquarters. 'This will require stronger modeling of fuel and capacity performance to assess reliability risk,' Robb said. The industry needs to establish an agreed-upon profile of the likely risks operators face, like the 'design basis' accident scenarios that nuclear power plant operators are required to defend against. Susan Bruce, counsel to a group of industrial power customers, said her coalition shares 'serious concerns' about regional grid reliability and the ability to add enough new electric generation to keep pace with demand, particularly from 'unprecedented but undefined' growth of data center and cryptocurrency mining operations. 'There is a lack of trust that even very high prices' in grid markets 'can move the needle' to get new nonrenewable generation in service, she said in remarks filed with the commission. 'New rules of the road are necessary,' she said. 'States leaning on other states' Sharp divisions at national and state levels over climate policies is apparent inside PJM, said FERC Chair Mark Christie. Christie told PJM's Asthana, 'You've got 13 states plus the District, you've got widely divergent policies from New Jersey to West Virginia, from Indiana to Maryland. 'It puts you in an impossible position,' Christie continued. 'How can you guys balance these incredibly divergent political goals and try to run a market … that fits the economic textbooks?' One answer, broached by Christie and several state regulators at the conference, was to push more responsibility on states to meet grid reliability challenges. Panelists at the FERC conference debated whether electricity reliability and affordability would be helped if states ordered utilities to purchase part of the generation they expect to need in the future, rather than relying on PJM's competitive energy markets to deliver supply. 'How do we make it work without the states having a much larger role?' Christie asked. 'We acknowledge that the states need a role because we are responsible for resource adequacy,' said Jacob Finkel, deputy secretary for policy for Pennsylvania Gov. Josh Shapiro (D), who has led a challenge to PJM policies by Democratic governors in its region. 'We have a responsibility to our ratepayers for affordability.' 'It's easy to throw darts at PJM,' said Kelsey Bagot, a member of the Virginia State Corp. Commission. 'To the extent we want a larger role in the process, we have to demonstrate that as a group of states with very different regulatory structures and very different goals and policies, that we can actually function as a collaborative body and make decisions. 'I think that challenge has been handed to us,' Bagot said. Dennis Deters, a member of the Public Utilities Commission of Ohio, sided with Bagot, a fellow red-state regulator. 'We are reactive,' he said. 'Too many states are relying on [PJM] to provide resource adequacy. 'I do shudder to think of injecting more politics into an engineering effort,' he added. Michael Richard, a member of the Maryland Public Service Commission, said the divisions were over principle rather than politics. 'You know, Maryland policymakers, we believe the science on climate change.' Christie several times pressed panelists for opinions on whether states should be held accountable if their utilities aren't building enough generation to meet reliability needs, which, in his calculation, means generation that can operate around the clock, not renewables. 'If you don't build enough, maybe you need to pay a penalty. Clearly, there are states leaning on other states,' he said. 'The states have the ability to do a lot of direct contracting and direct support for their policies,' PJM's Asthana said. 'We have seen the state of New Jersey, for example, directly support offshore wind. We have supported them in that pursuit, and that can work.' Gordon van Welie, president of ISO New England, said that states can lose control. 'We know from experience that it's very hard building fossil resources in New England,' he said. A key part of the region's answer was investment in offshore wind. Now the Trump administration has thrown up barriers to that option, he added. 'So that puts us in a very difficult place as we enter 2030,' he said. 'Something's got to give in that equation. Otherwise we have trouble.'
Bloomberg
2 days ago
- Business
- Bloomberg
Data Centers Added $9.4 Billion in Costs on Biggest US Grid
By and Mark Chediak Save The rapid development of data centers connected to the largest US electric grid raised costs by $9.4 billion, a 180% increase, according to a report published by a market observer. The growing energy needs of data centers was the primary cause of tight supply-and-demand conditions, as well as high prices, in the PJM Interconnection capacity market, which serves customers from Illinois to Washington D.C, said the grid's independent market monitor.
Yahoo
3 days ago
- Business
- Yahoo
The war on woke…energy?
An electrical substation near Imboden, Va. (Sarah Vogelsong/Virginia Mercury) I've been thinking a lot about language lately, and the strange way words that used to mean good things are now attacked as bad, and vice-versa. Diversity, equity and inclusion are radioactive. Mentioning environmental justice or climate change will get your federal program canceled. Coal is clean, even beautiful, and pointing out the connection to global warming makes you an alarmist, because speaking up when your government steers you towards disaster is now a bad thing to do. Recently I received an email excoriating 'woke' energy policy, which seemed especially curious. I can see how awareness of historic racial injustice against Black people might nudge policy makers into greater support for renewable energy, given that pollution from fossil fuels tends to have a disparate impact on communities of color. But judging from the hostile tone of the email, I believe we may have different understandings of wokeness. Sometimes, though, words mean different things to different people without anyone realizing they aren't using the same definition. That may be the case when Virginia leaders talk about the reliability of the electricity supply. Everyone agrees reliability is critical – but they may not be talking about the same thing. We suspected data centers were creating an energy crisis for Virginia. Now it's official. Virginia's need for power is growing at a terrific pace. Data centers consume so much electricity that our utilities can't keep up, causing them to increase imports from out of state. That's okay for now; West Virginia is not a hostile foreign nation. Also, Virginia is a member of a larger grid, the 13-state (plus D.C.) PJM Interconnection, which manages thousands of generating facilities to ensure output matches demand across the region. But even across this wider area, demand is increasing faster than supply, pushing up prices and threatening a shortfall. Unless we tell data centers to go elsewhere, we need more generation, and fast. Democrats and Republicans are divided over how to increase the power supply. Democrats remain committed to the Virginia Clean Economy Act, which requires Virginia's electricity to decarbonize by 2050. Meeting the VCEA's milestones requires investments in renewable energy and storage, both to address climate change and to save ratepayers from the high costs of coal and fracked gas. Gov. Glenn Youngkin and members of his party counter that fossil fuels are tried-and-true, baseload sources of energy. They advocate abandoning the VCEA and building more gas plants, arguing that renewable energy just isn't reliable. Note that these Republicans are not alarmists, so they ignore climate change. If they were the proverbial frog in a pot of water on the stove, they would consider it a point of pride that they boiled to death without acknowledging the reason. Youngkin takes every chance he gets to slam the VCEA. As I've previously described, the governor sought to amend various energy-related legislation to become VCEA repeal bills, regardless of the original subject matter or how much good it could do. With vetoes and destructive amendments, Youngkin acts to deepen Virginia's energy woes Last month, Youngkin's Director of the Department of Energy sent a report on performance-based utility regulation to the State Corporation Commission. With it was a cover letter that had nothing to say about performance-based regulation, but a lot to say about the big, bad VCEA. The letter insists that 'By all models, VCEA is unable to meet Virginia's growing energy demand' and urges the SCC to 'prioritize ratepayer affordability and grid reliability over long-term VCEA compliance.' Unfortunately for the Youngkin administration, affordability hasn't been an argument in favor of fossil fuels for many years now. A new solar farm generates a megawatt of electricity more cheaply than a new fossil gas plant, and that will still be true even if Congress revokes renewable energy subsidies – though doing so will make electricity less affordable. The argument from fossil fuel defenders then becomes that the cheapest megawatt is not a reliable megawatt. And that's where meaning matters. Reliability is so important that even the decarbonization mandate of the VCEA contains an important exception: a utility can build fossil fuel generation under certain circumstances, if it is the only way to keep the lights on. Dominion Energy is relying on this escape clause as it seeks regulatory approval to build new fossil gas combustion turbines on the site of an old coal plant in Chesterfield. The move is opposed by local residents, environmental justice advocates and climate activists. (No word on whether they are alarmists or simply alarmed.) They argue Dominion hasn't met the conditions set out in the VCEA to trigger the escape clause, including achieving energy efficiency targets and proving it can't meet its needs with renewable energy, energy storage and demand response programs. Virginia Republicans not only side with Dominion on this, they increasingly favor building gas plants over renewables as a general matter, urging the reliability point. It's an argument that never made much sense for me, given that renewables make up only 5% of PJM's electricity. That's way less than the national average of over 21%, and other grids aren't crashing right and left. The light bulb went off for me while I was watching the May meeting of the Commission on Electric Utility Regulation. A PJM representative showed a chart of how the grid operator assigns numbers to different resources according to how they contribute to the electricity supply. Nuclear plants get the highest score because they run constantly, intermittent wind and solar sources get lower scores, with fossil fuel plants in the middle. PJM calls that a reliability score. For some Republicans, that's a slam-dunk: the chart proves renewable energy is unreliable. But in spite of its label, the chart doesn't actually measure reliability; it gives points for availability, which is not the same thing. As I once heard a solar installer testify, few things are as reliable as the sun rising every morning (or rather, the earth rotating). With modern weather forecasting, grid operators can predict with great precision how much electricity from solar they can count on at any given time from solar facilities arrayed across the region. Solar energy is highly reliable, even though it is not always available. Add storage, and the availability issue is also resolved. Obviously, the grid would not be reliable if solar were the only resource operators had to work with. But it isn't. PJM calls on a mix of different sources, plus storage facilities and demand response, to ensure generation precisely matches the peaks and valleys of demand. Reliability is a matter of keeping resources in sync and ensuring a robust transmission and distribution system. The threat to reliability today comes from the mad rush to connect new data centers. PJM has been roundly criticized for not approving new generating and storage facilities' connection to the grid at a fast enough pace to keep up with the increase in demand and retirements of old, money-losing fossil fuel plants. Scrambling to recover, recently it decided to prioritize a smaller number of big, new gas plants over the thousands of megawatts of renewable energy and storage still languishing on its waiting list. Meanwhile, PJM wants utilities to keep operating coal plants even though it will make electricity less affordable and violate state climate laws. In this it is joined by the Trump administration, which wants to require utilities to keep running coal plants explicitly to support the coal industry. Analysts say this is the wrong way to achieve reliability. A recent report from the consulting firm Synapse estimates that PJM's approach will raise residential electricity bills by 60% by 2036-2040. By contrast, reforming its interconnection process and enabling more renewable energy and storage to come online would lower bills by 7%. By Synapse's calculation, Virginia would see the most savings of any state. In other words, Virginia Republicans are pursuing reliability the wrong way. Instead of pressuring Democrats to back away from the VCEA, they ought to be pressuring PJM to reform its approach. Reliable power doesn't have to be expensive, if you take the politics out of it. 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Globe and Mail
3 days ago
- Business
- Globe and Mail
To prevent blackouts, Trump administration keeps another aging power plant online through summer
HARRISBURG, Pa. (AP) — The U.S. Department of Energy has ordered another power plant, this time an oil and gas plant in Pennsylvania, to keep its turbines running through the hottest summer months as a precaution against electricity shortfalls in the 13-state mid-Atlantic grid. The department's order to the grid operator, PJM Interconnection, regarding the Eddystone power plant just south of Philadelphia on the Delaware River, is the department's second use of federal power under President Donald Trump to require a power plant to keep operating on the mainland United States. Constellation Energy had planned to shut down Eddystone's units 3 and 4 on Saturday, but Trump's Department of Energy ordered the company to continue operating the units until at least Aug. 28. The units can produce a combined 760 megawatts. The department, in its order, cited PJM's growing concerns about power shortfalls amid the shutdown of aging power plants and rising electricity demand. PJM has projected significant growth in electricity use to power America's fast-rising demand for artificial intelligence and cloud computing platforms. Demand for electricity has spiked for the first time in decades. In addition to artificial intelligence, crypto mining, the broader electrification of society and bipartisan political pressure to bring manufacturing back to the U.S. are fueling new electricity demand. PJM last year approved Constellation's request to shut down the units, but it welcomed the department's order to keep them operating, saying it's a 'prudent, term-limited step' that allows PJM, the department and Constellation to study the longer-term need and viability of Eddystone's units. In a statement Monday, Constellation said it is 'pleased' to work with the department and PJM and is taking emergency measures to meet the need for power 'at this critical time when America must win the AI race.' It also said it is trying to accelerate its restart of Three Mile Island 's Unit 1 to bring it online in 2027, instead of in 2028, as part of a deal to supply data centers run by tech giant Microsoft with carbon-free energy. PJM, based in Pennsylvania, earlier this year won federal approval to fast-track the construction of new power plants that critics said would favor natural gas plants over clean energy projects that don't emit planet-warming greenhouse gases. PJM has said a power shortage could affect the grid as early as 2026 as demand grows for electricity at the same time that aging coal-fired plants and nuclear plants are retiring. Clean energy advocates blame PJM for creating the existing reliability problem by taking an unduly long time to study proposed wind and solar energy projects in its project queue. Proposals awaiting PJM's approval are more than 97% solar, wind or battery storage, according to federal figures. Less than 3% are natural gas. The department took a similar step last week, ordering Consumers Energy to keep the J.H. Campbell coal-fired power plant open in Michigan past its Saturday retirement. The grid operator there, the Midcontinent Independent System Operator, said the order was unnecessary, that there was no energy emergency there and that there should be enough energy in the region through the summer. An environmental advocacy group, the Delaware Riverkeeper Network, criticized the move to keep Eddystone operating as an "environmental injustice." Shutting down the units would reduce hazardous pollution and carbon emissions from the decades-old facility and help the region meet federal clean air standards for smog, it said. ___
Fast Company
3 days ago
- Business
- Fast Company
Trump administration orders Pennsylvania power plant to run through the summer
The U.S. Department of Energy has ordered another power plant, this time an oil and gas plant in Pennsylvania, to keep its turbines running through the hottest summer months as a precaution against electricity shortfalls in the 13-state mid-Atlantic grid. The department's order to the grid operator, PJM Interconnection, regarding the Eddystone power plant just south of Philadelphia on the Delaware River, is the department's second use of federal power under President Donald Trump to require a power plant to keep operating on the mainland United States. Constellation Energy had planned to shut down Eddystone's units 3 and 4 on Saturday, but Trump's Department of Energy ordered the company to continue operating the units until at least Aug. 28. The units can produce a combined 760 megawatts. The department, in its order, cited PJM's growing concerns about power shortfalls amid the shutdown of aging power plants and rising electricity demand. PJM last year approved Constellation's request to shut down the units, but it welcomed the department's order to keep them operating, saying it's a 'prudent, term-limited step' that allows PJM, the department and Constellation to study the longer-term need and viability of Eddystone's units. The department took a similar step last week, ordering Consumers Energy to keep the J.H. Campbell coal-fired power plant open in Michigan past its Saturday retirement. The grid operator there, the Midcontinent Independent System Operator, said the order was unnecessary, that there was no energy emergency there and that there should be enough energy in the region through the summer. An environmental advocacy group, the Delaware Riverkeeper Network, criticized the move to keep Eddystone operating as an 'environmental injustice.' Shutting down the units would reduce hazardous pollution and carbon emissions from the decades-old facility and help the region meet federal clean air standards for smog, it said.
