Electricity demand is growing rapidly, and the power grid is struggling to keep pace — raising big questions about years of energy and climate planning. Microsoft, Google, Amazon and America’s other tech giants — today’s darlings of Wall Street — are building enormous data centers for cloud computing and artificial intelligence. An industrial revival is taking shape across the Midwest and South, and millions of new electric cars are expected to hook into the power grid by 2035. On its face, those are big, positive developments for the U.S. economy. But the extraordinary projections for new energy demand are on a collision course with a climate policy that would force most of the nation’s older, dirtier coal plants offline by 2039 and tighten up emissions for new natural gas burners. Energy analysts, grid operators and regulators on the frontlines are increasingly sounding an alarm. Those concerns were thrust to the forefront this week amid forecasts of larger-than-expected projections for energy demand, alongside the Supreme Court’s decision to keep a new Environmental Protection Agency power plant rule in place as litigation continues, writes Benjamin Storrow. All of this plays out roughly two weeks out from a presidential election that could send energy policy careening in yet another direction. And the demand surge comes as utilities in the Southeast continue to clean up after Hurricanes Helene and Milton. Power surge
The International Energy Agency has upped its forecast for global electricity demand in 2035 by 6 percent over last year’s estimate. Meanwhile, a Wood Mackenzie report predicts parts of the U.S. could see power demand increase 15 percent by the end of the decade. “We have to get more generation on the grid to address what we know is a material and significant increase in the forecasting we’ve seen,” the nation’s top energy regulator, Willie Phillips, told reporters. “We have to take serious our obligation and responsibility to ensure reliability and resilience of our bulk power system,” said Phillips, who chairs the Federal Energy Regulatory Commission. The trend reverses decades of largely flat demand growth. But the operator of the 13-state power grid that stretches from Chicago to the Mid-Atlantic region has warned that coal and gas retirements are outpacing the development of wind, solar, battery, advanced nuclear and other carbon-free energy sources. “If the EPA rules get implemented as proposed, that will be yet another constraint on the system that makes it more difficult and expensive to meet the demand growth,” Chris Seiple, Wood Mackenzie vice chair of energy transition, power and renewables, told Ben. But proponents of the power plant rule say it is critical to achieving U.S. climate targets. They argue the rule provides enough flexibility for power companies to overhaul their systems without endangering reliability.
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