By Conor Bernstein
Facing surging power demand, AEP — which serves 5 million customers in parts of 11 states — announced it’s likely to sue the U.S. Environmental Protection (EPA) over its blitz of rules targeting coal and natural gas generation. “You never like to have to sue, but we’re going to do what we have to do to defend our grid and our customers that use that grid,” Ben Fowke, American Electric Power (AEP) interim president, CEO and director, said during a recent earnings call. Like so many other utilities across the country, AEP simply doesn’t see a viable path forward to maintaining grid reliability while meeting incredible load growth without the very power plants EPA is determined to force off the grid.
AEP has reported that companies representing 15 gigawatts of new power demand — mainly from data centers — are seeking new service from the utility by 2030. That amount of new demand is equivalent to the addition of 15 new nuclear power plants serving more than 10 million households. Astoundingly, AEP said “many, many” more gigawatts of demand are possible from hundreds of inquiries from potential customers.
Electricity demand isn’t just rising quickly, it’s exploding across the country. In some regions it’s battery manufacturing or semiconductor production driving demand, but the explosive growth of data centers to service cloud computing and AI is seemingly upending demand projections nearly everywhere.
Not only are there more and more data centers planned but they’re getting far bigger with enormous power needs. New hyperscale data companies are building data center campuses that can support a full gigawatt or more of power demand. “Data centers are going to be very different,” said Ali Fenn, president of data center developer Lancium, at the recent Data Center World conference. “All of the requirements I’ve been discussing are 1 gigawatt and 2 gigawatts. The sheer size of what we’re talking about is unprecedented, with a much bigger physical footprint,” he said.
Dominion Power, the utility for much of Virginia, which is the gateway for 70% of the world’s Internet traffic, expects power demand in its service territory to jump 85% in the next 15 years.
The Electric Reliability Council of Texas (ERCOT), the grid operator for most of the state, now estimates its peak summertime power demand in 2030 to hit 160,000 megawatts (MW), an unprecedented 40,000 MW higher than the expectation just a year ago.
Meeting surging demand would be challenge enough but doing so while EPA dismantles the coal fleet by 2032, and has now effectively banned new baseload coal and natural gas generating capacity, seems an all but impossible hill to climb.
“When we create arbitrary timelines and arbitrary percentages that are useful slogans but are not connected to the operational realities of the system, that’s when I get really concerned about system reliability,” said Todd Snitchler, chief executive of the Electric Power Supply Association.
And yet, that’s exactly what has happened. Despite countless warnings, EPA has taken arbitrary timelines and slogans and now made them the nation’s de facto energy policy, completely ignoring the operational realities of the grid and a tsunami of new power demand.
Conor Bernstein is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.
