The electrical industry is able to meet growing demand while maintaining affordability and reliability

Posted on June 21, 2024 by Liz Carey

Credit: Georgia Power

Energy suppliers expect unprecedented growth in demand over the next decade, and managing this demand while providing affordable and reliable electricity during the transition to a clean energy economy presents opportunities for power companies, executives said.

Navigating this growth requires working hand-in-hand with local, state and federal governments and integrating a variety of resources into the supply mix, electric industry executives said during a roundtable discussion at from the annual meeting of the Edison Electric Institute in Las Vegas earlier this week.

Evan Pittman, managing director of research and innovation at Energy Impact Partners, noted that a survey his firm conducted of global energy leaders found that executives expect staggering growth over the of the coming decade.

“We gathered around 400 global energy executives and interviewed them. Sixty percent of them said they projected annual growth over the next decade of 2 to 4 percent. Almost all of the remaining 40 percent reported annual growth above 4 percent, which would essentially take us into uncharted territory for the industry,” he said. “We haven’t seen (such growth) since the dawn of electrification. Of course, this all comes at a time when the industry is rapidly evolving its asset offering from traditional fossil assets… We know it will take a blend of new technologies and high-level execution to achieve this while protecting affordability and reliability. .”

Other executives on the panel included Chris Womack, chairman and CEO of Southern Company; Chris Colbert, president and CEO of Elementl Power; Carla Frisch, acting executive director of the U.S. Department of Energy’s Office of Policy; Thomas McAndrew, President and CEO of Enchanted Rock; and Chad Williams, president and CEO of QTS Data Centers.

Womack said meeting this demand for electricity will require an increased commitment to nuclear power. Southern Company’s Georgia Power recently completed construction of the first nuclear power plants in the United States in more than 30 years. With four units now operational, Plant Vogtle is the largest producer of clean energy in the United States and is expected to produce more than 30 million megawatt hours of emissions-free energy each year.

“It was an arduous journey for us, but I think it’s something very important for our business, for our state and also for the country,” he said. “As we talk about growing demand, I think it’s even more important that we do big things and hard things like this to meet that demand. And then we have to make sure we balance all of our obligations in terms of reliability, affordability, safety and cleanliness. I am confident that with the processes we have in place, we can achieve this in the right way.

DOE’s Frisch said the federal government is working with energy providers to ensure policy at the federal level can allow providers to meet growing demand needs.

“We are working on the next industrial policy which would accompany the industrial revolution that we are experiencing,” she declared.

At DOE, there are four priorities, she said: creating a more favorable investment environment for clean energy deployment, ensuring the clean energy economy is equitable and works for all communities, maintain and improve the skilled workforce in the energy sector, and partner with industry on research and development regarding the next generation of energy technologies.

“We’re looking at 15 percent growth over the next 10 years in the U.S. as a whole and in electricity demand,” she said. “It’s coming from data centers, some electrification of transportation and new manufacturing. Fifteen percent seems like a lot, because we’ve been flat for several years. But I think many of you in this room remember that just a few decades ago, in the ’90s, we were consistently achieving 30% growth in electricity demand in the United States.

Regionally, she says, there are large pockets of demand. And as data centers continue to look for locations to set up their facilities, these numbers could change.

“For this year, nationally we’re forecasting 3% demand growth that will actually be met by solar and storage,” she said. “There’s a lot of opportunity now, compared to where we were in the ’90s, in terms of the suite of technologies available and the tools to help those technologies, respond to this acceleration.”

Womack said the demand growth Southern Company is seeing is based on growth in the state and region. But this growth comes with risks. Womack said power companies need to shut down all the chatter to make sure their projections about needs are real.

“There is a cottage industry that is working every day, looking for economic development projects, and they are looking for incentives and who is going to give them the biggest and most significant tax breaks… Whereas the Companies are making decisions about where they’re going to locate…we’ll continue to make sure it’s real before we start saying, “What level of service do you want?” understand marginal cost and then say, “This is what you have to pay.” You need to make sure you go through that funnel to confirm the reality of this process and cut through some of the noise that’s out there. It’s the Wild West out there.

But as demand continues to grow, Womack said, it’s important to ensure the lights stay on through the use of dispatchable energy.

“As we think about making sure we meet the needs of our customers, there needs to be more dispatchable energy in the mix as we move forward,” Womack said. “There’s solar and battery storage all in the mix in this plan, but on this cold, wet morning you need to make sure you have resources available. …We still have commitments, and our goal of net zero emissions and sustainability remains. But to meet customer and network needs, we need to have distributable resources.