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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--The competition between load growth and supply chain issues that hinder growth of generation sources and transmission lines has put the U.S. and the world in a challenging position.
Regarding solutions, the questions abound. Can renewables meet demand growth needs? Where does nuclear fit? What about load management? Should data centers be required to supply their own behind-the-meter power?
The assembled panel offered significantly varying perspectives on most of these questions during the "Infrastructure, Reliability and Resilience in Electricity Markets" session at the Ninth Annual Energy Summit in Houston, co-hosted by Baker Botts LLC and the Center for Energy Studies at Rice University's Baker Institute.
With the seminar located in Houston, the panel focused largely on issues regarding the Electric Reliability Council of Texas (ERCOT), which is a major player. They also discussed the PJM Interconnection, which serves several states in the U.S. East and Midwest regions.
Investment Challenges
Panel moderator Michael Yuffee, a Baker Botts partner and head of the firm's energy regulatory practice, began by asking about the top impediments to getting investment needed to meet expected growth. Panelists began by defining what that growth might be.
Here's where the varying opinions began. Calpine CEO Thad Hill, with long experience in wholesale power, pointed out that, while ERCOT's total load was up 4% in 2024, its peak load instances were unchanged due to "price responsive load." He also cited a Duke Energy (Charlotte, North Carolina) survey showing that the U.S. grid's average load is 550 gigawatts (GW), and that 100 GW could be added without needing new generation, if that additional load was willing to curtail 45 hours per year.
Even so, he later agreed with other panelists that some additional power is needed, while stressing, "It's not the only answer."
Deeper into the discussion, the panelists agreed that bitcoin mining and some other types of demand become unprofitable when peak loads push up wholesale power costs. As a result, much of that shuts down, releasing its power to other users.
Dave Berry, co-founder and CEO of Cloverleaf Infrastructure (Houston, Texas), added that he believes some of the growth curve projections are overstated. Cloverleaf develops clean-powered sites for large electric loads. Berry agreed that getting more out of the existing infrastructure will be necessary, as well as cost-efficient.
Still, he contended: "The growth itself is real. We know that on the order of $700 billion of capital expenditures are going to data center growth in the country."
One major challenge is that "it is too hard to build infrastructure. And whether it's local permitting, state permitting, an interconnection queue, oscillating federal policy, the failure of Congress to enact permitting reform for forever, nearly forever, it is just too hard to build things."
The third panelist, Peter Hartley, PhD, who is George A. Peterkin Professor of Economics, Rice University and Rice Faculty Scholar, Electricity Program Lead, Center for Energy Studies, Baker Institute, sees data center load as 24/7 while wind and solar are not--and dispatchable load has been retired in ERCOT in recent years, and new load has minimally kept up.
Infrastructure is also strained by wind and solar, he pointed out, which must locate in distant rural areas, while coal and gas-fired plants can be built closer to demand in population centers. Transmission capacity must be available to carry that load.
Non-dispatchable load
Non-dispatchable (NDL) is defined as that which can be ramped up or down as needs change. Much of the new generation capacity, the panelists noted, has been in NDLs, mainly wind and solar, which are at the mercy of the weather and hour of the day. Capacity that cannot be adjusted as needed creates grid management issues for all, not just ERCOT, they said.
For regional RTOs (regional transmission organizations) like PJM, decisions are harder than in ERCOT because multiple states are involved, Berry said.
In Texas, ERCOT has set aside funding for additional construction, which speeds the process. But PJM, he noted, has a five-year backlog of projects because multiple states must make a series of decisions on funding, permitting, and more.
This article is third in a series on the Rice Baker Institute Energy Summit. The next installment will examine the pros and cons of behind-the-meter power, how Texas House Bill 6 could be the regulatory wave of the future, and how to pay for all this.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Regarding solutions, the questions abound. Can renewables meet demand growth needs? Where does nuclear fit? What about load management? Should data centers be required to supply their own behind-the-meter power?
The assembled panel offered significantly varying perspectives on most of these questions during the "Infrastructure, Reliability and Resilience in Electricity Markets" session at the Ninth Annual Energy Summit in Houston, co-hosted by Baker Botts LLC and the Center for Energy Studies at Rice University's Baker Institute.
With the seminar located in Houston, the panel focused largely on issues regarding the Electric Reliability Council of Texas (ERCOT), which is a major player. They also discussed the PJM Interconnection, which serves several states in the U.S. East and Midwest regions.
Investment Challenges
Panel moderator Michael Yuffee, a Baker Botts partner and head of the firm's energy regulatory practice, began by asking about the top impediments to getting investment needed to meet expected growth. Panelists began by defining what that growth might be.
Here's where the varying opinions began. Calpine CEO Thad Hill, with long experience in wholesale power, pointed out that, while ERCOT's total load was up 4% in 2024, its peak load instances were unchanged due to "price responsive load." He also cited a Duke Energy (Charlotte, North Carolina) survey showing that the U.S. grid's average load is 550 gigawatts (GW), and that 100 GW could be added without needing new generation, if that additional load was willing to curtail 45 hours per year.
Even so, he later agreed with other panelists that some additional power is needed, while stressing, "It's not the only answer."
Deeper into the discussion, the panelists agreed that bitcoin mining and some other types of demand become unprofitable when peak loads push up wholesale power costs. As a result, much of that shuts down, releasing its power to other users.
Dave Berry, co-founder and CEO of Cloverleaf Infrastructure (Houston, Texas), added that he believes some of the growth curve projections are overstated. Cloverleaf develops clean-powered sites for large electric loads. Berry agreed that getting more out of the existing infrastructure will be necessary, as well as cost-efficient.
Still, he contended: "The growth itself is real. We know that on the order of $700 billion of capital expenditures are going to data center growth in the country."
One major challenge is that "it is too hard to build infrastructure. And whether it's local permitting, state permitting, an interconnection queue, oscillating federal policy, the failure of Congress to enact permitting reform for forever, nearly forever, it is just too hard to build things."
The third panelist, Peter Hartley, PhD, who is George A. Peterkin Professor of Economics, Rice University and Rice Faculty Scholar, Electricity Program Lead, Center for Energy Studies, Baker Institute, sees data center load as 24/7 while wind and solar are not--and dispatchable load has been retired in ERCOT in recent years, and new load has minimally kept up.
Infrastructure is also strained by wind and solar, he pointed out, which must locate in distant rural areas, while coal and gas-fired plants can be built closer to demand in population centers. Transmission capacity must be available to carry that load.
Non-dispatchable load
Non-dispatchable (NDL) is defined as that which can be ramped up or down as needs change. Much of the new generation capacity, the panelists noted, has been in NDLs, mainly wind and solar, which are at the mercy of the weather and hour of the day. Capacity that cannot be adjusted as needed creates grid management issues for all, not just ERCOT, they said.
For regional RTOs (regional transmission organizations) like PJM, decisions are harder than in ERCOT because multiple states are involved, Berry said.
In Texas, ERCOT has set aside funding for additional construction, which speeds the process. But PJM, he noted, has a five-year backlog of projects because multiple states must make a series of decisions on funding, permitting, and more.
This article is third in a series on the Rice Baker Institute Energy Summit. The next installment will examine the pros and cons of behind-the-meter power, how Texas House Bill 6 could be the regulatory wave of the future, and how to pay for all this.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
