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Released December 19, 2024 | SUGAR LAND
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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--It's true that U.S. renewable energy capacity is growing and is online for more growth. But IIR Energy President Paul Copello and Brock Ramey, Industrial Info's North American power specialist, point out that energy demand growth from population expansion and the explosion of power-hungry data centers is assuring strong demand for all types of energy, including fossil fuels of all types, for the foreseeable future.
Old King Coal
Closures of coal-fired electricity generation plants were once a high priority due to the fact that coal emits more greenhouse gases than any other fuel. But Ramey noted that the rising demands for reliable grid power is slowing that trend. "Back in October, for example," he said, "Duke Energy announced it was delaying closure of its Gibson Power Plant in Indiana, due to continued power demands."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for the Gibson Generating Station plant profile.
On a larger scale, Copello cited coal industry insiders as saying sales of coal-hauling rail cars have significantly increased in recent months due to investor confidence in the continued need for coal as a baseline fuel.
Empowering Data
Bloomberg data recently found that up to 17% of U.S. power demand could go to data centers by 2030. In an October Power Magazine interview, Tim Echols, a commissioner and vice-chair of the Georgia Public Service Commission, said, "Coal plants will have an extension of their life due to data-center demand."
Georgia is actively recruiting data centers, and has added two nuclear reactors to Plant Vogtle over the last two years, adding about 2,200 megawatts (MW) of generation capacity from that source. Echols added, "There could be a massive increase of capacity approved next year. Data centers will account for most of it."
Virginia is another of the many states experiencing huge power demand growth from data centers, said Ramey. He cited an October flyer from the Northern Virginia Electric Cooperative (NOVEC) (Manassas, Virginia) showing that data center power demands have grown from a negligible level in 2011 to accounting for approximately half the cooperative's summer peak load of 2,076 MW in 2024.
NOVEC is under the auspices of PJM, which covers 13 states and is the nation's largest electricity market. The U.S. Energy Information Administration (EIA) reports that in 2023, 14% of PJM's power came from coal, using only 34% of the available coal-fired capacity. Earlier this year, the EIA reported that PJM was planning to retire 20% of its current capacity by 2028.
Givin' It the Gas
Industrial Info's Ramey pointed out that natural gas development has been in high gear for several years, and its future burns even brighter. "Another spending splurge is coming up, with over 37 GW (gigawatts) of natural gas generation proposed between 2025 and 2027. Most of that will be in the Southwest, especially Texas."
Texas, whose Permian Basin is among the top U.S. producers of both oil and natural gas, is under the gun for more power generation. Ramey pointed out that the Texas Public Utilities Commission (PUC) in 2023 announced the Texas Energy Fund, whose purpose is to provide up to $10 billion in loans to build new or upgrade existing natural gas-fired facilities.
Natural gas-fired generation is expanding across the U.S. Ramey said that wind and solar's intermittency can never completely replace the baseline stability of natural gas-fired generation, "especially when we are discussing the mammoth power demand coming from data centers. They require a 24/7 reliable energy source and natural gas-fired generation meets that need."
Another example is in Louisiana, where in November, "Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) proposed over 2 GW of natural gas-fired generation to be built in Louisiana to help support a metadata center being proposed in Rayville, Louisiana, consisting of multiple phases."
For more information on the Rayville data center campus, see December 6, 2024, article - Meta to Build Large AI Data Center in Northeast Louisiana.
EV Irony
Electric vehicles (EVs) are also straining the grid. In May, the EIA reported, "Estimated annual electricity consumption by EVs grew to 7,596 GWh (gigawatt hours) in 2023, almost five times the consumption in 2018. The shares of electricity consumed by battery electric vehicles (BEVs) and by plug-in hybrid electric vehicles were about the same in 2018."
And manufacturing of EV and green power components is also in the mix for natural gas power, Ramey says. EV batteries, hydrogen production, chip manufacturing and others are on that list.
More Better
Berkshire Hathaway Chief Executive Officer Warren Buffet has weighed in, warning shareholders in 2024 that he has an ominous outlook for the power grid's future. Even in energy supply areas such as the Permian Basin, power supplies are not keeping pace with increased demands for artificial lift for oil and compression and processing for natural gas. There, an increasing number of producers are tapping into their own natural gas to generate electricity onsite, bypassing the overloaded grid altogether.
Said IIR Energy's Copello, "We're basically going to need to need all hands on deck in energy sources as we move forward. That includes oil, gas and coal for the foreseeable future."
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).
Old King Coal
Closures of coal-fired electricity generation plants were once a high priority due to the fact that coal emits more greenhouse gases than any other fuel. But Ramey noted that the rising demands for reliable grid power is slowing that trend. "Back in October, for example," he said, "Duke Energy announced it was delaying closure of its Gibson Power Plant in Indiana, due to continued power demands."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for the Gibson Generating Station plant profile.
On a larger scale, Copello cited coal industry insiders as saying sales of coal-hauling rail cars have significantly increased in recent months due to investor confidence in the continued need for coal as a baseline fuel.
Empowering Data
Bloomberg data recently found that up to 17% of U.S. power demand could go to data centers by 2030. In an October Power Magazine interview, Tim Echols, a commissioner and vice-chair of the Georgia Public Service Commission, said, "Coal plants will have an extension of their life due to data-center demand."
Georgia is actively recruiting data centers, and has added two nuclear reactors to Plant Vogtle over the last two years, adding about 2,200 megawatts (MW) of generation capacity from that source. Echols added, "There could be a massive increase of capacity approved next year. Data centers will account for most of it."
Virginia is another of the many states experiencing huge power demand growth from data centers, said Ramey. He cited an October flyer from the Northern Virginia Electric Cooperative (NOVEC) (Manassas, Virginia) showing that data center power demands have grown from a negligible level in 2011 to accounting for approximately half the cooperative's summer peak load of 2,076 MW in 2024.
NOVEC is under the auspices of PJM, which covers 13 states and is the nation's largest electricity market. The U.S. Energy Information Administration (EIA) reports that in 2023, 14% of PJM's power came from coal, using only 34% of the available coal-fired capacity. Earlier this year, the EIA reported that PJM was planning to retire 20% of its current capacity by 2028.
Givin' It the Gas
Industrial Info's Ramey pointed out that natural gas development has been in high gear for several years, and its future burns even brighter. "Another spending splurge is coming up, with over 37 GW (gigawatts) of natural gas generation proposed between 2025 and 2027. Most of that will be in the Southwest, especially Texas."
Texas, whose Permian Basin is among the top U.S. producers of both oil and natural gas, is under the gun for more power generation. Ramey pointed out that the Texas Public Utilities Commission (PUC) in 2023 announced the Texas Energy Fund, whose purpose is to provide up to $10 billion in loans to build new or upgrade existing natural gas-fired facilities.
Natural gas-fired generation is expanding across the U.S. Ramey said that wind and solar's intermittency can never completely replace the baseline stability of natural gas-fired generation, "especially when we are discussing the mammoth power demand coming from data centers. They require a 24/7 reliable energy source and natural gas-fired generation meets that need."
Another example is in Louisiana, where in November, "Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) proposed over 2 GW of natural gas-fired generation to be built in Louisiana to help support a metadata center being proposed in Rayville, Louisiana, consisting of multiple phases."
For more information on the Rayville data center campus, see December 6, 2024, article - Meta to Build Large AI Data Center in Northeast Louisiana.
EV Irony
Electric vehicles (EVs) are also straining the grid. In May, the EIA reported, "Estimated annual electricity consumption by EVs grew to 7,596 GWh (gigawatt hours) in 2023, almost five times the consumption in 2018. The shares of electricity consumed by battery electric vehicles (BEVs) and by plug-in hybrid electric vehicles were about the same in 2018."
And manufacturing of EV and green power components is also in the mix for natural gas power, Ramey says. EV batteries, hydrogen production, chip manufacturing and others are on that list.
More Better
Berkshire Hathaway Chief Executive Officer Warren Buffet has weighed in, warning shareholders in 2024 that he has an ominous outlook for the power grid's future. Even in energy supply areas such as the Permian Basin, power supplies are not keeping pace with increased demands for artificial lift for oil and compression and processing for natural gas. There, an increasing number of producers are tapping into their own natural gas to generate electricity onsite, bypassing the overloaded grid altogether.
Said IIR Energy's Copello, "We're basically going to need to need all hands on deck in energy sources as we move forward. That includes oil, gas and coal for the foreseeable future."
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).
