This new study
was commissioned by The American Clean Power Association, American Petroleum
Institute, Alliance to Save Energy, Clean Energy Buyers Association, Nuclear
Energy Institute, the U.S. Chamber of Commerce, and the National Electrical
Manufacturers Association.
It forecasts staggering
demand growth for power over the next few decades and bucks a trend of nearly
two decades of stagnant demand growth in the power sector. The near-term demand
growth forecasts to 2040 are driven by manufacturing and data centers. The
longer-term demand growth is driven by the electrification of heating and
transportation. Economic growth and population growth also factor in. Some of
the key highlights are given below:
▪ The next five years pose a major risk of supply and
demand imbalance, as datacenter buildout is expected to go through major
development, while near-term supply response is constrained. Load flexibility
and co-location stand out as the few options to help meet rising demand in the
short-term
▪ The supply pathways involve renewables providing
the bulk of energy volume, while natural gas-fired capacity and other firm
resources like batteries will be critical to provide capacity and balancing
support
o By 2040, the US will require net additions of
between 60 and 100 GW of gas, and over 900 GW of renewables and batteries,
while continuing to support energy efficiency savings remain essential to
maintain reliability
o All current generation technologies face differing
challenges in deployment, and load profiles across the grid are diverse,
therefore, a diversified portfolio of generation technologies will be needed to
ensure planning reserve margins are met and grid reliability is maintained.
o Additionally, there is a role for clean firm
technologies not currently deployed at scale (advanced nuclear and geothermal),
especially if carbon emission mitigation is prioritized
▪ Significant challenges remain to quickly bring
online large amounts of generation, as the supply response is constrained by
outdated interconnection processes, local opposition, siting/permitting delays,
ongoing challenges in developing economic transmission projects, supply chain
constraints, and other limitations to deploying energy delivery infrastructure
o Thoughtful policy reforms and a diversified supply
response portfolio will be needed to reduce the demand/supply tension
The report predicts that
power demand over the next decade will see unprecedented growth with nameplate
capacity of all energy sources combined expected to double over the next 15
years. Renewables and natural gas will provide the bulk of those needs.
Planning reserve margins by
market are shown below and it can clearly be seen that PJM and ERCOT will need
more natural gas power in the near-term even with long waits for gas turbines
in order to ensure reserve margins. It is unclear how this problem
will be resolved; however, it is likely that gas turbine wait times will be
reduced in a couple of years at most.
Thus, we can conclude that
between now and the early 2030s many new natural gas-fired power plants will be
built. That also means new pipelines to deliver that gas to them will be built.
The difficulty in meeting near-term demand means that coal-fired plant
retirements will be delayed. The need for renewables, batteries, and more
transmission will remain robust. Market reform issues are currently slowing
down many of these projects. Public opposition to utility-scale renewables and
fossil fuel pipelines likely will also slow buildouts. Permit reforms are still
sorely needed. These will likely be introduced and approved by the current
GOP-controlled Congress, probably with bipartisan support. The study recommends
the following interconnection queue and grid reforms.
References:
U.S.
National Power Demand Study: Executive Summary. S&P Global Commodity
Insights. March 2025. US_National_Power_Demand_Study_2025_ExecSummary.pdf
No comments:
Post a Comment