Electric industry positions to meet demand growth while maintaining affordability, reliability

Energy providers are expecting unprecedented growth in demand over the next decade, and managing that demand while providing affordable and reliable electricity during the transition to a clean energy economy presents opportunities for electric companies, leaders said.

Navigating that growth requires working hand-in-hand with local, state and federal governments and incorporating a variety of resources into the supply mix, power industry leaders said during a panel discussion at the Edison Electric Institute’s annual meeting in Las Vegas earlier this week.

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

“We gathered 400 or so global energy leaders and polled them. Sixty percent of them said they project over the next decade 2 to 4 percent annual growth. Pretty much all of the remaining 40 percent said higher than 4 percent annual growth, which would take us basically into uncharted territory for the industry,” he said. “We haven’t seen (growth like this) since the dawn of electrification. Of course, this is all coming at a time when the industry is rapidly transitioning its supply mix from legacy-based fossil assets… We know it’s going to take a mix of new technology and top tier execution to navigate that while we protect affordability and reliability.”

Other leaders on the panel included Chris Womack, Southern Company chairman, president and CEO; Chris Colbert, chairman 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, chairman and CEO of QTS Data Centers.

Womack said meeting that demand for electricity was going to take an expanded commitment to nuclear energy. Southern Company’s Georgia Power recently completed the first newly constructed nuclear units in the U.S. in more than 30 years. With all four units now in operation, Plant Vogtle is the largest generator of clean energy in U.S. and is expected to produce more than 30 million megawatt hours of emissions-free energy each year.

“This was something that was an arduous journey for us, but I think it’s something that was very important for our company, for our state, and also for the country,” he said. “As we have this conversation about demand growth, I think it’s even more important that we do big things and do hard things like that as we respond to this demand. And then we have to make sure that we balance all of the obligations that we have in terms of being reliable, affordable, safe and clean. I’m confident that with the processes that we have in place, we can get it done in the right way.”

The DOE’s Frisch said the federal government was working with energy providers to ensure that policy at the federal level can allow providers to meet increasing demand needs.

“We’ve been working on what’s that next industrial policy to go along with that industrial revolution we’re experiencing,” she said.

At the DOE, the priorities are four-fold, she said: creating a more favorable investment environment for deploying clean energy, making sure the clean energy economy is fair and works for all communities, maintaining and enhancing the skilled energy workforce, and partnering with industry on research and development when it comes to the next generation of energy technologies.

“We’re looking at over the next 10 years, 15 percent growth across the whole U.S. and electricity demand,” she said. “That’s from data centers, from a little transportation electrification, and from new manufacturing. Fifteen percent sounds like a lot because we’ve been flat for several years. But I think many of you in this room will remember, just a few decades back, in the ‘90s, we were regularly hitting 30 percent growth on U.S. electricity demand.”

Regionally, she said, there are big pockets of demand. And as data centers continue to shop around for locations to place their facilities, those numbers could change.

“For this year, we’re projecting nationally, 3 percent demand growth that is really being met by solar and storage,” she said. “There’s quite a bit of opportunity now, compared to where we were in the ‘90s, as far as the suite of technologies available, and the tools to help those technologies, to respond to that acceleration.”

Womack said the growth in demand Southern Company is seeing is based on the growth of the state and the region. But along with that growth has come risk. Womack said electric companies need to cut through all the chatter to make sure their projections on need are real.

“There’s a cottage industry out there that’s working every day, chasing economic development projects, and they’re chasing incentives and who’s going to give them the biggest and largest tax break…  As businesses make decisions on where they’re going to locate… we’ll keep working through the process of making sure it’s real before we begin to move through the process of saying, ‘What level of service do you want?’ understanding marginal cost, and then say, ‘This is what you’ve got to pay.’ You’ve got to make sure you push through that funnel to confirm the reality of this process and get through some of the noise that’s out there. It’s the wild, 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 power.

“As we think about making sure that we serve the needs of our customers, there’s got to be more dispatchable power in the mix as we go forward,” said Womack. “There’s solar, battery storage, all in the mix of this plan, but on that cold, wet morning, you’ve got to make sure you’ve got resources available. …We still have commitments, and our focus on net-zero and being sustainable remains. But to support the needs of the customers and the grid, we must have resources that are dispatchable.”

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