Meeting AI Power Demand Means More Renewables, Grid Officials Say
By Peter Behr
Energy developers, investors and providers say solar and wind must be part of an “all-of-the-above” response to surging electricity demand.
Ballooning power requests from data center developers requires more of the solar, wind, and storage battery investment that President Donald Trump opposes, grid and finance experts said Wednesday at a U.S. Energy Association webinar.
The panel featured a cross-section of grid officials, consultants and financiers who stressed that a shock wave of new power demand from artificial intelligence is hitting an unprepared U.S. power system. Their prescription: Utilities need to add as much power to the grid as possible, from nuclear and gas to wind and solar.
“Electricity scarcity is upon us, and this is the new world for industrials, for data centers, for consumers, where electricity is not abundant and we need to manage sources of power,” said Jeff Weiss, executive chair of Distributed Sun, a solar power developer. “We’ve never had this in America.”
Trump has been hostile to renewable energy — on Wednesday, for example, he called wind and solar power "THE SCAM OF THE CENTURY!" — and Republicans are phasing out clean energy tax credits (see related link). Many analysts predict that solar growth, now booming, will slow dramatically by the end of the decade.
Clint Vince, chair of the U.S. energy practice at the global law firm Dentons, praised Trump’s support for new nuclear plants and agreed with the administration's steps to keep online some older fossil fuel power plants. But he criticized Trump's steps to restrict renewable energy, including new guidance from the Treasury Department that limits wind and solar project eligibility for valuable tax credits.
“The limitation on solar at the moment is really unfortunate,” Vince said.
Energy Secretary Chris Wright has asserted that the administration is "not ending renewables."
“The previous administration thought wind, solar and batteries were going to power the world. They're not going to power the world. So you just got to look at them in a more realistic context," Wright told POLITICO on Friday.
Wright has said solar power will thrive in the Trump administration. But Vince seemed unpersuaded Wednesday, emphasizing that "solar has been severely disadvantaged."
“Solar combined with battery storage has been doing very well, not as a complete solution … but it's a partial solution that's very important, because we're going to need as much generation as we can get, as quickly as we can get it,” he said, later adding: "I think it will be all of the above."
Tom Falcone, president of the Large Public Power Council, said the trade group's members — which are large public power utilities — have to add about 60 gigawatts of power over the next 10 years.
"They're adding all kinds of generation and transmission," he said. "So nuclear, renewables, natural gas — most times you end up having to build a balanced portfolio."
Derek Bentley, head of energy transition at Solomon Partners, a boutique investment bank, noted the backlog for new natural gas turbines, with major manufacturers saying new customers will have to wait until 2029 or later for units. Similar delays and price escalation confront orders for grid transformers.
Meeting increasing demand will "require a lot of things all coming together," he said.
“Data centers will co-locate with natural gas or a nuclear facility or combinations of renewables and energy storage as well, because, unfortunately, there just isn't a silver bullet solution right now," he said.
Panelists agreed with the Trump administration’s efforts to speed up regulatory reviews of energy infrastructure.
“We're still dealing with and operating in a 20th century system, and we're trying to grow radically in the 21st century,” Weiss said. “We don't have a regulatory framework that allows for that. … Our regulations and structures across the country will fail us,” unless they are reconceived and restructured.
But Weiss said the challenge goes beyond just opening lanes for new power generation.
“The state regulators and the utilities need to have a mechanism — which not all of them have — to deploy near-term solutions such as grid enhancing technologies, reconductoring, flexible interconnection permitting, upgrading their transmission," he said. "It's giving them permission to think in the 21st century.”
Tom Wilson, principal technical executive at the nonprofit Electric Power Research Institute, said that 50 utilities, hyperscale data center users and grid operators have joined EPRI's DCFlex program. The program is designed to create flexible data center operations that can support power flow stability rather than threatening it, as when a huge center suddenly shuts down and drops off the grid.
The White House generally endorses flex strategies in its AI Action Plan.
Wilson said DCFlex measures include adding strong battery backup to data centers that would allow centers to cycle off the grid temporarily during emergencies, moving AI operations around a cluster of linked centers to relieve system stress, or replacing older power lines with higher capacity conductors and power flow management software.
“It’s nice to be able to demonstrate flexibility, but if you have no incentive to do it, then it doesn't have much value. And so in our demonstrations, we're looking both at the physical, technical issues, but also the policy issues, the market design issues … that would make that a reality,” Wilson said.
“It's a lot of little things that we have to do to try and speed up the process,” said Karen Ornelas, a director in electric operations at Pacific Gas and Electric Co.
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