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The Era of Flat Power Demand is Over

The Era of Flat Power Demand is Over

Full Title: The Era of Flat Power Demand is Over
Author(s): John D. Wilson and Zach Zimmerman
Publisher(s): Grid Strategies LLC
Publication Date: December 1, 2023
Full Text: Download Resource
Description (excerpt):

Over the past year, there has been a significant increase in the 5-year electricity demand growth forecast in the United States. Grid planners have revised their projections, with the nationwide electricity demand growth forecast rising from 2.6% to 4.7% over the next five years, according to 2023 filings with the Federal Energy Regulatory Commission (FERC). This revision means that peak demand is expected to grow by 38 gigawatts (GW) through 2028, necessitating rapid planning and construction of new generation and transmission infrastructure.

However, this forecast might still be an underestimate. Recent updates suggest additional gigawatts will be needed, and next year’s forecast is likely to indicate an even higher growth rate. The primary factors driving this increased demand include significant investments in new manufacturing, industrial, and data center facilities. Since 2021, commitments for industrial and manufacturing projects have totaled approximately $481 billion, with over 200 new facilities announced in the past year alone. Additionally, data center growth is expected to surpass $150 billion by 2028.

Despite this rising demand, the U.S. electric grid is not prepared for such significant load growth. During the first half of the 2010s, an average of 1,700 miles of new high-voltage transmission lines were installed annually. However, this average dropped to just 645 miles per year in the latter half of the decade. This reduced pace of infrastructure development, coupled with low transfer capability between regions, poses a significant risk to grid reliability, especially if load growth outstrips the deployment of new generation capacity in certain areas.

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