As we turn the page toward 2025, we’re taking a look back at some of the biggest headlines throughout the year.

1. Oracle Designing Data Center Powered by Small Modular Reactors – Sept. 11
In a groundbreaking move, Oracle announced it would be designing a data center to be powered by three small modular reactors (SMRs). The company’s Chairman, Larry Ellison, highlighted this project as part of Oracle’s response to the growing electricity demands driven by AI and cloud services. Like other tech companies, Oracle is turning to next-generation nuclear power to support its massive data center operations globally.

2. Vogtle Unit 4 Reaches First Criticality – Feb. 14
Georgia Power announced a significant step with Vogtle Unit 4, marking the achievement of initial criticality, a key milestone in nuclear reactor startup. Unit 4 officially entered commercial operations on April 29. The long-awaited completion of Vogtle’s two new AP-1000 reactors (3 & 4) was a major development in the U.S. nuclear industry after decades without new nuclear units.

3. Here Comes the Gas Boom (Again) – June 19
Natural gas is back in the spotlight as utilities plan for a significant increase in gas plants to ensure grid reliability, amid growing demand for energy from data centers, AI and manufacturing. This re-published article from Burns & McDonnell highlighted long-lead times for equipment and that the gas sector’s role in the energy transition would remain critical in the coming years.

4. Corrosion Cracking at Palisades Nuclear Plant Exceeds Estimates – Oct. 3
The Palisades Nuclear Plant, which ceased operations in 2022, is on the path to unretirement. However, the U.S. Nuclear Regulatory Commission (NRC) found unexpected challenges with stress corrosion cracking in the plant’s steam generators. Despite these setbacks, Holtec International aims to restart the plant in 2025, marking the first-ever recommissioning of a retired U.S. nuclear plant. Holtec also has future plans to install small modular reactors on-site.

5. AWS Acquires Data Center Campus at Susquehanna Nuclear Station – Mar. 5
Amazon Web Services (AWS) acquired a data center campus connected to the Susquehanna Nuclear Station in Pennsylvania, with plans to expand its operations and consume up to 960 MW of power. The deal underscores the growing trend of tech giants and developers seeking reliable, carbon-free nuclear energy for their data centers. In November, the Federal Energy Regulatory Commission (FERC) issued an order denying a revised Interconnection Service Agreement (ISA) proposal that would have allowed expanded co-located load at the Susquehanna-AWS data center colocation site.

We appreciate the power generation and utility industry for their readership and support. We would like to remind you to register for POWERGEN International, the industry’s leading event, which is back in Dallas at the Kay Bailey Hutchison Convention Center, February 11-13, 2025.

Sincerely,

Numerous East Coast states are counting on offshore wind projects to power tens of millions of homes and to help them transition to cleaner energy.

But putting wind turbines at sea requires the cooperation of a powerful landlord: the federal government. Soon, that government will be led by President-elect Donald Trump, who has frequently disparaged offshore wind and said he will “make sure that ends on Day 1.”

In the eight states that have passed legal mandates to reach certain amounts of offshore wind power, Trump’s second term threatens those timelines.

“This is absolutely going to create problems for how we’re going to meet our emissions goals and the energy needs for the state,” said Massachusetts state Sen. Jamie Eldridge, a Democrat who serves as vice chair on the legislative Joint Committee on Environment and Natural Resources.

For many East Coast states that lack a large land base for extensive onshore development, offshore wind in federal ocean waters is central to their plans for a power supply that doesn’t use fossil fuels. Lawmakers in Connecticut, Maine, Maryland, Massachusetts, New York, North Carolina, Rhode Island and Virginia have established mandates requiring their states to produce certain amounts of offshore wind power in the coming years. Other states have passed laws to allow for offshore wind to be added to their grids or set nonbinding planning targets to prepare for the industry’s development.

State leaders say they will continue to pursue offshore wind but realize there may be delays during the next four years.

In the meantime, some say they will continue to build out the needed electrical grid and ports to get ready for turbines, in hopes of speeding up offshore wind once Trump’s term ends. Others say they may need to consider building more onshore energy projects, including wind and solar, in the next few years to meet near-term climate goals.

“That’s something states will have to take into account,” said Dylan McDowell, executive director with the National Caucus of Environmental Legislators, a collaborative nonpartisan forum for state lawmakers. “Is [offshore wind] still feasible, or do there need to be conversations about solar, [onshore] wind, geothermal, other energy sources that could be put into the mix to help meet those goals? There’s more questions than there are answers right now.”

While a handful of offshore wind projects have already started construction or been completed, many more are in various stages of permitting or awaiting lease auctions held by the federal Bureau of Ocean Energy Management. Industry experts say the Trump administration could deny permits, cancel pending leases and halt further auctions. It could also threaten the industry’s financing by denying clean energy tax credits.

In an extreme scenario, the bureau could even side with opponents who have brought legal challenges against projects that already have been approved and retract permits issued under the Biden administration. Trump’s ability to unwind the moves made under President Joe Biden is “underappreciated,” said Timothy Fox, a vice president at ClearView Energy Partners LLC, an independent research firm.

Trump has repeated claims that offshore wind turbines are a major cause of whale mortality — an assertion that scientists say is false. Many of the groups raising concerns about whales to oppose offshore wind are funded by oil and gas donors.

Trump’s transition team did not respond to an interview request before publication.

Offshore wind also has drawn local opposition from coastal residents who fear it will worsen their views and from fishermen who worry projects could block access to key fishing areas. Meanwhile, some Republicans have pointed to the wind industry’s recent financial struggles to argue that it will increase ratepayers’ bills.

“[T]he business model for these projects has fallen well short of projections to the degree that those wind energy developers are either halting construction or asking the government for additional subsidies to make up for projected cost increases,” four Maryland Republican senators wrote to Democratic Gov. Wes Moore in April, unsuccessfully urging him to veto a financing package to boost offshore wind in that state.

Counting on offshore wind

States’ offshore wind goals were already facing difficulties. Numerous projects were canceled or delayed last year as inflation and supply chain issues raised costs dramatically. Now, political headwinds could cause greater delays.

“Offshore wind might not be a viable option over the next four years,” said Fox, the energy analyst. “Unlike a lot of other resources, offshore wind is reliant on a federal review process because these projects are being deployed in federal waters.”

Offshore wind turbines currently provide only a negligible amount of power to the United States. But a handful of projects currently under construction will soon raise that number to 4 gigawatts (1 gigawatt can power about 750,000 homes). And much more is on the way.

Developers of other projects are working to finalize financing or permits, and wind companies are awaiting federal lease auctions that will open up new areas for development. In total, the project pipeline for offshore wind exceeds 80 gigawatts, according to the National Renewable Energy Laboratory — enough to consistently power more than 60 million homes. The incoming administration could thwart most of that production by denying development permits or leases in federal waters.

East Coast states don’t have a viable way to meet their clean energy goals without that offshore production, said Maryland state Del. Lorig Charkoudian, a Democrat who authored a law last year that increased the state’s offshore wind targets.

“We’ll continue to support the ongoing development of offshore wind until we have to make other adjustments,” she said.

The Maryland law mandates that the state produce 8.5 gigawatts of offshore wind energy by 2031. Developers of a trio of projects off the state’s coast, totaling 1.7 gigawatts, are working to secure permits and financing, according to the National Renewable Energy Laboratory. And the state is counting on future lease auctions by federal regulators to prompt more development.

Charkoudian acknowledged that Trump could threaten those efforts, but she said the state remains committed to its offshore wind plans. She noted that Maryland is working to improve its electrical grid so that offshore wind projects can “land” their power, an effort that will continue.

“Even if other things do get slowed down, this will make things move faster whenever it can get moving again,” she said.

Nick Guariglia, outreach manager with the New York Offshore Wind Alliance, a network of industry and environmental groups, said that projects take many years to develop, a timeframe exceeding one presidential administration. He also noted that the maturing industry aligns with Trump’s goals of restoring manufacturing jobs and American energy independence. Members of Congress in both parties are seeing economic growth in their districts because of offshore wind, he said.

“This industry has a lot of things to prove about why it’s here to stay,” he said. “Actions are much more important than rhetoric.”

Regardless of what happens at the federal level, offshore wind backers will urge New York lawmakers to continue investing in infrastructure and workforce development to support the buildout of more turbines, he said.

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

2024 was another banner year for a source of electricity that is better for people’s lungs, better for climate change and may be reaching your home when you turn on the lights or turn up the thermostat — large banks of batteries.

This ability to store large amounts of electricity in batteries was essentially nonexistent a decade ago, but the country had about 24 gigawatt-hours operating as of the end of November, up a whopping 71% over the same date in 2023.

This is welcome news to clean energy advocates including Dariella Rodriguez. She has seen what happens on days when demand for air conditioning or heating spikes and extra power plants fueled by natural gas, located in Port Morris and Mott Haven, fire up not far from where she works in Hunts Point in the South Bronx, New York.

Batteries can jolt into service, sending electricity onto overhead wires, instead of these dirty “peaker” plants. Rodriguez hasn’t seen that transition yet, but she hopes to.

“The people that are exposed to these plants are the most vulnerable people in environmental justice communities already,” said Rodriguez, a director at THE POINT Community Development Corporation there, noting that lower-income people and communities of color often live near peakers.

The nation’s 1,000 peaker plants can be very dirty, inefficient and expensive, according to an analysis by the U.S. Government Accountability Office, a watchdog group that works for the U.S. Congress. Some 63 million people are estimated to live within a three-mile radius of one.

Although peakers run only a small part of the time, they release more harmful nitrogen oxides and sulfur dioxide per unit of energy, the agency said. Those two pollutants cause asthma and other breathing problems.

Peakers also release more greenhouse gases than other power plants do per unit of electricity.
Batteries are “a really obvious solution” to reducing need for peakers, says Daniel Chu, senior energy planner for the New York City Environmental Justice Alliance.

Storing extra power in batteries also extends the hours of the day that you can use clean energy.
“It’s not always sunny, the wind’s not always blowing, but energy storage can help move that generation to when it’s most needed,” said Tim Fox, managing director at research firm ClearView Energy Partners.

That’s why at least half of battery storage facilities in the U.S. are co-located with, or in some other way support solar, an AP analysis of Energy Information Administration data shows. The amount of solar energy in the U.S. is growing and surpassed the 100-gigawatt mark this year.

Another way that the addition of these batteries is helpful to the American electrical grid and grids around the world is that forecasting is getting more difficult.

“With weather patterns changing, the old ways of essentially figuring out how much capacity you need on the grid for extreme events just doesn’t work,” said Oliver Garnett, director of energy services product at the technology company Fermata Energy.

Last, global electricity demand is slated to increase — by about one-third to three-quarters by 2050, according to the Energy Information Administration. Data centers for artificial intelligence, switching vehicles to electricity and population growth are all contributing.

“‘Do we have enough power plants?’ is the classic question every utility asks every year,” said Mike Jacobs, senior energy analyst at the science nonprofit Union of Concerned Scientists. “The beauty of the batteries is that if there’s energy in them, they can be used for unexpected needs.”

Otherwise, if utilities have to find more power generation, they may keep investing in plants that burn gas or coal and account for one-quarter of the nation’s greenhouse gas emissions, instead of retiring them.

Leading the charge for adding new batteries to the grid this year was California with more than 11 gigawatt-hours operating. One way to think about this is roughly the amount of electricity that a nuclear power plant would put out over 11 hours. Then the batteries would need to be recharged to do the same thing again. It’s a limited, but meaningful amount of power. In Texas, 6 gigawatt-hours were online.

Arizona saw nearly 2 gigawatt-hours humming and Nevada — the fourth-largest deployer of storage in the U.S. — had 1.1 gigawatt-hours operational.

Some regions are lagging

Yet many states aren’t using storage yet. As of November, 86% of large-scale battery storage in the U.S. was operating in just those four states.

Some states haven’t set targets telling utilities to go out and build or buy energy storage on their own. Only 18 states have 50 megawatt-hours or more operating.

Others don’t have as much clean electricity to pair with the batteries, or claim storage isn’t reliable in times of crisis. It can also be challenging to connect storage to the grid. Still, experts expect more momentum.

Especially in California and Texas, “That investment and that experiment is paying off very well,” said John Hensley, senior vice president of markets and policy analysis at American Clean Power.

“The word is getting out,” he said. “We’re increasingly seeing the technology move to other parts of the country.”

The blade tip, which is being developed in ORNL’s carbon fiber technology center, incorporates two layers each of standard glass fiber and a low-cost lab developed carbon fiber, with such customized conductive carbon fiber key to dispersing electrical energy across the blade surface.

The researchers also declare using industry-standard equipment and methods to show that the technology can be easily integrated with established manufacturing processes.

“We don’t have enough data to know the true scope of the challenge [of lightning strike damage], but we know it’s a concern to industry and utilities,” said ORNL researcher Vipin Kumar.

“We know wind energy is a reliable source of electricity that supports energy security, but I believe anything we can do to make it more resilient and reliable is important.”

Lightning strikes to wind turbine blades are known to be frequent but are rarely catastrophic.

Nevertheless, they are believed to be able weaken blades with internal damage that can translate to increased repair costs over time, and they are the second leading cause of blade-related downtime.

In the project an entire 2m turbine blade tip was built using the novel materials. This was then tested against the forces of simulated lightning in a specialized lab at Mississippi State University, where the blade tip emerged pristine after tests that isolated the effects of high voltage.

Separate tests in the same lab found that isolated high current remained destructive.

The cost of carbon fiber has generally limited its use to the wind blade’s load bearing structure, but ORNL’s efforts to lower the cost of carbon fiber may make it economical to replace glass fibers in the blade tip, where the lightning strikes most often.

With the demonstration highlighting the possibilities of a new approach to protecting blades using conductive materials or coatings, further innovations are being investigated.

With resin making up the largest portion of the blade tip, these include the use of a more conductive resin.

Another notable benefit of the hybrid carbon fiber composite blade tip is its weight, about 41% lighter than a pure glass fiber blade tip, opening the way for larger blades of the same weight, with the potential to generate more electricity.

The approach also is considered of potential for preventing lightning damage to the composites used in airplanes.

Originally published by Power Engineering International.

The three facilities are the 200-MW Huck Finn Renewable Energy Center, the 150-MW Boomtown Renewable Energy Center and the 150-MW Cass County Renewable Energy Center.

Both the Cass County and Boomtown facilities will serve Ameren Missouri’s Renewable Solutions program. Organizations from across Missouri signed up to take part in the program, increasing their use of renewable energy and supporting its development in the region. As part of the program, participating organizations will also receive renewable energy credits.

Ameren Missouri is also working toward the construction of additional new sources of energy. In 2027, an 800-MW simple-cycle natural gas energy center is expected to be ready to serve as a backup source of energy. The Castle Bluff Energy Center represents an investment of approximately $900 million, and its proposed site previously hosted the coal-fired Meramec Energy Center, which Ameren closed in 2022. The utility owns the property and already has existing infrastructure and transmission line access, reducing the construction costs of the project, Ameren said. Pending regulatory approval, construction would begin in 2026.

Last October, Ameren released its 2023 Integrated Resource Plan, which included investments in natural gas, renewables and battery storage. One of the highlights of the IRP included building an 800 MW simple-cycle plant. Others included:

• Moving back the previously announced addition of a combined-cycle energy center to 2033. This 1,200 MW facility is now scheduled to go in service following the retirement of the Sioux Energy Center in 2032.
• Accelerating Ameren Missouri’s planned renewable energy additions by four years. The company plans to add 4,700 MW of new renewable energy by 2036. This represents a total potential investment of approximately $9.5 billion. The company maintains its goal of 2,800 MW by 2030.
• Adding 800 MW of battery storage, including 400 MW by 2030 – five years earlier than previously planned – with an additional 400 MW of battery storage by 2035. This represents a total potential investment of $1.3 billion through 2035.
• Planning 1,200 MW of clean, on-demand generation to be ready to serve customers in 2040 and an additional 1,200 MW by 2043.

However, there are abundant potential use cases for AI in the nuclear sector, a theme of one panel at POWERGEN International, which is February 11-13, 2025, in Dallas, Texas.

The panel, “AI in Nuclear: Unfulfilled Promise or Just Getting Started?,” will explore how we can build a foundation for the next wave of AI innovation in nuclear power. It will feature Joshua Guzman Bell, Nuclear Technology & Innovation Consultant for Dominion Energy; Forrest Shriver, CEO of Sentinel Devices; and Greg Alder, Director of Plant Optimization for Curtiss-Wright.

Shriver, whose company offers OTAware, a monitoring platform designed to reduce equipment downtime, told Power Engineering he plans to discuss thecutting-edge applications being seen in the nuclear industry, as well as what Sentinel is doing to move AI-driven predictive maintenance forward.

“I think it’s very important for power producers to get an understanding of what’s out there and what’s being done at a high level in AI applications for industry, so they can better understand how to parse and judge the trends that are at the heart of the decisions they have to make every day,” said Shriver. “If you know the field, and know how the pieces move, you can be much more prepared to intelligently react and make decisions based on new information.”

Shriver highlighted the critical need for offline-first AI solutions to address the unique challenges faced by power producers. These companies often have strict cybersecurity requirements that prevent the use of standard off-the-shelf software, or they operate assets in remote locations where 24/7 data streaming is impractical.

Shriver said current AI solutions tend to be cloud-centric, with no clear middle ground between fully on-premises infrastructure and full cloud dependence.

“I’ll be talking a bit about how we’re solving that challenge,” he continued, “but I really do think it’s one of the wider unanswered questions at the moment for power producers that are sensitive about cybersecurity.”

“AI in Nuclear: Unfulfilled Promise or Just Getting Started?” is scheduled for Thursday, February 13 at 11:30 am – 12:30 pm as part of the Nuclear’s Evolution track.

Register for the POWERGEN technical conference program here.

The projects include wind, solar and renewable natural gas facilities (RNG) as well as battery storage capacity.

Solar and wind projects announced this year are a mix of company-built and owned projects and power purchase agreements (PPAs).

Consumers Energy also worked with farmers to announce construction of multiple RNG facilities across the state following expansion of the utility’s MI Clean Air program. In many cases, RNG is considered carbon negative, as it captures and prevents more emissions than it emits.

Consumers Energy’s clean energy goals include bringing 8,000 MW of solar online by 2040 and achieving net-zero carbon emissions from its electric generation and distribution systems.

The Michigan utility’s Clean Energy Plan also calls for eliminating coal as an energy source in 2025 and meeting 90 percent of customers’ energy needs through clean sources.

This has created headaches and financial implications for coal plant operators, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

Over the last two years, U.S. utilities and power producers have collectively accumulated a 138-million-ton stockpile of unused coal at their plants, IEEFA cited from the U.S. Energy Information Administration (EIA) in a recent analysis.

The stockpile matches the entire amount of coal that Appalachia is expected to produce in 2025 and represents $6.5 billion of unused inventory at a time when coal is rapidly being displaced by renewables, IEEFA said.

The $6.5 billion figure is based on a $47.22 per ton average cost of coal delivered to plants (including transportation) from January through September of this year.

EIA expects stockpiles to remain high, staying well over 100 million tons throughout 2025.

Power producers just aren’t burning coal as often.

This year, utility-scale wind and solar will produce more power — 665.8 million megawatt-hours (MWh) — than coal for the first time, according to the EIA’s November Short-Term Energy Outlook.

Gas-fired generation, which became the dominant fuel in 2016 and now delivers more than 40% of the country’s power, continues to push coal out of competitive power markets.

High power demand during winter and summer extremes have historically been key seasons for coal, but utilities and power producers are now getting more of that electricity from renewables and gas.

U.S. coal plants now collectively burn just 1 million tons a day, half as much as in 2015, based on the 12-month average through September. At that rate, it would take power producers more than 4 months to use up all the coal sitting around, IEEFA reported.

When coal stockpiles previously soared, like in 2009, 2012, 2016, and again in 2020, plant owners worked hard to reduce them to a 50- to 60-day supply, but it took them anywhere from 16 months to almost three years to do it, IEEFA said. But rarely has so much coal lingered for so long as it has currently.

The analysis said power companies will need to buy a lot less coal to bring their stockpiles down, even if they keep burning it at the same rate. EIA forecasts coal production output to fall to just 469 million tons in 2025, down from 505 million tons in 2024 and 578 million tons in 2023.

Meanwhile, coal continues to fade from the U.S. generation mix. In 2025, IEEFA estimates that another 13 gigawatts (GW) of the remaining 173 GW of coal-fired capacity will either retire or be converted to gas, further reducing the market for coal.

PwC’s Power and utilities: US Deals 2025 outlook notes that only 13 renewable energy deals were done between November 2023 and November 2024, a significant decline from the 27 a year prior.

PwC attributes the drop in volume to uncertainty surrounding November’s Presidential election. A second Trump tenure in the White House will most likely come with an uptick in fossil fuel investment and the loss of some environmental protections, but the authors of the report expect renewables to remain a focal point for organic capital investment and do not anticipate wholesale changes to federal support of the sector.

The bipartisan Inflation Reduction Act has stimulated billions of dollars in domestic manufacturing investments over the last two years, the majority flowing to Republican-leaning states.

PwC notes an increase in fossil fuel generation activity over the past 12 months, which accounted for 19% of total deal value in that span, nearly triple 2023’s level of 7%. Deals within the subsector were driven by an assumed continued need for natural gas infrastructure to ensure reliability via peaker plants- although the first solar-plus-storage peaker plant just came online in California.

In the last 12 months, PwC tracked 30 total deals (valued at a combined $27.8 billion) in the power and utilities sector, down from 52 in 2023 ($43.3 billion). Vistra’s $6.3 billion acquisition of Energy Harbor in March accounted for 22.7% of the year’s deal volume.

Value propositions in the short-term in the sector remain strong, PwC ultimately concludes, suggesting many strategic, financial, and inbound investors are actively interested in deploying capital. While the renewable energy sector could face short-term uncertainty surrounding future federal incentives like clean infrastructure funding from the Department of Energy’s Loan Program Office, many industry experts expect a more strategic review of IRA provisions as opposed to a wholesale reversal. Strategic due diligence will be crucial as dealmakers navigate a shifting regulatory landscape and potential market volatility, the report adds, making it important to stay agile and informed about policy developments as the new Trump Administration begins to take shape.

Deals are still getting done

Despite the decline in deals for renewable energy projects, some big ones have still been pushed across the finish line post-election, including financing of a few community solar portfolios.

Convergent Energy and Power just closed a programmatic construction-to-term loan, tax equity bridge loan, and letter of credit facility with Mitsubishi UFJ Financial Group that will accelerate the construction of a portfolio of distributed solar and energy storage projects. The developer expects $150 million in initial funding.

Last week, Dimension Energy closed on a major financing package supporting the development of 30 community solar projects across seven states. Dimension secured a $284 million construction and tax equity bridge loan led by First Citizens and closed on a structured equity investment from HA Sustainable Infrastructure Capital, Inc. (HASI) in a new project joint venture. 

The Dimension deal closely mirrors one recently announced by fellow community solar developer Pivot Energy, also led by First Citizens Bank and including a joint venture with HASI. First Citizens will supply Pivot with a $450 million debt warehouse that supplies the flexibility needed to continually pump out new projects.

In 2023, the Joint Legislative Audit and Review Commission (JLARC) directed staff to review the impacts of the data center industry in Virginia. Now, JLARC has released its findings in the report, Data Centers in Virginia.

In the U.S., data center demand is expected to reach 35 GW by 2030, up from 17 GW in 2022, McKinsey & Company projects. Grid operators and utilities expect to see significant load growth driven by electrification, new manufacturing, and data center development. According to EPRI, 15 states accounted for 80% of data center capacity in 2023, led by Virginia, Texas, California, Illinois, Oregon, and Arizona. That concentration creates economic opportunities for states hosting data centers, but could also stress the grid.

Northern Virginia is the largest data center market in the world, constituting 13% of all reported data center operational capacity globally and 25% of capacity in the Americas. According to recent analysis from Upwind, Northern Virginia has a future power requirement of 11,077 MW. Multiple factors have contributed to Northern Virginia’s market prominence, including a strong fiber network, supply of reliable cheap energy, available land, proximity to major national customers, and the creation of a state data center tax incentive.

Dealing with ‘unconstrained’ demand

In addition to the benefits associated with new data center development, like tax revenues and construction investments, they are unsurprisingly also expected to drive an “immense” increase in energy demand, the report said. Energy demand in Virginia was “essentially flat” from 2006 to 2020 – and although the population increased during this time, this was offset by energy efficiency improvements, the report said. A report commissioned by JLARC found that “unconstrained demand for power” in the state would double within the next 10 years, mostly from the data center industry.

JLARC argues that building the infrastructure to meet unconstrained data center demand would be “very difficult,” and even trying to meet half of that demand would likely be a struggle. New solar facilities, wind generation, natural gas plants, and increased transmission capacity would all be required to meet unconstrained demand, and the number of projects needed would be “very difficult” to achieve, the report said. New solar facilities would need to be built at twice this year’s annual rate, and the amount of new wind generation required would “exceed the potential capabilities of all offshore wind sites that have so far been secured for future development.”

Even if the state only tries to meet half of unconstrained energy demand, and Virginia Clean Economy Act (VCEA) requirements are not considered, a bottleneck would likely arise in gas generation. New natural gas plants would need to be added at the rate of about one large 1,500 MW plant every two years, for 15 straight years – a cadence not seen since between 2012 and 2018. With VCEA requirements in mind, JLARC says the biggest challenges would be building enough wind, battery storage, and natural gas peaker plants, with no changes to wind generation needs.

Utility requirements and processes could help limit risks

The report notes that the projected energy demand increases from data centers have raised concerns about whether enough infrastructure can be built to keep up. PJM currently requires utilities to secure “sufficient generation capacity” plus a reserve margin, and the state requires utilities to develop plans describing how generation capacity needs will be met. However, JLARC argues that individual electric utility planning does not guarantee that the generation resources needed for the whole PJM region will be built since regional generation is not centrally planned.

If utilities can’t build enough infrastructure to keep up with demand, they could choose to delay the addition of new large load customers until there is enough generation and transmission capacity on the grid, the report said.

The costs of high demand

JLARC commissioned an independent study of electric utility cost recoveries under current rate structures and found that data centers are already paying the full cost of service, but growing energy demand is likely to increase costs for other customers as well. The large amount of new generation and transmission that needs to be built will create fixed costs that utilities will need to recover, and the difficulty associated with supplying enough energy to keep pace with growing data center demand means energy prices will likely increase for all customers, the report said. Additionally, if utilities rely on importing power, they will be at the whims of the market and its spikes in prices.

Data centers also pose a financial risk to electric utilities and their customers, the report found. For example, utilities could end up building more generation and transmission infrastructure than is needed if forecast demand does not materialize, or if several large data centers close – essentially “stranding” utilities with infrastructure costs they would have to recoup from existing customers. One risk is unique to electric co-ops: if a data center customer delays, disputes, or fails to pay an energy generation bill and the co-op cannot recoup these costs from the customer, all of the other co-op members would have to foot the bill. Finally, if data centers participate in the state’s retail choice program and purchase generation through third parties instead of their incumbent electric utility, generation costs could begin to shift to other customers, the report said.

The report also included several recommendations and policy options meant to help address data center demand in Virginia, including:

• Clarify that electric utilities have the authority to delay, but not deny, service to customers when the addition of customer load cannot be supported;
• Direct Dominion Energy to develop a plan for addressing the risk of infrastructure costs being stranded with existing customers, and file that plan with the State Corporation Commission;

Read the full report here.