Loading summary
Transcript40 lines
- [00:03]
Stephen Lacy
Latitude Media covering the new frontiers of the energy transition.
- [00:13]
Unknown Host
From Latitude Media, this is Open Circuit Something remarkable is happening in the US Economy. In the last two quarters, capital spending on AI has blown past consumer spending. Investments in AI infrastructure have already eclipsed the telecom boom and even the original dot com frenzy. In fact, the top tech companies are pouring so much money into computing power they may be single handedly propping up an economy now wobbling under chaotic tariff policy. It has all the makings of a bubble, but how big it gets and what it means for electricity demand is anyone's guess. Gigawatts of new data center requests are flooding utilities, but the challenge is separating the projects that will actually get built from the ones that will never leave a pitch deck. Forecasters agree demand is rising fast. That much is clear. But the range of possible futures is enormous. So this week a conversation from our Transition AI conference with two exper experts tracking the boom and what it means for utility planning. Open Circuit is brought to you by Natural Power for nearly two decades, Natural Power has provided engineering and consulting services for renewables projects across the US Natural Power supports clients in wind, solar and battery storage with a focus on independent engineering, technical due diligence, energy estimation and developer support. With more than 245 gigawatts of project experience in North America and acceptance from major financiers, Natural Power is responsive, able to meet tight timelines, and pragmatic. Natural Power works with you to understand, quantify and mitigate risks. Learn more@naturalpower.com or click the link in the show notes. OpenCircuit is supported by Sungrow, a global leader in PV inverters and battery storage systems. With a resilient global supply chain and 28 years of experience, developers trust Sungrow to deliver reliable, affordable energy solutions. Sungrow's PV and storage systems are ranked most bankable by Bloomberg Nef, thanks in part to the company's strong fire safety record. That record was demonstrated by live streamed tests and certification from the New York City Fire Department. Learn more@sungrowpower.com or click the link in the show Notes welcome to the show. I'm Stephen Lacy. I'm the Executive Editor at Latitude Media. The open Circuit crew is on summer break for the next couple of weeks, so we're going to be featuring some conversations from our Transition AI conference in Boston from June. And in this episode we're tackling the question that is on everyone's mind just how fast and how high will data center demand climb by the end of the decade? Half of all new US load could come from data centers, and about half of that is AI driven. But utilities just can't take the interconnection queue at face value because it's full of speculative projects. And so while the numbers are big, the uncertainty is even bigger. To help us sort through it and figure out what it all means for planning the grid, I sat down with Rob Gramlich. He's the president of Grid Strategies, and Anuja Ratnayak, an emerging technologies executive at the Electric Power Research Institute. We started the conversation by revisiting a report that Grid Strategies released back in 2023. It was called the Era of Flat Power Demand is over. And it marked a turning point in the urgency overload growth. Here's Rob explaining it.
- [03:32]
Rob Gramlich
Sure. Yeah, it was about two years ago. We have a lot of friends and clients in the sort of large load data center area. So two years ago, the energy procurement people, as many of you know and many of you are some, realized their job just went like 5x, you know, the amount of power they needed suddenly ticked up. So we started studying that. We focus, as you said, on power markets and transmission, and we could see that that was going to change everything. So we put out a report. The era of FL demand is over 18 months ago. I think we're sort of following that, as you said a minute ago, and I totally agree, nobody has a good handle on this. To have a good forecast, you have to know what are we going to use AI for in all of our daily lives? And I mean, I can think of 10 more things, 10 times more things now than I could when we wrote that report, and probably everybody else can too. And I just learned a few this morning from you. So it just keeps expanding. But of course, there's always this race between new uses and efficiency, and that's always been the case. 25 years ago, load growth flattened. At the time of the Internet bubble, a lot of people thought it was going up 3% a year, but it was like half a percent. So we're still in that, you know, that uncertainty. But I do think that, you know, clearly there's a lot more load right now. It's demonstrable. It's happening. So it is a big uptick from where we were a half percent a year for two and a half decades.
- [04:57]
Anuja Ratnayak
And where do data centers fit into that right now? You mentioned like 120 gigawatts of new load by the end of the decade, with maybe half of that being.
- [05:05]
Rob Gramlich
Yeah, that's what we talked about. Yeah. So 120ish new gigawatts by the end of the decade, probably about half of that being data centers and maybe about half of that being AI driven. So that's the new and sudden the problem. Part of the problem in the electric industry is the suddenness. Like the industry can plan for this level of infrastructure, but sudden changes are hard to deal with when we're talking about 60 plus year assets, some of it that you have to build.
- [05:33]
Anuja Ratnayak
So, Anuja, you think it's important to distinguish between are the numbers real for data center load growth and are the utility planning numbers real? Can you unpack that for us?
- [05:44]
Stephen Lacy
Absolutely. So you actually set it up really perfectly, Stephen, when you were talking about what can the future look like? And the two questions that's always in my head when somebody asks me the question about are the numbers real? One is, are the numbers real from the perspective of energy needs for the future of AI that we envision? So the underlying question there is, is there enough data to train new models? Is there enough new use cases we'll come up with to use those models? From that perspective, the answer is absolute yes. The energy growth that we are anticipating, what Rob just mentioned, that number is absolutely real. The second part of the question is the one that keeps the utility industry up at night. This is coming more from the perspective of what should a single utility that has a local jurisdiction plan for? Most of the time we look to our interconnection queues to guide us there. The second question is are the interconnection queues real? The answer there is not quite. It's very valid why it shouldn't be an absolute yes. For anybody who is a practitioner in this field, it's understandable. A developer who's looking to interconnect for a significant load at a relatively short time frame has to ensure that they can meet their objective and therefore they're going to put their name in multiple queues. What that essentially means is every queue in aggregate cannot be assumed as the real future growth for an individual utility. They cannot take their entire queue and go, this queue is real. I have to plan for that. There has to be a mechanism to discount what's in the queue for a single utility that is planning to serve the load that they're anticipating. And that discounting process is really important. And it's one of the things, the work we are doing at EPRI with DC Flex, one of the things we are trying to address is what's the right framework to not necessarily lose sight of what is coming at us at an industry level, but still knowing how to manage the uncertainty in the interconnection queues.
- [08:16]
Anuja Ratnayak
Can you talk a little bit about that process for how you manage the duplication and actually figure out real demand?
- [08:22]
Stephen Lacy
So the framework we introduced is actually, I wouldn't call it net new, because as an industry, we've done this many times before. We never count everything in an interconnection queue, irrespective of the sector, irrespective of the industry. We always know there is no guarantee of a project coming to fruition just because it got in the interconnection queue. It's one of the first things anybody who wants to create a new facility has to do in order to get power. So it's not that there was ever expectation that just because something is in the interconnection queue, it has to be built for discounting. The interconnection queue is a process we've done before. The issue, and Rob actually touched on this, the issue is the scale and the pace of data center growth is very different compared to everything else we've done up to this point. That difference comes from a scale point of view. We are looking at 1 gigawatt plus facilities. There's more than dozen announced 1 gigawatt plus facilities. They are clustered regionally. Think of a 1 gigawatt facility. That's about 10 times the Tesla Gigafactory that we think of as a large load. It's about 500 Costco wholesale facilities that we know. It's about the size of Charlotte, North Carolina or Columbus, Ohio. So the issue here is a low diversity issue from an uncertainty point of view. And Stephen, your question really was, how do you go about the process? The framework that we outlined was taking the interconnection queue and looking at where in the project timeline is the project at. So did they just put their name in interconnection queue versus they've invested in the land, they've invested in the supply chain. They've gone through an engineering study based on where the project is in its project lifecycle. You can give it a different value to say, how likely is this to come to fruition? And based on that, you can discount the interconnection queue in such a way that some of the uncertainty can be taken off.
- [10:57]
Anuja Ratnayak
Rob, how would you characterize the spectrum of utilities that are planning integrating this new load?
- [11:02]
Rob Gramlich
Sure. Well, generally I would say utilities love this load and they want it and they're competing with each other to get it. And in many cases they're Getting calls from their governor's office saying connect these things. And so they want to. Which for many of you who might be in the generation development space, ipps or whatever, ever and heard about the interconnection cues for generation, there's probably a little jealousy there of, wow, they're bending over backwards to find every way they can possibly connect this load. But yet it took me five years to connect my little solar farm. So there are different types of utilities, as Anuja was describing. I think we're seeing a lot of change in the process there. There's a lot of concern. I mean, you have to go through a regulatory process here and the other retail customers are now very concerned that there's going to be strain of costs, a lot of investment to build the infrastructure. And then what if they don't show up? Or are we raising rates for everybody because of just supply and demand? So you can understand why a lot of state process, states, you know, PUC processes are going towards firm financial commitments as the way to ration. Okay, you're real and you count if you've made a firm financial commitment. Because that financial commitment both solidifies the forecast. We know exactly what to plan for now. But also it provides money that can be used for the infrastructure that protects the other ratepayers.
- [12:35]
Anuja Ratnayak
So there's this imbalance where data centers are getting approved potentially faster. Faster than renewable connections. Will that create an imbalance that could be problematic for the grid?
- [12:48]
Rob Gramlich
Well, we do have a supply demand issue right now. And the reality is what we have in the queue that can be connected fast is mostly wind, solar and storage gas is certainly coming in as well now, expansion of gas. But we need all the supply. I mean, we're going to meet this demand. We need all the supply that we can possibly get. And so that combination of wind, solar, storage, gas really has to expand pretty dramatically in just about every region right now. So this is getting to the resource adequacy issue. That's a hot topic in the bulk power network and FERC and nerc. But it's really important to connect it all. Of course, it ties into tax credits and everything going on in Washington too, and Indonesia.
- [13:35]
Anuja Ratnayak
There's this also interesting emerging tension where utilities and data centers and developers are all competing for the same equipment resources. Are we seeing utilities literally getting outbid or developers literally getting outbid for equipment they need to serve these data centers?
- [13:52]
Stephen Lacy
So tension is probably the right word because it's sort of at that early stages for certain aspects. We've seen the Backlog for say generation assets and transformers. And that had some issues prior to this growth spurt. Post Covid, we had highly stressed supply chains for these assets anyway. So this just made it one step worse. What we are seeing sort of net new early rumblings are around the labor markets. So the specialized construction labor that's needed on both sides, that's getting squeezed. And then second, Rob touched on this briefly with the fuel supply. So the only thing that can actually offer the firm generation capabilities that's needed to support this load to large extent comes from gas. While the gas turbine market might be stressed, the gas pipeline market right now most of the pipelines are fully subscribed. That can be an additional supply chain constraint. One part of the supply chain constraint is this conversation around do we really have adequate supply to start with. But the secondary one that we probably ought to be paying more attention to, I think is the real question you're asking Steven, which is what happens to the price point. The industry that used to be the primary consumer of the supply chains was the utility industry, which always had the objective function of managing to lease cost as a societal good. It had to. That was the objective function for us. But when you think about the industrial growth, the objective function is speed to market for them. So that changes the pricing paradigm. And that pricing paradigm has the potential to very negatively impact the utility industry.
- [15:53]
Anuja Ratnayak
Rob, can you talk a little bit more about the supply side and where you see, given the constraints in the gas system, in the gas supply chain, where you see gas playing a role relative to renewables?
- [16:04]
Rob Gramlich
Sure. Well, as Anuja said, I mean there is an issue about the firmness of the power. And my sense from the hyperscaler from data centers is they want full network service, they want all the reliability that the grid provides. And the grid has always been the source of reliability because every generator has a forced outage rate or has a refueling or has a common mode failure, et cetera. So it's the diversity of generation, all pooled, using the grid that is the source of reliability remains true? I think so. I mean I'm more bearish than a lot of people on on site generation. I think the grid power is what is the most valuable and most desirable. So then the question is, well, okay, which, you know, which resource? A lot of talk about nuclear, SMRs, fusion. My friend Rick is here and that's all great, but that's not immediate. Right. The near term, next two to five years is the big challenge. That's where gas plays, I think, a big role it's just inevitable will expand and I think it probably is both gas capacity and in pipeline. I think some of it can be and will be on site. I think most of it will be sort of grid grid connected. But it doesn't mean there's any less of a role for wind solar storage which as part of the portfolio, you know, you're not depending on any one plant to be there 24, 7. That's not the metric and that's. We hear that too often of you have to be 24,7 power. No, the system has to be 247 power. And wind, solar and batteries can play a key role and you can in fact measure okay, what is the dependable collective capacity. So I do think again to meet this load we're going to need all the wind, solar and storage that we were planning to, but gas is going to have to come in as well. Both just to fill the additional need we have, but also provide that firm capacity.
- [17:53]
Anuja Ratnayak
Can you dig a little bit more in by why you're skeptical about colocation?
- [17:57]
Rob Gramlich
Yeah, well, I mean again, and maybe it's my bias and I have good friendly debates with people on X and blue sky and everything about this, but I just think that the reliability really comes from the grid efficiency. Economies of scale have always characterized this industry and still do. So bigger is cheaper and we can, if we plan the system right, get great efficiencies and reliability and more sustainability, better emissions profile from the grid. The wind always blows somewhere. So you connect all the diverse resources across a wide regional and inter regional network. You can get lower carbon, you can get lower cost, you get more efficiencies.
- [18:40]
Stephen Lacy
So I think Rob actually pointed out one of the biggest reasons why colocation by itself is not going to be the end. All the load shape of a data center cannot depend on a single CO located generation facility, at least not the traditional types. It needs to be particularly the new AI profiles that we are beginning to see. Some of those will not be able to just depend on say a combined cycle facility or even a nuclear facility and operate with the same level of reliability and power quality it needs. So I'm not necessarily quite in the camp as Rob to say that co location will not happen. But. But that by itself is not going to be a whole answer.
- [19:31]
Anuja Ratnayak
Can you talk a little bit about the demand side? So you're heading up the DC Flex project, thinking about data centers as a grid resource. How are you defining flexibility and what flexibility attributes are you working on and how can that actually speed up interconnection approvals?
- [19:50]
Stephen Lacy
Sure. So DC Flex started because of the mismatch in timing between expectations from the data center industry and the ability for the utility industry to meet those expectations. So data center industry wants to be up and running in two to three year time window for these many hundreds of megawatts. And as we discussed right now the utility industry requires anything in the 7 to 10 plus year time horizon. How do you reconcile those two expectations? And the answer was the only way we can do that in the short term was if the data centers could be more flexible in the way they consume the grid power. What that means is instead of asking for five nines reliability, it would have to participate in the grid portfolio more as a resource. So the way we define flexibility is sort of twofold. From the data center side, we look at the data center load. And the complete data center load has three components that could be flexible. The actual workload, the compute workload, the auxiliary power, which primarily is cooling load, and then the backup solution. Just about every data center has a backup solution. Choosing the right technology for that backup solution could open up flexibility for the overall load. Then the interconnection side question is the reason there is a time to interconnect for the grid is because it looks at how do I serve this load with the same level of reliability that is expected from me and has been expected from me. Which essentially means it's trying to address a challenge that is created by the new load. Right. Most of the time those challenges could be things like I need additional generation capacity during peak periods. We know peak periods on average is like maximum of 15 days in a 365 day year, or 300 hours if the load was able to respond to those 300 hours in the year using its three flexible components. Now we can reduce the time to interconnect. That same framework applies across transmission constraints, contingency issues, et cetera. So that's the framework we are using in dcflex. About half an hour ago, we announced our first cohort of demonstrations. These demonstrations are intended to demonstrate exactly this. What is the technical viability of data center inherent flexibility? The three legs of flexibility alongside, how does it actually address the grid needs in different use cases? Now that said and done, there is one thing I always want to leave with people about DC Flex. DC Flex is really not trying to necessarily prove that data centers can be flexible. From a pure technical point of view, all three parts of this flexibility has been demonstrated in real world by data centers. The piece that is important right now is this bringing together the two industries to not only confirm the technical viability of data center flexibility, but to create the trust, create the processes, create the programs and the frameworks that's necessary to take that flexibility and really make it used by the utility industry. So these demonstrations are not intended to just be a science experiment inside a living data center. It's about validating the programs that the utilities can put in place and validating the processes and the tools inside the system operator to say, I can capture this flexibility, I can dispatch it, I can use it for the value it creates for the larger society. Then it's also building trust between the data center industry and the utilities. Because part of the conversation that happens is the data center industry goes, I can do it, but why would I do it? Then the utility goes, well, you can do it, but you've never done it up to this point, so why should I trust you? How can I depend on you to have it in my 10 year planning if you don't show up three years from today? I'm holding the excess that I have to manage the risk for. Right. That's the real path DC Flex is truly trying to get us through over the next three years.
- [24:51]
Anuja Ratnayak
I think that sounds like a somewhat familiar story for many people in this room. Rob, how do you think about developing the framework for flexibility?
- [24:58]
Rob Gramlich
Yeah, well, we certainly need it. We could do a lot more faster, integrate a lot more load faster. As Anu just said, it's not just inside the data center. And yes, I think there are opportunities there. As she and her project will say, it's not an all or nothing, but there are some different systems and ways to integrate and shift load and use around. That's important. That will help integrate more. My sense from the hyperscalers is they really want to be 24, 7, 8760 though, largely so we shouldn't look only at that source of flexibility. It's really on the system. And so there's a lot of other ways on the system to accommodate more load, especially, you know, if it's going to be firm load. And so they're, you know, grid enhancing technologies. There's, you know, in fact I'm just looking at Boston and there's, you know, Veer is up here doing superconductors. You can deliver more over existing wires. Got line vision right here, like I think a couple blocks away, dynamic line ratings. You got a lot of companies who are doing a lot of technologies to squeeze more out of the existing grid. And then of course, virtual power plants or other ways to access the rest of the demand side. There should be, you know, other loads around the system that would want to have a discount. We've never as a country been able to, you know, get great programs or really disseminate them, but there's, there's certainly more we can do there. And some utilities are talking about beneficial load, in other words, load that is load. But it doesn't necessarily have to be there at peak because that's easy to accommodate. They can, you know, you don't have to expand. It doesn't affect your whole resource adequacy or total generation. You know, meeting, meeting load if it's not at that peak, if it can be adjustable. So any way in any of your businesses that you can provide flexibility to the system, you should be able to connect faster and at a lower cost. And hopefully we get the regulatory structures in place to encourage that.
- [26:55]
Unknown Host
Open Circuit is brought to you by Natural Power. For nearly two decades, Natural Power has delivered expert independent engineering and consulting services for renewables projects across the US and beyond. Success in project transactions requires an independent engineer who's laser focused on timelines, understands the nuances of risk, and collaborates seamlessly to develop solutions tailored to your needs. Natural Power excels at working within tight time constraints while ensuring diligence never takes a backseat. With a deep expertise in wind, solar and battery storage, Natural Power delivers top tier support and independent engineering, technical due diligence, energy estimation and developer support accepted by major financiers. Their flexible approach ensures projects are built on a strong foundation powered by expertise driven by sustainability, that is natural power. Find out more@naturalpower.com or click the link in the Show Notes. Open Circuit is supported by Sungrow, a leading maker of PV inverters and battery storage systems. As you know, listening to this show, electricity needs are soaring. They're set to grow 2 to 3% each year in the US and solar plus storage is best positioned to meet this demand. It's abundant, affordable and relatively quick to get up and running. Sungrow has been producing this technology for 28 years. With a robust global supply chain, a strong fire safety record, and 740 gigawatts of power electronic converters installed worldwide, Sungrow is ready to drive our energy revolution. Click the link in the Show Notes to learn more or visit sungrowpower.com.
- [28:30]
Anuja Ratnayak
So, a question for both of you. If we think about the high end of the demand projection, 60 plus gigawatts, what do you think are the most acute limiting factors right now in the power sector?
- [28:41]
Stephen Lacy
Anuja that was the one question that I kept going. How would I think of the answer? Because there is no wrong answer. But at the same time every answer also has a solution or caveats. So if I were to position the question from grid interconnect data centers, what is the limiting factor that has to be transmission from a grid interconnection? Rob pointed out some of the things that we don't always capture in the planning process but definitely can be used during the operational timeframes to increase the transmission capacity. But from a limiting piece. I think transmission capacity is the single limiting factor.
- [29:29]
Rob Gramlich
Well, anybody who knows me will be surprised if I disagree with that because I think transmission is the best opportunity, opportunity to expand capacity significantly. Mainly because again economies of scale, I mean you get four times more power for the same dollar spent at the higher voltage relative like 765 versus 230kV. And we're seeing enough load growth in these areas. We're actually seeing for the first time in what many decades,765kv plants being developed in Texas, SPP, MISO and PJM. For that reason it took this amount of load growth to do that. And it doesn't have to take 18 years. Yes, a lot of us, including myself, talk about a number of examples of took 18 years to get transmission built. Doesn't have to. You can actually expand capacity quite a lot in three years, which is in the window of the time frame that we're talking about in terms of acute. So that is helpful. But your question is really about acute. Acute more near term. I mean I do think my sense is there are enough utilities around the country that really want this load that they are finding ways. So the, the, you know, the data center developers who have been knocking on the doors of like scores of utilities around the country and saying what do you got? How soon, you know, they're finding opportunities. It's not all immediate, they want it yesterday, it's not all happening that fast. But you know, over 1, 2, 3, 4 years I think there are a bunch of data centers that are moving forward and you know, now some of them are gigawatt scale. I mean it's amazing compared to what we were looking at just two, three years ago.
- [31:02]
Anuja Ratnayak
And if we think about the biggest systematic risks like increasing costs, reliability, power quality, unlocking a lot more fossil fuel generation. What are you most worried about? Anuja?
- [31:16]
Stephen Lacy
I think for me the one thing that keeps me up at night is when I think about we'll be building the wrong stuff if we were to Stick to the traditional way we've done things and that would end up creating sort of a complete wave of negative implications afterwards. So the potential stranded asset risk is the single biggest systemic risk in my head, particularly from the utility perspective.
- [31:51]
Rob Gramlich
So what I'm. Thank you, Anuja, because you gave me two seconds to think of an answer. I'm actually most worried about the rising retail rate environment which most people in the business have not actually experienced before. But if you were around 25 years ago, there were multiple governors who lost their seats because of it. And I think inevitably we're heading to that mainly because, not because of this issue per se of data centers, but just because equipment is so expensive and we have rising load for a variety of reasons, manufacturing coming in the country, electrification, et cetera, etc, higher demand. Equipment is expensive and scarce. If it weren't expensive and scarce, New low doesn't necessarily raise rates. If you just, you know, the numerator and denominator of how rate making is done. But if the equipment you need is really scarce and yes, as you said earlier, you need it for, you know, the switches and breakers and transformers, you need it for data centers. We already needed a lot and a lot more for, you know, wind, solar, battery integration. We already, we needed it for greater resilience against severe weather and we already needed it just because that existing equipment is 60 years old and it had to be replaced. So for four separate reasons, you need all these same things. So that's going to raise costs. Now we're going to get rates increase. Everybody is vulnerable to getting blamed for that rate increase. Of course you see it in Texas. Anything bad that happens gets blamed on the renewables. In every other state the politics are a little different, but somebody's going to get blamed and then, then inefficient and bad stuff happens, I think it's generally safe to say. So we need to get ahead of this plan rationally and hopefully do all of this in a way to manage rate increases so that really bad things don't happen.
- [33:35]
Anuja Ratnayak
And what's your optimistic scenario for both of you for how we avoid those inefficient decisions? How do you think we can meet this load growth in a cost effective, reliable way? What's your optimistic scenario?
- [33:49]
Rob Gramlich
So proactive planning is the simple answer. I mean in transmission we've already been saying, and FERC had a whole three year long rulemaking process that resulted in order 1920. You'll hear from Alison Commence later and she had a big role in that. But the whole idea was we're doing transmission in the most expensive way possible, which is incremental and reactive. If we could proactively look out 3, 5, 10 and then up to 20 years and plan then we can get the efficient outcome, capture those economies of scale. So that's the answer. The problem is a lot of this load growth is sudden so we have to act yesterday. We can't wait any longer. We have to proactively plan to build the right amount. And I do think a lot of these states and utilities looking at sort of firm financial commitments, that's likely and that enables a much smoother process so that the whole system and consumer advocates and regulators know how much to plan for as opposed to debating between are we going to have between 0 and 10 gigawatts at this util? That's an extremely large range for a single utility. But it is happening. But if we can get more locked in demand so everybody knows and then plan for it asap, I think that's the way to avoid the bad outcomes.
- [35:05]
Unknown Host
Anuja your optimistic scenario, particularly in the.
- [35:08]
Stephen Lacy
Short term window, I think I'm going to stick to my guns and say we need to reconsider load as part of the supply mix the resource side and not really treat it as a 5, 9 reliability, non responsive thing that the utility industry has to meet.
- [35:29]
Anuja Ratnayak
We're at time here. I just have one final question. I think there are a lot of people in this room who are just like trying to figure this space out and I wonder what are you grappling with? What are you trying to figure out right now that is unknown or has a lack of clarity around it that you're currently grappling with with.
- [35:46]
Rob Gramlich
I can start, I mean. Well, first of all, I do think given the importance and opportunity of transmission, I mean we as a firm good strategies are around the regions looking at the right amount to plan for configuration, technology choice. We got engineers and economists doing that. I think that's really important, a great opportunity. But the big topic in electricity, federal electricity policy is really more resource adequacy driven by FERC and Department of Energy and the White House executive order on reserve margins and resource adequacy. There are great ways to tackle that issue and terrible ways to tackle that issue and it has a huge impact on every energy source in one direction and another. So we're certainly focused a lot on how do you do resource adequacy in a sort of a fair, non discriminatory way that achieves reliability, but it does it sustainably, affordably and Everything else.
- [36:40]
Stephen Lacy
I might answer this with sort of two perspectives. So on one side, I grew up for 20 years mostly looking at planning and how to do planning better. We are facing a future that in many ways look very much like the last hundred years. We've had significant growth. If you look at the trajectory of load growth from a curve perspective, it's the same curve that's continuing. However, the future is not growth through mass market, which has significant load diversity. And as much as we don't talk about load diversity, load diversity plays a big role in actually managing a balanced system the next 10 to 15 years. The growth comes from a handful of of sectors. I think Rob's numbers were half of the growth comes from data centers primarily. That takes away the diversity that we sort of used as a crutch and I don't want to use the word used as a crutch as a negative thing. It was always there when that diversity goes away. Particularly for local planners who have to plan a system that can have 60% of their peak load coming from a single industry. That is a very different future. And our idea of oh, we can plan for that with that uncertainty, there is a lot of uncertainty there that we never had to deal with. So that's one side. But the more short term piece that worries me is really the supply chain side really worries me. We don't talk enough about it. We have not done enough enough to understand the true pinch points. And when these two industries come together looking for the same supply chain that exists today to serve both of them, what that's going to look like if we go at this individually instead of together, that really worries me.
- [38:50]
Unknown Host
Rob Gramlich is president of Grid Strategies. Anuja Ratnayak is an emerging technologies executive at the Electric Power Research Institute. This conversation was recorded at Latitude Media's Transition AI Conference in June. Stay tuned. We're going to be announcing our west coast edition soon that's going to be held in the spring. An announcement is imminent on the location and timing. We also just opened registration for the Power resilience forum on January 20th, 21st. That is going to be happening in Houston, Texas. We are going to be tackling the most pressing issues around grid resiliency with leading utilities, lots of different solutions providers and a range of investors. Click the link in the show notes to learn more. And of course you can find all our coverage on data centers, resiliency and the latest business trends in the energy transition@latitudemedia.com.
- [39:43]
Stephen Lacy
Sam.