How power prices are rising due to grid repairs, AI data centers, and natural gas costs

Electricity costs are up 5.5% year over year and natural gas 13% higher. Renewable energy has the ability to dramatically cut costs, but investments in renewables have plunged 36% in the first half of 2025. The lack of federal support for #renewables, including offshore #wind projects that could power thousands of homes, belies the reality here. https://lnkd.in/eY47bT39

Can the U.S. get out of its own way? We’re entering the most electricity-intensive era in our history. AI, advanced manufacturing, EVs, and digital infrastructure all depend on a grid that can handle more, respond faster, and recover smarter. Yet, just as demand surges, we’re seeing a pullback on the very policies and systems that could support that future. A few takeaways from a recent Foreign Affairs Magazine article: • Peak electricity demand is projected to grow 18% in 10 years. That’s like adding California, Texas, and New York to the grid • Half of our electric infrastructure sits idle at any given time • The interconnection queue is now double the size of the current grid. Projects are waiting years just to plug in • Federal incentives for wind and solar are being rolled back, even as prices and outages increase There’s a persistent belief that clean energy systems are more fragile, but the reality is that they’re more dependent on intentional design. For instance, when engineered thoughtfully using tools like flywheels, grid-forming inverters, and battery storage, these systems can be just as resilient as legacy power systems. In fact, by incorporating modern forms of inertia and control, they often become more responsive, more modular, and more precise in how they meet demand. We don’t need to pretend renewables can do everything. But we also don’t need to keep protecting outdated systems at the expense of the ones that can move us forward. The future grid isn’t about choosing one tool over another. It’s about designing systems that use all the tools we have. https://lnkd.in/gdbja4rU

In Australia, we don't generally like to take our lessons from overseas, but sometimes an awareness can be helpful, and especially when the parallels become too clear to ignore. After nearly 20 years of flat demand, United States electricity demand is growing at its fastest rate since World War II. New manufacturing facilities, such as those making semiconductors, and the data centers that underpin the country’s artificial intelligence ambitions consume unprecedented amounts of electricity. In total, over the next decade, the North American Electric Reliability Corporation, the independent regulator tasked with monitoring grid reliability, projects that national peak electricity demand will increase 18 percent from today’s levels—nearly the equivalent of adding the total current demand of California, New York, and Texas combined. Two consequences are becoming obvious - firstly, supply is struggling to catch up. This year, nine out of 13 power markets in the United States are expected to fall below a critical reliability threshold, which marks the level at which the supply of spare power is considered sufficient to avoid outages. Natural gas, now increasingly regarded as "the answer" in the US (as in Australia) is also struggling with an inconvenient fact that new natural gas plants are being delayed until the 2030s because of a 50-month backlog for natural gas turbines. As in Australia, securing the permits for large-scale facilities and transmission for renewables is taking longer, and the interconnection queue—the waiting line for power sources to get approval to connect to the grid—has swelled to 2,600 gigawatts, or twice the size of the current grid. Secondly, as in all cases, price is the variable when supply and demand don't naturally meet, and its already happening. In an April survey run by PowerLines, a consumer education nonprofit, two out of three Americans indicated that utility bills are a source of financial stress. Texas, called out in the article as a well run system, is 50% natural gas (by capacity), a mix the NEM will never achieve. Our challenge will be managing supply and demand as our system grows without this degree of insurance. Long duration is our missing link. https://lnkd.in/e3SfWKcY

A new Conservative Energy Network poll found that two-thirds of likely voters support more transmission lines to boost clean energy and grid reliability. https://lnkd.in/gR_5B9tM

"The cheapest way to put more electrons into the power grid immediately is to erect significantly more solar and energy storage infrastructure" — Neil Chatterjee https://lnkd.in/e4NH6ke4

"Today’s electricity supply crunch offers a perfect moment to break the cycle. FERC should use its rule-making power to make interconnection reforms mandatory, provide clear timelines for upgrades, and levy harsh penalties for underperformance to ensure that capacity grows everywhere as quickly as it has in Texas. It should require that reforms put storage and distributed energy systems on a level playing field with physical power plants to determine which sources produce power at the lowest cost. FERC should also aggressively encourage grid planners to upgrade wires and transmission technology. Policymakers and utilities alike have stalled for too long and claimed reforms are too hard, but in the face of skyrocketing demand, such excuses ring hollow. Despite the Trump administration’s rhetoric about efficiency, it is unfortunately pursuing a regulatory approach that increases uncertainty and reduces investment. Reforming the electric system, however, is precisely where the executive branch should embrace the impulse to break through the bureaucratic hurdles holding back reform." https://lnkd.in/g9tcZ_2g

A great analysis of the drivers and trends that are causing utility energy prices to increase more than twice as fast as inflation. The federal Reconciliation bill’s termination of wind and solar credits — plus growing energy demand from data centers — will continue to drive our utility prices higher. The cost increases we are seeing today are just the beginning…

In this week’s WDEA Newsletter: ·        Utilities Plan for Rising Power Demand ·        Christmann: Data Centers Can Strain the Grid ·        ND Prepares to 'Future-Proof' Electric Grid ·        Burgum Talks Energy Dominance with Hennen ·        School Trust Fund Surges Past $7.5 Billion ·        Landowner Challenge of CO2 Storage to Proceed Read the details and more at: https://lnkd.in/g-QJytTX

Connecticut officials are hoping to boost participation in the state’s nascent energy storage program through the use of a new artificial intelligence platform designed to create networks of home batteries known as “virtual power plants.” https://ow.ly/QQve50WNrQE