Record Electricity Demand Signals the Need for New Reliable Power
By Paige Lambermont
Estimated Reading Time: 2 minutes
In July, two separate records for hourly power demand were set for the Lower-48 states. Amid summer heat on July 28th, demand hit 758,000 megawatts (MW) for the hour between 6 PM and 7 PM. The next day, demand climbed even higher, breaking the record at 759,180 MW. The previous record of 745,020 MW was set in July of 2024.
This record-breaking power demand shows that the projections for increased power demand are real and beginning to materialize. As new data centers are built for artificial intelligence and other applications, and more appliances and vehicles are electrified, demand for electricity will continue to climb.
Rising power demand will require more reliable power plants to meet that need. In recent years, subsidies for wind and solar through the Investment Tax Credit, Production Tax Credit, and other sources have contributed to more of these facilities being built. These credits have also allowed wind and solar to undercut the prices of more reliable power sources in market auctions, making the reliable facilities less economically solvent. The reconciliation bill passed in July will phase out these credits for facilities starting after December 31st, 2027. This phase-out is a great step, but plenty of market distortion has already occurred.
New intermittent power has been built while reliable power—such as nuclear, natural gas, and coal plants—has been retired. As this pattern continues, the intermittency of these sources, combined with the closure of reliable units, becomes more of a problem for the reliability of the power grid. 104 gigawatts (GW) of reliable capacity is projected to retire by 2030, which will further exacerbate this problem. As power demand continues to rise, the need for reliable capacity will only become more apparent.
Meeting this rising demand will require keeping existing reliable power plants online and easing the regulatory burdens to build new reliable capacity. Broad-based, technology-neutral permitting reform is essential to allow sufficient new capacity to be built quickly enough.
This permitting reform should amend the National Environmental Policy Act, Clean Air Act, Clean Water Act, Endangered Species Act, and other environmental laws because they all impose significant permitting obstacles. These obstacles form a web of costly and time-consuming hurdles for those looking to build new energy infrastructure. Reforming these laws in a way that removes redundancy would go a long way towards meeting impending demand growth.
Overall, new reliable power is needed, or reliability will suffer. Making it easier to build that power in the near-term is essential.
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This article was published by The Independent Women’s Forum and is reproduced with permission.
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