Energy demand from data centers, manufacturing expansions, and other large facilities is rising at an unprecedented pace. Policymakers and utilities are at a critical juncture and must decide how to integrate large loads while preserving grid reliability, incorporating clean resources, and maintaining reasonable costs for all customers.
October 14 and 15, the North Carolina Utilities Commission (NCUC) held a technical conference to explore large electricity load demand in depth. In our previous post, we discussed the Carolinas Clean Energy Business Association (CCEBA)’s written comments to the NCUC regarding the state’s large load proceedings. CCEBA additionally participated in the conference on October 14th, contributing to a larger discussion that included utility representatives, major load customers, and national experts examining how utilities and regulators across the country are responding to surging demand.
CCEBA’s Testimony: Transparency, Efficiency, Flexibility, and Market Solutions
Casey Collins, Director of Utility & Energy Services at Duke University, spoke first on behalf of CCEBA and drew on years of experience managing the nuances of the University and hospital systems’ complex microgrid. Duke U’s facilities currently draw on more than 85 megawatts (MW) in the Carolinas alone, and may see at least 50 more MW of need over the coming years. To put things in perspective—a single data center may require the equivalent of three Duke campuses in terms of load growth.
Collins broke down the questions rooted at the heart of this NCUC docket:
- How should Carolinas resource planning look in the coming years?
- What generation sources should we use, and how can we fully utilize existing assets in addition to building new ones?
- How can we balance the economic value of new large loads with the risk they pose to the rate base?
- What do we need to do to align these decisions with North Carolina’s 2050 net-zero commitment?
To address these, Collins deployed a thought exercise: If we built a new Duke University today, how would we handle it? What would we expect of a modern utility partnership to which we pay eight figures every year?
- The ability to procure renewable energy and retain associated environmental benefits and credits would be the first key—clean energy is a least-cost, low-risk, high-reward way to provide necessary power.
- Transactions must also be transparent—before execution, during, and after—and they should include plenty of data like marginal costs, real-time emissions, and more.There should be shared appreciation for risk, to ensure that a large facility isn’t burdening other customers, its neighbors.
- Finally, Collins concluded, there should be energy choice and competition: “innovation follows where customers are empowered to participate.”
The demand needs we face today are novel challenges that will require creative regulation, transparency, and partnership between regulators, utilities, and large customers. Said Collins, “large load customers aren’t just consumers…we’re ready to co-invest in resilience and decarbonization when given a seat at the table.”
Michael Hagerty, Principal at The Brattle Group, offered further insight on CCEBA’s behalf and emphasized that North Carolina has the opportunity to innovate at the intersection of efficient planning and economic development. Large loads will add more demand in the next five to ten years than electric vehicles were projected over thirty years. Hagerty pointed to modeling that shows how clean energy resources—especially solar and storage—can help address speed to market issues and meet incremental load growth more cost-effectively than traditional capacity additions. While new resources are coming online, system planners must also maximize use of the existing power system via demand-side resources, enhanced rate options, and grid-enhancing/advanced transmission technologies.
North Carolina should strive to emulate creative solutions, like co-locating data centers with generation (“energy parks”), that are being deployed across the country in markets like ERCOT, SPP, and PJM. Studying large loads and generation together can reduce costs and accelerate interconnection, therefore meeting needs faster.
Hagerty called on the NCUC to pursue all opportunities that can improve the competitive advantage of power system resources, while simultaneously attracting large loads and limiting burdens on other ratepayers.
Recent Comments