For decades, planning for electricity demand has largely been the responsibility of utilities and grid operators.
However, that model is now being tested by the scale and speed of today’s demand growth. Artificial intelligence, data centers, electrification and advanced manufacturing are adding large loads in new locations, often much faster than energy infrastructure can be planned or delivered. At the same time, aging assets, interconnection backlogs, equipment constraints, permitting requirements, experienced labor shortages and affordability concerns are complicating the response.
Meeting this demand will require coordinated decisions across an increasingly interconnected physical, economic and social system.
Electricity demand is now a cross-sector challenge
The power sector has transitioned rapidly from an era of relatively modest growth to one in which some forecasts contemplate a dramatic expansion of the grid.
“It took roughly 140 years for us to grow our grid to over 1,200 gigawatts,” said Doug Jones, executive director of power delivery at WSP. “Some industry forecasts suggest we’re being asked to double that capacity in the next 15 years.”
The precise trajectory will vary by market, but the underlying shift is clear. Utilities must now prepare for growth that would have appeared highly unlikely only a few years ago.
The sources of demand differ from the incremental residential, commercial and industrial growth around which utilities have traditionally planned. A hyperscale data center, for example, can introduce an enormous load in one concentrated location. Its load may remain consistently high or vary substantially, depending on the facility and the nature of its computing activity.
Sara Mochrie, executive director of business development and growth for the U.S. power and energy market at WSP, noted that data centers represent a different type of customer because their demands do not follow conventional daily work and household cycles. Those characteristics lead utilities to consider not only how much additional energy will be needed, but also where, when and how that energy will be consumed.
Timing adds another dimension. Data center developers are looking to enter markets quickly, but a new transmission project may need a decade or more to plan, permit and deliver. The generation interconnection process can also extend for years, leaving a fundamental mismatch between the speed at which demand can materialize and the grid can respond.
These conditions are bringing organizations that once sat at the edge of utility planning closer to its center. Large energy users, developers, equipment manufacturers, technology providers and infrastructure partners increasingly influence the location, configuration and timing of energy investments. Communities and regulators must consider how these investments affect economic development, land use and customer costs.
Utilities remain central to the process but resolving the demand challenge increasingly depends on decisions made across a broad group of participants.