CERAWEEK-US power companies, regulators must move quickly to meet growing demand, execs say
By Georgina McCartney and Liz Hampton
HOUSTON, March 20 (Reuters) - U.S. public utility commissions and power firms will need to accelerate the construction of power capacity and infrastructure to meet growing demand from new data centers and increased electrification, executives and regulators said on Wednesday.
The number of data centers is increasing rapidly to support artificial intelligence, crypto mining and the increasingly digital global economy.
The rapid deployment of artificial intelligence throughout the economy has pushed power demand beyond many utility forecasts, said Williams Companies CEO Alan Armstrong on Wednesday.
"It's an emerging issue in that past two or three months that has caught the industry by surprise," he said.
Power demand from data centers will grow to 30 gigawatts by 2030 from 10 gigawatts in 2022, Armstrong said.
In some cases, utilities are actually turning away data center customers, unsure if they can handle the demand , said Michele Wheeler, vice president of regulator and political affairs for power giant NextEra Energy.
"As an industry, we like to plan and plan and plan and plan and then we'll execute. We don't have that kind of time if we're going to actually make the most of this transition opportunity," she said.
The time frame to build new infrastructure is much faster than the industry is used to, said Jimmy Glotfelty, Commissioner of the Texas Public Utility Commission.
The expansion of power infrastructure, particularly of new transmission, represents one of the biggest pinch points for the power sector, Glotfelty said.
"It takes a long time to make decisions and to build things, and we have not kept up our rules and time lines that are needed to succeed," Glotfelty said.
Glotfelty said that he was optimistic that Texas would be able to meet demand growth, but that the grid operator ERCOT, the commission and lawmakers would have to move quickly to do it.
"We're going to have to do a better job at ERCOT, at the Commission, at the legislature to address issues sooner, looking forward, before they become a liability problems," he said.
In Texas, the electrification of the oil industry is adding to rising power demand from data centers and a boom in crypto-mining. Using power reduces emissions at oilfields and can cut costs. New power infrastructure is urgently needed in regions such as the top U.S. oilfield, the Permian basin.
"Poles and wires are a huge need in Texas," said Danny Wesson, chief operating officer of Midland, Texas-based shale firm Diamondback Energy, speaking at an energy conference in Houston.
"We've seen some tight bottlenecks in trying to connect our operations to the grid," he said.
Diamondback now running about 95% of its field on the grid, versus 60% a few years ago, while half of its oil well completion operations and roughly 75% of its drilling equipment are running on grid power, Wesson said. (Reporting by Georgina McCartney and Liz Hampton in Houston; Editing by Simon Webb and David Gregorio)