CERAWEEK: Renewables, gas, nuclear needed for surging power demand: CEOs
Virginia data center load to hit 13 GW
Permitting remains a constraint
Power companies in the US and Europe plan to combine natural gas-fired generation with zero-emissions resources to meet expected surging power demand, executives said March 21.
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Describing surging demand in Dominion Energy’s Virginia and North Carolina footprint, Robert Blue, Dominion Energy chairman, president and CEO, cited surging data center demand in Northern Virginia as particularly challenging.
“If you looked back a decade, we had roughly 500 megawatts of data center demand, which was a lot for one industry at the time,” Blue said during a panel discussion at the CERAWeek by S&P Global energy conference.
“This year, we’re more than six times that, about 3 GW,” Blue said, whose company is headquartered in Richmond, Virginia. Much of the data center is in northern Virginia’s Loudon County, which Blue said has the largest data center concentration in the world.
“Looking forward, we expect to more than quadruple that over the course of the next 15 years, so it will be 13 gigawatts of data center demand,” Blue said. “Just last year, the 15 data centers we connected had a capacity of nearly a gigawatt.”
Texas was “already having substantial growth,” before data centers and the electrification of the economy boosted demand, said Houston-based Larry Coben, NRG Energy chairman, interim president and CEO. The Dallas-Fort Worth area has “very, very strong fiber” connections to the Internet, which is boosting data center activity in the area, Coben said.
“We’re going to continue to see rapid growth here in Texas,” Coben said. “Our customers are electrifying much more rapidly than you would think.”
Generation development
Dominion plans to cope with this fast-growing load by developing a 2.6-GW wind project off the coast of Virginia which Blue said should start supplying power to the state in 2026.
Markus Krebber, CEO of RWE, a power generation and trading company based in Essen, Germany, said the cost of developing offshore wind in US waters is “probably 30% higher than in Europe, because the industry is not that mature.”
But Blue said Dominion’s offshore project should be on time and on budget.
“By the time we went to our regulators and ask for approval we had locked in our positions in a supply chain and we had firm contracts on the other side, which helped give some a cost certainty,” Blue said.
Dominion is also building about 1 GW of solar power annually, maintaining its seven units of nuclear power and studying the potential use of small modular nuclear reactors. Regarding the latter, Blue said Dominion must ensure that the technology “cost pencils out for our customers.”
“But if we look at as we look at the waterfront for dispatchable, carbon-free electricity, it would be a mistake not to look at nuclear,” Blue said. “It just has to be done in the right way from a cost perspective.”
Permitting constraints
Permitting can also constrain development from the federal to the local level, Blue said, even for siting renewable projects. Local objections can include the loss of agricultural land, aesthetic objections and even philosophical concerns, Blue said, “so it can become very interesting.”
NRG’s Coben said he attended a conference around 2014, where he “was told the solution to all our energy problems was to build wind in North Dakota and then shipping it to load.”
“And then I asked the question, ‘Has anyone here besides me ever tried to permit a transmission line?'” Coben said. “Of course, the answer was no. I started trying to count off the number of permits you would need, and when I got to three digits, people left on the coffee break. So, you know we need permitting reform. … Everybody would like clean, efficient, free power that they don’t have to see or think about, and we’re all working on that, but we haven’t quite found yet.”
NRG has three “shovel-ready” natural gas-fired generation projects, one baseload combined-cycle plant and two peakers totaling 1.5 GW of capacity, Coben said, and NRG hopes to use some recently approved low-interest financing from the Texas Energy Fund approved by voters in November.
“I think the only thing we’re waiting for is that Texas Public Utility Commission is supposed to issue regulations surrounding loan programs at the end of this month,” Coben said.
