The American public is on the precipice of a new power supply crisis. It needs to get ready for a future that doesn’t just want, but needs, reliable and on-demand energy. This confluence of reindustrialisation along with an intensified race in artificial intelligence requires a significantly bigger energy pie. A recent analysis from the Department of Energy (DoE) sounds the alarm on a pending disaster. Without a substantial change in direction, the nation will see a shocking 100-times increase in power outages by 2030.
According to the report, nearly 104 gigawatts (GW) of power plants are expected to retire by 2030. This loss of existing capacity is about to be weighed against the addition of 209 GW of new generation sources including renewables and storage. But disturbingly, out of all these new installations, only 22 GW will be from firm baseload generation sources. This discrepancy raises concerns about the reliability of the energy supply as the nation strives to meet its increasing demand.
The Risks of Plant Retirements
Second major retirements of power plants present a serious and immediate threat. The current interconnection queue for new generation resources is not enough to close the gap in reliable capacity. Consequently, many areas can expect their likelihood of blackouts to rise by upwards of 30-fold. That’s an underestimate even accounting for the many retirements in the pipeline.
The 104 GW of firm generation cannot be retired before there are timely replacements. If we let it die, we can expect ourselves to pay dearly. In adverse weather conditions that impact these sources of generation, the risk for widespread substantial outages quickly multiplies. Aging infrastructure at the core of this alarming report, the collective annual outage hours could increase from single digits to over 800 hours per year. This further escalation puts millions of homes and businesses at risk.
Government Commitment to Energy Security
We are pleased to see the US administration moving to address these alarming projections. Like us, they are dedicated to supporting an energy policy that puts affordable, reliable and secure energy first. The American energy dominance agenda President Trump has laid out doesn’t pick winners and losers among different forms of energy. The Department of Energy stepped in, issuing an emergency order. This measure is a bid to avert blackouts across the southeastern US, emphasizing the immediate need to address looming energy shortages.
The report highlights the importance of passing new, innovative ways to assess resource adequacy, leaving behind old peak-hour tests. These new, creative strategies need to take into account not just the number of power outages, but their impact in terms of magnitude and duration. These kinds of assessments are essential to guaranteeing a strong energy infrastructure, one that can stay ahead of our growing and evolving demands.
The Path Forward
The country stands on the brink of momentous change in our energy economy. Stakeholders will need to invest in orderly, equitable replacement of retiring power plants in due time. Addressing capacity deficits and investing in diverse energy sources will be crucial for mitigating risks associated with increased outage hours.
