Over the course of the last year, there’s been a major shift in the dynamic between the utilities facing massive load growth and the industry of tech solutions to address that growth.
That’s according to Loan Programs Office head Jigar Shah, who said his office has been planning for significant load growth since the Biden administration took office, thanks to the impact of efforts like the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the Chips and Science Act.
“The President and the Secretary knew that the decarbonization plan they were rolling out was going to lead to load growth,” Shah told Latitude Media at the RE+ conference this week. “Cloud load growth is something that we had seen coming.”
However, he added, “what’s happening with AI of course has been a bit faster than people expected.”
But now, Shah said, that not unexpected but still surprising growth is forcing another change: the dynamic between utilities and the tech industry players offering load growth solutions.
“The big thing that’s different [this year] is that I think there’s a real concerted effort by the utility companies to reach out to the industry to say ‘we need your help,’” Shah said, which represents a step change since last year’s conference.
Twelve months ago, utilities “had not yet revealed their cards,” he added. Today, though, “utilities have been far more frank about the fact that they really need help and that without the help of the industry, they’ll be unlikely to be able to meet the load growth requirements in their territories in a timely fashion.”
That shift in utility approach is key to building a strategic and targeted load growth plan, Shah said. While many utility-scale developers are “absolutely looking to serve those customers” with a mix of solar, storage, and some natural gas, in Shah’s mind, the best path forward has utilities in the mix.
“I don’t know that [the vendor community] necessarily can solve data center load growth on its own,” he said.“It is not going to work for folks to just be knocking on doors, finding customers, asking for interconnection permits and solving it.”
Instead, there needs to be a “data exchange” in which utilities are telling partners specifically where they need help: which circuits have the most challenges, for example, and which new loads can’t come online. But despite the change in utility approach Shah said he’s seen in the last year, there’s still something of a disconnect when it comes to what it means to share data.
“In general I would say that utilities believe that they’re sharing in a very healthy way,” he said. “I think the industry is laughing out loud and saying that they need better, more actual data.”
And that’s where he sees as DOE’s place: as a translator, “to help both sides get the information that they need to more confidently invest.”
