How utilities can manage surging electricity demand
A boom in cloud computing and artificial intelligence, plus reinvigorated U.S. industrial and manufacturing growth, combined with building and transportation electrification, have grid stakeholders suddenly and unexpectedly confronted by a new paradigm—an era of significant electric demand growth that could strain the grid.
U.S.-wide electricity demand and summer peak demand projections relative to 2024
9%
5%
18%
11%
The latest demand projections are significantly higher than projections made as recently as 2023. Utilities and electric grid operators will be constrained in their ability to meet the demand growth in some regions due to limited capacity to connect new generation to the grid or deliver more electricity to customers.
A new report from ICF maps the locations where demand growth and grid constraints could present the greatest challenges and offers six recommendations for planners and customer program leaders to help their utilities deliver reliable, affordable electricity amid this challenging new paradigm.
Electricity demand growth hot spots
- Limited transmission system capacity to accommodate more electricity from new sources of generation.
- Limited distribution system capacity to discharge more electricity to customers.
- Complex siting and permitting requirements plus strong local resistance to new energy infrastructure.
Demand growth and grid constraints in Northern Virginia
The extent of the overlapping challenges can be viewed at the local level. For example, Northern Virginia (NoVa) has a dense population of more than 2.5 million people and is often called “Data Center Alley” for the ongoing explosion of electricity-hungry data centers built in the area.
Rapid demand growth combined with grid constraints makes it more challenging to balance the pillars of electricity service— reliable and affordable. However, the challenges are not insurmountable, and smart and effective utility programs will be crucial for success.
ICF recommends six tactics for utility planners and customer program leaders to stay one step ahead.
- Create more sophisticated and integrated system planning.
- Identify ideal locations for renewable energy projects.
- Evolve the distribution grid.
- Plan and implement next-gen customer programs.
- Engage with regulators.
- Leverage data and artificial intelligence.
ICF’s cloud-based renewable energy analytics platform, EnergyInsite, maps the future to get ahead of challenges.
ICF has issued a new report that leverages EnergyInsite, our energy analytics platform, to measure and map electricity demand growth across the U.S. and the constraints to addressing demand. ICF experts use the information to identify risks and offer data-backed recommendations to balance the need for reliable and affordable electricity.
- See which regions face high electricity demand growth and significant grid constraints.
- Identify the obstacles to building new energy infrastructure to meet rising demand.
- Learn six recommendations to stay ahead of the challenges.
The new electricity demand growth paradigm arrived quickly. Many regional grids face a challenging road to adjust, but the challenges can be met. Now is the time to assess the new reality, adjust plans, and implement new strategies.