With California alone requiring roughly 150,000 new megawatts to meet the state’s clean energy goals and keep the the lights on, how the energy sector can harness this increasing demand to accelerate deployment of emerging technologies is the focus the latest Pathways to Commercial Liftoff Topic Brief from the US Department of Energy. VX News provides this excerpt from How Rising Electricity Demand Can Support Liftoff of Clean Energy Solutions, which summarizes the opportunity to accelerate commercial deployment at scale for multiple available and emerging energy and grid solutions that are part of this broad portfolio, including advanced nuclear, next generation geothermal, grid enhancing technologies, virtual power plants and more. Watch a webinar on the brief featuring Jigar Shah, Loan Programs Office Director, Dr. Vanessa Chan, Chief Commercialization Officer and Director of the Office of Technology Transitions; and Louise White, Senior Consultant, Loan Programs Office/Office of Technology Transitions, here.
Addressing rising electricity demand requires a portfolio approach to meet near-term demand (3-5 years) with commercially available technologies while paving the way to support long-term (10+ years) growth to stay on the path to a clean energy future.
As outlined in DOE’s Clean Energy Resources to Meet Data Center Electricity Demand, the United States is returning to a period of rapid electricity demand growth. Electricity demand is expected to grow ~15-20% in the next decade and could double by 2050 to meet net-zero emissions targets – driven by economic development (manufacturing and industrial growth, data center expansion) and beneficial electrification (transport, building, industrial). This level of growth is comparable to historical U.S. demand growth rates that grew rapidly through the mid-2000s. The Department of Energy (DOE) has been anticipating and planning for increasing electricity demand as part of the overall strategy to achieve net-zero emissions targets.
Investing across each segment of the power system – from bulk power generation and storage through the transmission and distribution delivery system and to distributed resources and end-user efficiency – is critical to comprehensively support demand growth. DOE’s 2024 Future of Resource Adequacy report further outlines the portfolio of technology solutions available and necessary enablers (e.g., modernizing interconnection processes, evolving grid market frameworks) to meet electricity demand needs while maintaining a reliable, affordable, and secure grid.
DOE’s Pathways to Commercial Liftoff series (“Liftoff reports”) identifies what it takes to reach commercial deployment at scale for multiple available and emerging energy and grid solutions that are part of this broad portfolio.1
Today, solar PV, land-based wind, battery storage, and energy efficiency solutions are some of the most readily scalable and cost-competitive resources to meet rising demand. In addition to continued investment in these resources and expanding grid delivery infrastructure, scaling other energy and grid solutions – such as those covered by the Liftoff reports (e.g., next-generation geothermal, nuclear, gridenhancing technologies, virtual power plants) – will also be critically important to ensure a cost-optimal, diverse portfolio of resources are readily available to reliably meet demand over time.
Rising Electricity Demand Elevates the Need for Liftoff
For this subset of energy solutions covered by the Liftoff reports, rising demand today supports three opportunities that industry can pursue to help address power needs in the near term and enable the solutions needed for the long term:
• Invest now in clean bulk power generation and storage – including advanced nuclear, nextgeneration geothermal, offshore wind, power plants with carbon capture, long-duration energy storage, and hydrogen – to ensure expanded availability of these technologies at scale to meet the long-term doubling of demand.
• Enhance the existing transmission and distribution grid now by rapidly scaling proven advanced grid solutions (e.g., advanced conductors, grid-enhancing technologies).
• More efficiently serve demand now with deployment of virtual power plants and energy efficiency improvements to buildings, industrial plants, and transportation.2
Accelerating liftoff for these technologies could collectively add hundreds of gigawatts of capacity on the system to meet demand needs by the mid-2030s.
Liftoff Opportunity: Invest now in clean bulk power generation and storage
Investment in continued research, development, demonstration, and deployment of the clean power generation and storage solutions covered by the Liftoff reports must continue and expand in the near term so that these technologies are deployed at scale by 2050 to meet long-term needs. At scale, these technologies can provide essential firm capacity to meet demand and other grid services to integrate variable renewable energy resources.
Achieving net-zero in the United States by 2050 requires at least 700–900 GW of additional clean firm capacity, which will enable the increased deployment of variable renewables. Even when priced at a premium per unit of energy, the inclusion of nuclear and other clean firm resources can reduce the system cost of decarbonization by reducing the need for variable generation capacity, energy storage, and transmission. A cost-optimal portfolio includes a diverse mix of clean firm generation, variable renewables, grid expansion and upgrades, and flexible balancing resources, including energy storage of varying durations.
Completing the current pipelines for offshore wind and carbon capture and storage (CCS) projects and significantly investing in other generation and storage solutions (e.g., advanced nuclear, nextgeneration geothermal, long-duration energy storage (LDES)) could add ~65-135 GW capacity to the grid by the mid-2030s.3 This is on the order of magnitude of the ~155-165 GW of resources needed by 2033 (including peak demand growth and replacement of retiring assets) based on the North American Electric Reliability Corporation’s (NERC) most recent industry outlook. The need for clean firm capacity increases even further if the United States stays on a path to net-zero emissions economy wide by 2050, due to accelerated electrification and the need to replace capacity from existing fossil resources. These early new builds could be co-located and/or deployed in conjunction with new demand growth centers to help meet near-term needs (e.g., co-locating data centers near advanced nuclear or geothermal developments). These solutions could complement continued deployment of other available utility-scale and distributed resources (e.g., land-based wind, solar, virtual power plants, distributed energy resources, microgrids) to meet demand needs.
This early investment is critical so that these technologies are available to deploy at the scale needed to meet 2050 clean energy needs. These technologies could collectively deliver an estimated 6501,300 GW capacity by 2050, representing ~70-150% of the 700-900 GW of additional clean firm generation needed for net zero emissions by 2050.4 This indicates that sufficient technical capacity is available to meet future demand needs, providing a pathway for the most cost-effective solutions to be competitively deployed to best meet future system needs. Without sufficient investment in these solutions today to achieve liftoff, only ~45-80 GW of capacity would be added by 2050 under a business-as-usual approach.5
Liftoff Opportunity: Enhance the existing transmission & distribution grid now with advanced grid solutions
Rapidly scaling commercially available advanced transmission and distribution solutions (e.g., advanced conductors, grid-enhancing technologies, system automation technologies) can increase the flexibility, efficiency and effective capacity of the existing transmission & distribution grid. Full potential deployment of these advanced grid solutions could unlock upwards of ~20-100 GW system capacity on the transmission and distribution system to support rising demand (based on individual technology potential; significant additional capacity is possible if advanced grid solutions are deployed in combination).6 This represents ~20-110% of the ~90 GW of additional peak demand that is expected to come online in the next decade under current trajectories according to NERC.
Enhancing existing grid capacity can help meet electricity demand by reducing curtailment of existing low-cost resources when transmission lines are constrained, enabling interconnection of new supply, and improving system efficiency. In several cases, given the 7-10+ year timeline to build new transmission, these ready-to-go advanced grid solutions – in combination with virtual power plants (VPPs) discussed below – may be some of the only options available to address near-term demand growth where transmission capacity is a primary constraint.
Liftoff Opportunity: More efficiently serve demand now with Virtual Power Plants
Accelerating deployment of commercially available energy efficiency, distributed energy resources (DERs), and VPPs can support demand growth by more efficiently balancing the timing of demand with available supply and leveraging distributed resources. VPPs are aggregations of DERs such as smart appliances, rooftop solar with batteries, EVs and chargers, and commercial and industrial loads that can provide grid services like a traditional power plant. A wide range of VPP configurations and applications to support demand growth are possible based on local operational dynamics. Most VPPs can be quickly deployed on the grid to meet near-term needs; more sophisticated VPPs (i.e., those that export power back to the grid and/or provide locational benefits) often require additional investments in distribution systems and grid control programs.
In recent years, 30-60 GW of dispatchable distributed capacity has been aggregated into VPPs nationally. By 2030, an additional 50-100 GW of VPP capacity could be added to the grid, with additional capacity potential possible by 2035.7 This could help meet more than 30-65% of the resources needed to serve peak demand by 2033 based on NERC’s latest industry outlook.