Cooperatives discuss risks and opportunities for increased demand from artificial intelligence and data centers

The expected increase in U.S. energy demand from artificial intelligence, data centers and other sources will be a “growth engine” for electricity providers, but it will also pose significant risks to reliability, two energy cooperative leaders warned at a recent event on grid supply threats.

Northern Virginia is home to multiple data centers that have a “tremendous impact” on energy consumption, Northern Virginia Electric Cooperative President and CEO David Schleicher said during a June 5 virtual briefing on the “Deepening Electricity Crisis” hosted by the American Energy Association.

About six years ago, Manassas-based NOVEC was a 1,000-MW distribution cooperative, but since then its capacity has doubled and is on track to reach about 8,000 MW.

“This is our growth engine,” Schleicher explained.

But this expansion comes with big challenges. Schleicher noted that data centers can be built in 18 months, much faster than the four-year or longer lead time for some new substation equipment.

NOVEC draws power from the PJM interconnector, which relies heavily on regional gas and coal plants. However, state and federal policies are forcing a shift toward carbon-free resources.

“(We are) witnessing an influx of massive amounts of renewable energy from solar and offshore wind, which will be an integration challenge without new baseload generation,” Schleicher warned.

The Rayburn Electric Cooperative faces similar challenges.

The Rockwall, Texas-based generation and transmission cooperative is seeing organic annual demand growth of 10%, and the influx of data centers is forcing it to plan to “double or even triple our size,” says Rayburn President and CEO David A., Naylor said at a briefing .

In Rayburn’s case, all options are available to increase supply, but when “you look at what’s available to meet those needs… you’re guided by current technology,” Naylor said.

The cooperative went so far as to purchase a natural gas-fired plant last year, but “we need more resources to meet our current needs, not to mention … additional data centers and (other sources of demand),” he said.

In 2023, North American Electric Reliability Corp. in its long-term reliability assessment predicted a “material increase” in electricity demand – a change from previous forecasts of steady or moderate growth, NERC President and CEO Jim Robb said at the USEA event.

At the same time, the loss of many coal plants could deprive the grid not only of power but also of other services such as working reserves, bandwidth and voltage support, Robb said.

“As we retire any of these plants, we must remember that we must replace not only the energy … but also the reliability benefits they provide to the grid,” he said. “And that’s why we’re concerned about the loss of the traditional generation.”

Molly Christian is a staff writer at NRECA.