To meet the electricity demand expected from new data centers in the Northwest, stakeholders must collaborate to efficiently invest capital and explore controversial solutions like establishing a regional transmission organization, panelists said in a webinar hosted by the Northwest Power and Conservation Council on Dec. 11.
The companies building data centers have “extraordinarily” deep pockets, which means there are a lot of opportunities to fund large infrastructure projects on the backs of individual customers, according to Brian Janous, co-founder and chief commercial officer at Cloverleaf Infrastructure.
Companies already have showcased their willingness to fund energy infrastructure, Janous said.
Some recent examples include GE Vernova and ExxonMobil announcing new natural gas projects to meet data center demand. On Dec. 10, Google partnered with renewable energy developer Intersect Power and clean energy investor TPG Rise Climate to power the search giant’s data centers.
“The problem that we have is not that there’s not capital,” said Janous. “The problem we have is there’s not that many opportunities right now to invest that capital efficiently.”
Planners need to change their mentality around flexibility and speed to boost investments in power systems and other benefits data centers can bring to a region, Janous said.
Robert Cromwell, consultant and former vice president of power supply at the Umatilla Electric Cooperative, agreed.
“There is an enormous opportunity for the balancing authority areas or the transmission service providers to integrate operations with the data center campuses when they’re built,” Cromwell said.
But council member Douglas Grob questioned whether it’s possible to integrate data center customers at the speed they ask for, saying states are slowed by their own rules and court systems.
Cromwell said the answer “would be a regional transmission organization or an independent system operator where all the different balancing authorities in the West merge and you have a single entity that’s dispatching load and generation collectively.”
Cromwell said there’s growing recognition RTOs are a more efficient approach, “but it runs directly contrary to some of the core values within public power.”
“It’s something that just rubs a lot of people the wrong way, and you’ve just got to be honest about that,” Cromwell said. “But candidly, I’ve been working on these issues for a good chunk of my career, and I don’t see another path that will solve our problem.”
Sarah Smith, a research scientist with the federally funded Lawrence Berkeley National Laboratory, said there’s an opportunity to be creative, but it “will take some new ideas and new models.”
Smith noted the federal government is focused on speeding up new transmission by improving the permitting process and the interconnection queue, “both on the generation side and the load side.”
However, there are other avenues for regions to successfully attract data centers, which can be advantageous for local governments, Smith said. For example, data centers can repurpose old mining sites that already have power infrastructure in place, and “you wouldn’t have to reenter that interconnection queue,” Smith added.
Finding sites “where it’s more feasible to add that load in the short term” can provide regions a chance to offer those sites to data centers so that the “industry isn’t making requests that are really hard to meet when there might be other sites and options on the table,” Smith said.
The Northwest Power and Conservation Council hosted the webinar shortly after the WECC published a report that forecasts “staggering” growth in electricity demand in the Western Interconnection over the next decade.
The report predicts annual demand in the Western Interconnection will grow from 942 TWh in 2025 to 1,134 TWh in 2034. That 20.4% increase is more than four times the 4.5% growth rate from 2013 to 2022 and double the 9.6% growth forecast in 2022 resource plans.
