Pacific Northwest power crunch starts with AI. The bigger challenge may come after

The Pacific Northwest region is embarking on its largest electricity grid expansion in decades, an effort projected to cost billions of dollars, driven by a historic surge in demand, primarily from data centers and future electrification of vehicles and buildings. The Northwest Power and Conservation Council, a key planning body for Washington, Oregon, Idaho, and Montana, recently released a draft plan outlining the need for 9 gigawatts of new renewable energy, 5 gigawatts of battery storage, and 2 gigawatts of natural gas generation over the next six years. However, the council acknowledges unprecedented uncertainty in load forecasts, with data center demand alone potentially varying between Seattle's average electricity use and five times that amount by 2046.

This wide range of potential demand creates a dilemma for utilities: building too little risks outages, while overbuilding could waste ratepayers' money. KC Golden, a Washington representative on the council, highlighted concerns that data centers, expected to connect earlier, might monopolize scarce grid infrastructure and "cheap renewables" before the slower, but more concentrated, energy demands from electric vehicles and heat pumps fully materialize. The council's draft plan aims for a "sweet spot" between high and low forecasts, with annual reassessments to adjust the course, emphasizing that "dialing back is probably easier than dialing up."

One significant challenge stems from the "peakiness" of future loads like heat pumps and EVs, which demand energy in concentrated bursts, unlike the relatively stable consumption of data centers. Arne Olson, a senior partner at energy consulting firm E3, noted that heat pumps, especially during cold winter peaks, will particularly drive the need for new gas "peakers." Utilities and state regulators are exploring measures to mitigate these peaks, such as incentivizing off-peak EV charging or even direct control of charging, and requiring data centers to reduce electricity use at certain times.

State lawmakers and utility regulators are also discussing ways to protect other customers from the costs associated with data center development. The council is currently accepting public comments on its Ninth Power Plan draft until October 16, with a final plan expected by year-end. The political landscape also presents differing views on the mix of energy resources needed, further complicating the planning process.