Utilities need to become project developers. Are they ready?
Utility Dive · Chris Warren ·
Load growth is surging 50x faster than before. Can utilities scale fast enough to meet demand?
Load growth is no longer an abstract number in an electricity market report or forecast; it’s a reality. According to the U.S. Energy Information Administration (EIA), U.S. electricity load will increase nearly 2 percent in 2026 and 2.5 percent next year, driven by large loads like data centers and manufacturing as well as increased electrification of transportation and building heating and cooling. To put that number in perspective, annual load growth between 2005 and 2019 was about 0.1 percent, meaning the next two years will see nearly 50 times the growth that the industry experienced in the last 15 years.
Rapid load growth changes nearly everything for utilities, from how they plan and invest to how they engage and communicate with customers. Load growth is also compelling many utilities to do something they haven’t done at this scale and pace before: develop their own generation. “Utilities are used to designing and building a gas plant once every five or 10 years, and then they would contract via PPAs (power purchase agreement) everything else,” said Alex Pope, Manager of Power Development Portfolios 1898 & Co. “But the systems utilities have in place to self-develop generation projects were never built to handle the volume necessary to meet the demand and timelines of today’s customer needs.”
Building from scratch is hard
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