According to Bain, rising electricity demand within the US will outpace supply

Good morning and welcome back to Energy Source, I'm from New York.

Hurricane Milton hit the west coast of Florida overnight, marking the second major hurricane to hit the United States in two weeks. The storm comes because the Southeast remains to be reeling from Hurricane Helene, which killed greater than 225 people and devastated parts of the Appalachian Mountains.

Oil prices fell yesterday as worries about weak demand from China outweighed fears of an Israeli retaliation on Iran's oil infrastructure. Brent crude oil prices, the international benchmark, closed at $76.58 a barrel, and West Texas Intermediate, the U.S. market price, closed at $73.24 a barrel, the bottom closing price in every week.

The FT this morning published a brand new investigation into Russia's “shadow fleet” of oil tankers, examining how state-owned Lukoil was capable of finance the acquisition of vessels hide his involvement from the general public.

Today's Energy Source looks at a brand new report from Bain that predicts power shortages on account of the proliferation of knowledge centers, the backbone of our web economy and artificial intelligence.

Thanks for reading,

Amanda

Rising electricity demand within the U.S. driven by data centers is prone to outpace supply, Bain says

Bain warns that unprecedented electricity demand driven by the U.S. data center boom will outstrip supply later this decade.

The consulting firm estimates that utilities might want to increase their annual electricity generation by as much as 26 percent over 2023 levels by 2028 to satisfy rising electricity demand – excess of any increase in supply that the U.S. grid has experienced previously 20 years has achieved.

“This is an actual and emerging problem,” said Aaron Denman, head of Bain’s Americas utilities and renewable energy division, warning that the deficit “will put upward pressure on rates of interest that can likely exceed inflation.” .

Bain estimates that U.S. utilities will need $900 billion in additional revenue to take a position in latest energy sources, resulting in a 1 percent annual increase in customer bills through 2032 latest report.

The report is the most recent warning from energy consultants and researchers that rising electricity demand, driven by the proliferation of artificial intelligence data centers, shifting manufacturing and the transition to electrification, is driving up prices for ratepayers and risking a slowdown the energy transition will bring.

An ICF report last month projects that U.S. electricity demand will increase by a mean of 9 percent through 2028, resulting in an increase in wholesale electricity prices of as much as 19 percent. BloombergNEF recently lowered its forecasts for U.S. emissions reductions, predicting a slow transition due partly to rising electricity consumption.

A recent power auction by PJM Interconnection, which incorporates Loudon County, Virginia, the information center capital of the world, resulted in prices nearly 10 times higher than the last auction two years ago on account of tight supply.

“It's like constructing a brand new highway in a heavily congested area,” said Christopher Kalnin, chief executive of gas producer BKV, pointing to the brand new utility and transmission lines needed to handle data center load growth. “It’s incredibly expensive.”

The load increase comes after U.S. electricity demand remained nearly flat for 20 years. Bain expects data centers to account for 44 percent of total demand growth by 2028 as firms deal with developing the subsequent generation of AI.

Among its solutions, Bain recommends that utilities rethink traditional rate structures that place an undue burden on residents to upgrade host data centers. “We think that is untenable,” Denman said.

Data drill

Whether Donald Trump or Kamala Harris wins the White House in November will do little to alter the plans of US oil producers.

Former President Trump has put fossil fuels at the middle of his campaign, vowing to “drill, baby, drill” and roll back regulations imposed by the Biden administration. Harris, meanwhile, has touted record-breaking U.S. oil production during her time as vice chairman and stressed that she’s going to not ban fracking, a reversal from her position in 2019.

However, neither candidate will reverse the trajectory of U.S. shale oil, Rystad Energy says in a brand new evaluation, because the industry continues to prioritize shareholder returns and acquisitions for growth, a type of capital discipline already under Obama's administration. government began.

According to the research firm, U.S. shale oil production will grow steadily by 2.21 percent annually from 2025 to 2028, no matter which candidate becomes president.

“Ultimately, the industry is driven by market fundamentals, not politics,” said Matthew Bernstein, senior upstream research analyst at Rystad Energy.

Job moves

• Emma PinchbeckHead of the Chamber of Commerce Energy Britaintakes over Committee on Climate Change in November, as the federal government's climate policy watchdog prepares to set latest limits on greenhouse gas emissions.

• John Kerryformer US Secretary of State and climate envoy, has joined Galvanize climate solutions as co-managing director.

• Melissa Lott has gone Columbia University after five years where she worked as a professor on the Climate school and as a director on Center for Global Energy Policy.

• Anjali Acharya joins in The nature conservation as managing director in India after greater than 20 years with the World Bank.

• Verde clean fuels has appointed George Burdette as CFO. Burdette was most recently CFO of Arbor Renewable Gas.

Power Points

• Who and what drives oil prices?

• More than 100 CEOs, including the bosses of Ikea, Volvo and AstraZeneca, are urging governments to achieve this improve the business case for green investments.

• India is overhauling regulations to spice up its oil production because it tries to pump out as much crude as possible while there remains to be a market, its oil and gas minister says.