Electricity demand from data centers is exploding. This surge has spurred an intense buildout of new generation capacity, as businesses and governments are seemingly scrambling for solutions.
In my recent report, Connecting Nuclear’s Past and Present: Guiding Missouri’s Future, one of the policy solutions I offer to meet electricity demand is consumer-regulated electricity (CRE). In short, CRE would allow for the creation of private energy entities, disconnected from utility grids, in order to serve the largest customers more efficiently.
A recent article on this topic caught my eye. The article mentions that delegates at the World Nuclear Association summit in London discussed forming private energy clusters, disconnected from the grid, to meet surging demand from data centers.
Doesn’t that sound familiar?
Bringing Energy Clusters (or CRE) to Missouri
A few weeks ago, New Hampshire’s governor signed into law House Bill 672, which allows for “off grid electricity providers”—independent and disconnected from the main grid—to generate, transmit, distribute, and sell electricity.
Whether you call it CRE, off-grid providers, or private energy clusters, the concept is similar: enabling private energy systems to serve large industrial customers with less delays, less red tape, and less pressure on the main grid and ratepayers.
Poland and the Netherlands are beginning to consider the use of energy clustering to meet industrial energy needs. The previously mentioned article identifies a few potential benefits from energy clustering:
- It would allow large customers to take their electricity from a co-located generation source
- If a thermal energy source like nuclear is used, large customers could use its industrial heat (high-temperature steam used in industrial processes like manufacturing)
- The energy developer would benefit from simplified project finance
- Both consumers and developers would avoid long transmission lines
- These clusters would also help reduce the burden on grid resources, which are at a premium in most markets and in Missouri
CRE gives large customers the option to use an energy source of their choice, so long as they meet the still-applicable regulations (such as the Clean Air Act for fossil-fuel plants).
As we have seen with the drastic actions of Meta, Microsoft, and Google, there is a market for this type of arrangement as these huge customers have sought connection to nuclear reactors. States and countries are taking notice of these market conditions and are bringing the free market into the energy sector.
Missouri needs to reduce pressure on the grid and attract investment. In the upcoming legislative session, lawmakers should seriously evaluate how CRE—or private energy clustering—could benefit consumers, energy developers, and ratepayers in our state.
Want to read more? Check out these related articles:
Connecting Nuclear’s Past and Present: Guiding Missouri’s Future
New Nuclear Energy: Business-Speed and Business Friendly
Mission Impossible and Nuclear Energy
One Way Missouri Could Keep its Grid Reliable
Weighing Consumer Regulated Electricity to Meet Energy Demand Growth
Missouri Needs to Be Prepared for Growing Energy Demand
