US Energy Market Faces Data Center Boom, Fusion Breakthroughs & Offshore Wind Rollbacks

The digital revolution is fundamentally reshaping America's electrical grid, with data centers emerging as the dominant force driving unprecedented demand growth. American Electric Power's staggering forecast of 24 gigawatts of new load by 2030—18 gigawatts from data centers alone—signals a transformation that utilities across the country are scrambling to address. Their system, currently at 37 gigawatts, has received requests totaling a mind-boggling 190 gigawatts, highlighting the scale of potential growth.

A ray of hope emerges from Google's groundbreaking agreements with Indiana Michigan Power and Tennessee Valley Authority to curtail power consumption during peak demand periods. These first-of-their-kind commitments suggest AI loads might be more flexible than previously assumed, potentially reducing the massive infrastructure build-out otherwise required. As one executive aptly put it, utilities can either "raise the bridge" with new generation and transmission or "lower the river" by managing demand more intelligently.

Meanwhile, the energy innovation landscape continues evolving rapidly. Fusion startup Helion has broken ground on a facility to power Microsoft data centers by 2028, potentially delivering on fusion's long-deferred promise. In contrast, the current administration has rescinded all offshore wind energy areas, affecting over 3.5 million acres of federal waters. On the storage front, Peak Energy has deployed the first grid-scale sodium-ion battery system in the US, signaling potential diversification beyond lithium-ion technology. Together, these developments paint a picture of an energy sector in profound transition, balancing explosive demand growth with emerging technologies and evolving policy landscapes.

Curious about how these massive shifts in energy demand will affect your electricity bills and reliability? Subscribe now to stay informed on the technologies and policies shaping our energy future!

Chapters

• 0:00 AEP's Massive Data Center Load Growth
• 1:04 Google's Flexible Power Agreements
• 1:57 DTE's Data Center Expansion Plans
• 3:10 Coal Plant Retirement Complications
• 4:02 Helion's Fusion Energy Progress
• 4:55 Offshore Wind Areas Rescinded
• 5:54 Sodium-Ion Battery Breakthrough

Transcript

Speaker 1: 0:00

That's your Energy Stories for this, the first week of August 2025. Well, during its recent earnings call, american Electric Power's CEO says it anticipates its utilities will add 24 gigawatts of new demand by 2030, with 18 of that representing data centers. According to William Fairman, aep president and CEO, 13 gigs is in the Electric Reliability Council of Texas ERCart Market, with five of that being crypto load Nine gigawatts in PGM's interconnection and about two and a half gigawatts in the Southwest Power Pool. That PGM load includes about 3.7 gigawatts of data centers in Ohio and another 3.1 of data centers in Indiana Michigan Power Service Territory data centers in Indiana Michigan Power Service territory. Aep's utilities have fielded requests totaling 190 gigawatts of demand, a huge amount when compared to its current 37 gigawatt system.

Speaker 1: 0:53

Of course, not all that will materialize, but the conversations are certainly still taking place and some of that AEP load in Indiana Michigan Power's area will come from Google and it will be flexible. Google announced recently it has agreed with two utilities IMP and Tennessee Power Authority that it will dial back power consumption when needed during periods of high load on the grid. These are the first formal commitments to curtail AI machine learning loads by any of the large data center companies, and they offer the tantalizing promise that perhaps some of this load can be made much more flexible than has previously been assumed. That could also take pressure off the need for additional grid capacity. You can either raise the bridge by building new capacity generation and transmission assets, or perhaps you can lower the river by cutting demand during those periods of highest consumption on the grid. It'll be worth watching to see if more of these types of agreements get signed, especially as data centers increasingly push up against grid supply infrastructure limitations.

Speaker 1: 1:57

But wait, there's more data center load information. During its earning call, michigan Utility, dte's president says that is in quote. Advanced discussions unquote with data center hyperscalers for three plus gigawatts of load in its territory. These are companies that already have access to land, while also discussing an additional four gigawatts of potential load where data center developers are working to control real estate. The three gigs could be supplied by existing generation assets as well as new battery storage facilities to be built out next year. But further growth would be met with gas combined cycle generating assets. Tte plans to ink its first data center deal by the end of the year, although it notes that until that agreement is signed, it's unclear how quickly the load will ramp, and this lack of clarity around load ramps highlights once again how difficult it is to forecast how big these loads may be and when they will actually come online. The risk of getting that wrong can cost other ratepayers and consumers billions, as we just saw last week with PGM's record-setting capacity auction results for the 2026 season and forecasted future load that may or may not materialize during those dates. Dte may want to work on that data center flexibility approach in its own agreements.

Speaker 1: 3:16

Also in Michigan, a recent Department of Energy order requiring Consumers Energy's Michigan coal plant to continue running beyond its scheduled retirement date has cost the utility $29 million over just five weeks. According to Consumers' recent filing with the Securities Exchange Commission, the Department of Energy-directed Midwest grid operator MISO and Utility Consumers Energy to continue operating the JH Campbell plant, stating that closing it as scheduled would subject the grid to a risk of outages. Michigan's Democratic Attorney General as well as some environmental groups are litigating that issue. Meanwhile, the clock keeps running, the meter keeps running and everybody pays. The meter keeps running and everybody pays.

Speaker 1: 4:02

Fusion startup Helion has commenced work on an initial fusion generating plant in Washington State to supply data center load. The company is backed by Microsoft, which signed a contract in May for up to 50 megawatts of energy from the company. Helion says its goal is to deliver power by 2028, which would be well ahead of any competitors. Says its goal is to deliver power by 2028, which would be well ahead of any competitors. And Helion says its seventh generation prototype, called Polaris, will soon generate electricity through a fusion reaction. It's previously demonstrated that it could achieve 100 million degrees Celsius. The old joke has been that fusion is the power source of the future and always will be, but maybe in a few years that joke will finally prove to be lame. But as they say, there's many a slip, twixt cup and lip, and there's a lot that has to fall into place for fusion energy to prove itself as a new, cost-effective and reliable great resource.

Speaker 1: 4:55

The Trump administration's Ahab-like antipathy for offshore wind was demonstrated yet again last week with the Bureau of Ocean Energy Management announcing that it is rescinding all offshore designated wind energy areas, citing the DOE order ending preferential treatment for unreliable foreign controlled energy sources in Department decision-making an interesting title for that particular order and also citing the presidential memorandum of January 20th 2025, temporary withdrawal of all areas on the OCS from offshore wind leasing and review of the federal government's leasing and permitting practices for wind projects.

Speaker 1: 5:33

These wind energy areas were originally set up to highlight offshore areas most suitable for development of wind energy highlight offshore areas most suitable for development of wind energy and the move now affects over 3.5 million acres of previously designated areas and unleased federal waters in the Gulf of Mexico, gulf of Maine, the New York, bight, california, oregon and the Central Atlantic.

Speaker 1: 5:54

And finally, sodium-ion battery startup Peak Energy says it has shipped its first salt-based battery system at 3.5 megawatt hours to be used in a shared pilot project with nine utilities and independent power producers. The company hasn't designated who these actors are, but does say that this is the largest sodium ion phosphate, pyrophosphate NPPP battery system in the world and the first on the US grid. Peek says it's currently building out its first US cell factory, expecting to begin producing batteries by next year, and it's currently negotiating contracts with various offtakers. It has raised $55 million to date and appears to be besting its competitor, natron Energy, that last year had announced a $1.4 billion battery factory in North Carolina, but which appears to have run out of money. Sodium batteries have also made an appearance in China, both in low-end, low-cost intra-city vehicles, as well as the power grid, with various great installations happening last year. Well, that's all for this week. Thanks for watching and we'll see you again soon.