Conflicting Energy Demands and Policies Create Significant Future Challenges

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Two noteworthy articles highlight how conflicting energy requirements are posing significant challenges for regional and national energy providers and regulators. As discussed in these articles, the competing interests take the form of the practical, physical requirements driving the demand for energy versus the governmental and regulatory policies that aim to restrict (or promote) how that energy is provided. 

On the one hand, many states and regions throughout the nation are facing significantly increased electricity demand. For example, as outlined by the New York Post, PJM Interconnection reports a prospective increase in the region's energy requirements in 2040 by 8 percent to 18 percent above current demand levels. This means that the PJM region (encompassing parts or all of the states of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia) will need to obtain anywhere from 623 to 798 terawatt hours of incremental electric production to meet that increased demand. As noted in the article, this translates into increased annual energy production in PJM of between 76 percent and 100 percent over current levels.  

Driving this massive incremental demand for additional energy are a number of critical elements, both practical and political, including "additional clean energy requirements, aging thermal energy generation and the increase of electrical need due to the increase of electric vehicles, manufacturing facility needs and data centers." The governmental policies both promoting and requiring adoption of electric vehicles cannot be understated, as the move toward replacing internal combustion engine vehicles with EVs will alone place significant demand on electric grids in the next decade. 

On the other hand, national and state policies are also driving the country headlong into disfavoring, or outright eliminating, some of the proven technologies and fuel sources that can most effectively provide for the expanding demand for electricity. Of prominent current interest is the Biden administration's efforts to pursue, through the United States Environmental Protection Agency, the "Clean Power Plan 2.0," which, if implemented, could essentially require the shut-down of coal and natural gas-fired power plants through the imposition of aggressive new emissions requirements. As explained by the Tampa Free Press, this prospective regulation – a redux to President Obama's original, unsuccessful Clean Power Plan – is meeting with fierce opposition from U.S. senators from states, including West Virginia and Idaho, whose energy supply and economies, rely heavily on the "fossil fuel" industries. In addition to the "cascading effects on the broader economy, impacting industries and communities that rely on affordable and dependable energy," the opposition to the Clean Power Plan 2.0 also notes that efforts such as these to eliminate coal as a baseload source of energy production conflict with the ability of the electricity grid to maintain stability and meet the inexorable growing demands for energy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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