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Georgia is currently experiencing a thriving economy, with an influx of high-tech data centers and manufacturers attracted by tax incentives. State officials are enthusiastically embracing this trend and highlighting its positive impact.
Governor Brian Kemp proudly declared earlier this year that our communities have witnessed the arrival of over 171,000 new jobs and a staggering $74.5 billion in investments to the state.
However, this rapid growth has led to a concerning issue: the increasing demand for electricity from these new businesses.
Georgia Power, the largest electric utility in the state, has recently announced a pressing need for a substantial increase in energy supply. To meet the surge in demand, the company is seeking to purchase and generate additional electricity. Their proposed solution involves leveraging solar power combined with battery storage, but it heavily relies on the use of fossil fuels. This includes the integration of three new turbines, which will be powered by oil and natural gas.
Customers and clean energy advocates are expressing their strong opposition to this plan. The public comment sections of hearings over Georgia Power’s request have been flooded with voices from large groups of students and medical professionals, all urging the state’s Public Service Commission to reject it.
“Fossil fuels are deadly. They not only harm our ecosystems and endanger human lives, but most critically, they pose a threat to the well-being of future generations,” emphasized Dakota Tauteeq, a student at Emory University, during a meeting with the commissioners.
All across the country, we are witnessing a similar scenario unfold. After years of stagnation, there is a surge in the demand for power. This can be attributed to the rise of data centers, which are essential for various purposes such as managing emails, storing digital medical records, and facilitating artificial intelligence and cryptocurrency operations. Moreover, the federal government’s emphasis on promoting domestic manufacturing through policies favoring American-made electric vehicles, solar panels, and other technological advancements has led to a resurgence in the manufacturing sector. Furthermore, the global push to move away from fossil fuels has prompted individuals to shift from gas-powered vehicles and appliances to their electric counterparts.
The Biden administration’s climate policy is currently facing a significant challenge: finding ways to make renewable energy more affordable and appealing to utilities, thereby encouraging them to shift away from fossil fuels that contribute to climate change.
The Inflation Reduction Act, which was passed in 2022, offers $125 billion in tax credits to electric companies that opt for wind, solar, and battery storage. The aim is to provide an incentive that would encourage utilities to prioritize renewable energy sources over fossil fuels when generating electricity.
Sierra Club analyst Noah Ver Beek described the legislation as a significant opportunity for companies to tap into a massive pool of funds. He emphasized the potential for them to benefit from millions of dollars available through this game-changing piece of legislation.
Many utilities, like Georgia Power, are still eager to expand their fossil fuel plants or construct new ones, despite the vast amount of funding available.
Ver Beek and his team analyzed the energy plans of 50 utilities that have been submitted or updated since the law was enacted. Their research revealed that approximately one-third of these plans completely overlooked the new clean energy provisions. Moreover, even among those plans that did incorporate these provisions, many failed to fully consider the potential benefits of the incentives. For instance, a significant number of utilities neglected to account for the additional bonuses offered by the IRA for projects situated in communities impacted by the fossil fuel industry, providing competitive wages, or utilizing domestically manufactured technology.
Ver Beek criticized the utilities for their lack of ambition, stating that they are leaving a significant amount of money on the table by not taking advantage of the opportunity to save an additional 10 percent on project costs.
Even though Georgia Power has announced its intention to pursue tax credits for clean energy projects, it continues to rely on fossil fuels as well.
The tax credits are facing a challenge due to the increase in energy demand across the country. According to Bank of America utilities analyst Julian Dumoulin Smith, utilities are resorting to their traditional solution of relying on fossil fuels in response to this high demand.
According to him, there is an increasing trend towards the reversion to gas plants, primarily to provide reliable support for the grid.
According to him, the concept is not to operate new gas plants continuously, but rather to activate them during peak energy demand periods. This typically occurs during extreme weather conditions such as very hot or cold temperatures, when people tend to use their air conditioning or heaters more frequently.
Utilities plan their power generation based on peak hours rather than the average power usage. This approach, known as a “peaker plant,” ensures that utilities can meet the highest demand without causing blackouts. Fossil fuel plants are often seen as the most reliable option for meeting peak demand quickly.
Shelley Robbins, who is involved in the Phase Out Peakers project for the nonprofit Clean Energy Group, disagrees with the notion that this is no longer the case.
“The great thing is, there are now other options,” she mentioned.
Running the grid in a more creative manner, rather than simply generating power and delivering it to meet demand, is a more intricate process than toggling a switch at a power plant. These alternative options necessitate utilities to think outside the box and find innovative ways to manage the grid.
Electric companies have the ability to incentivize individuals for reducing their energy usage during peak demand hours, a strategy commonly referred to as demand response. Moreover, they can enhance power lines to accommodate higher electricity loads, a process known as reconductoring. Additionally, utilities can assist in the installation of solar panels with battery backup in numerous households and businesses. By doing so, they can tap into the stored power in these batteries during times of increased demand, forming what is known as a virtual power plant.
Different utilities across the country have tested and demonstrated the effectiveness of these approaches.
According to Robbins, the individuals responsible for approving utility plans and setting state energy policies often rely on experts for guidance when making decisions about intricate matters like this. However, the trusted experts they typically consult are still predominantly from the fossil fuel industry.
She expressed her belief that the fossil fuel industry still holds influence over legislators and utility regulators, convincing them that it is the only viable solution. However, she emphasized that this is a misconception and not grounded in truth.
Robbins emphasizes the importance of educating regulators, lawmakers, and utilities about these alternative energy sources. It is crucial that they understand that these alternatives have become reliable solutions to meet the increasing energy demand. The future of U.S. climate policy and efforts to reduce planet-warming emissions relies on successfully transitioning to these sustainable options.
During the Georgia hearings, Andy Posner, the CEO of Capital Good Fund, a nonprofit organization dedicated to addressing climate change, provided his testimony.
Georgia Power should be directed by the commission to create and submit a plan that will accelerate the process of connecting and testing solar energy and storage systems owned by customers.
In simpler terms, this means that there will be an increase in the installation of solar panels on both residential and commercial buildings, along with the addition of batteries to store the generated energy.
Rooftop solar has the potential to serve a dual purpose beyond just helping homeowners save money and reduce their carbon footprint. It can also act as a backup for the energy grid. For instance, during periods of high power demand, such as hot days when everyone is using their air conditioning to the maximum, the utility can rely on the collective energy stored in individual customers’ batteries to fill any gaps in the grid’s power supply.
One option being considered is the addition of alternative energy sources instead of relying solely on fossil fuels. For instance, expanding transmission lines to accommodate larger amounts of electricity at once is being proposed. Additionally, incentive programs aimed at reducing energy demand during peak times are being suggested.
