The White House’s farewell to an energy industry facing load growth

Last week, over 1,800 people who work in the energy and climate tech industries gathered in a cavernous convention center in Washington, DC. The second annual Deploy conference was, like the first, an opportunity to discuss how to get more clean energy out the door — even amid the complicated policy outlook under a second Trump administration in just over a month. 

On Wednesday, White House climate advisor Ali Zaidi delivered a farewell address to the industry that has been so integral to the Biden administration’s climate agenda. In it, he implored them to use load growth as an opportunity for partnership and cooperation, especially for the transformation of the grid.

And, in contrast to much of the messaging on load growth, Zaidi argued that current growth isn’t actually unprecedented. Rather, it was the 20-year period from 2000 to 2020 with flat load growth that was unique. 

“For almost every other decade, since the end of World War II until the turn of the 21st century, we've seen growth that's at this sort of scale,” Zaidi said. “And the way we have met that moment…is by making investments to our national grid, building out new connections that would better balance supply and demand, by improving the efficiency of everything from transmission to industrial processes, by investing in infrastructure, and doing the work of deploying technology solutions.”

Just a day later, the power sector consulting firm Grid Strategies released its latest load growth forecast, which put new numbers to the surge of electricity demand — and where it’s coming from. 

“The era of flat power demand is behind us,” the report opens. In just five years, the company’s five-year load growth forecast has swelled from 23 gigawatts to 128 GW — with 37 of those gigawatts forecasted in Texas alone. The researchers expect nationwide electricity demand to increase by 15.8% by 2029. 

“The main drivers are investment in data centers and manufacturing,” the report found. “High-end sector forecasts suggest current load forecasts may not have caught up with growth.”

This forecast discrepancy means that there is a large range in projections for load growth by the end of the decade. Some tech industry analysts expect 65 GW of growth from data centers, the researchers noted; utilities are more bullish, anticipating over 90 GW. Meanwhile, up to 20 GW of growth is expected from manufacturing, and another 20 GW is expected from electrification. 

To address that growth, Zaidi said, we must embrace three sets of tools: renewables, nuclear, and other sources of clean power; rewiring and grid-enhancing technologies; and repowering.

On the same day that Zaidi addressed Deploy, the Department of Treasury released final rules for the clean energy investment tax credit, which is typically valued at 30% of the project’s cost for qualifying clean energy installations. The rules extend through 2025, at which point they will switch to a tech-neutral approach through at least 2033. 

However, they are among the incentives that incoming president Donald Trump said he would like to dismantle — which outgoing Energy Secretary Jennifer Granholm called “political malpractice” in a closing speech at Deploy.

As Zaidi pointed out, these are valuable credits, designed to incentivize the development of energy to meet the moment of load growth. “We're looking — with all the tax credits applied, including the tech neutral ones finalized today — at something in the range of $12 to $16 a megawatt-hour,” he said. “That's a game changer, and that is a tool we have to harness.”

He is also bullish on grid-enhancing technologies, including dynamic line rating, advanced power flows, and topology optimization. In May, the White House launched a grid modernization effort to encourage the use of GETs, which involves coordinating state commitments to modernize their grids, with support from the Department of Energy. 

According to Zaidi, 60% of the country’s transmission and distribution lines are reaching end-of-life, but the use of GETs “can help us produce a lot more throughput capacity in places that are already permitted, already sited, already built out.”

Meanwhile, he added, repowering — meaning upgrading existing systems with advanced technology — is a way to “build behind existing power plants that aren't fully utilizing their interconnection,” and potentially reduce emissions at the same time.

Despite today’s political uncertainty, Zaidi sees the push for technology solutions to load growth as an opportunity for transformation. He cited as examples the nuclear deal between Constellation Energy and Microsoft to restart the Three Mile Island nuclear plant and Holtec International’s decision to restart the Palisades nuclear plant, as well as the creation of new tariffs such as Google’s clean transition tariff. 

“What's really exciting to me is the partnership approach that these technology firms have taken to tapping into what is hundreds of gigawatts of clean energy capacity,” Zaidi said. “AI and tech companies are not just a counterparty to our energy challenges and opportunities. They can be and are stepping up to become copilots in the solutions business of reducing the backlog of interconnection, of improving the functionality of the grid.”

And here Zaidi’s address took on the tenor of a graduation speech, dedicated to the energy industry. 

“You all have been our partners — not just as the dreamers, but as the builders and the deployers — where others saw nothing, or maybe nuisance,” he said. “Together, you have been our partners in deploying a new playbook for climate action in the United States, one that sees climate action not as just a crisis but an opportunity for uplift.”

This narrative, of crisis as “opportunity,” echoes the Biden administration’s favorite narrative of the energy transition as a chance to create good-paying jobs and economic growth. Zaidi described the massive investment in the transition, enabled by Congress’ passage of the Inflation Reduction Act and other legislation, as “a good bet” over the last four years.

“And the note I'll leave you with is — with the fullest of confidence, having stood in this very same room with Republican governors and members of other parties, with the private sector, with labor unions, all of whom have gathered over the last four years to endorse this concept — that this is in the interest of the United States of America,” Zaidi said.