USA – WASHINGTON Trends and Developments Contributed by: John Pierce and Patrick Njeim, Kilpatrick Townsend & Stockton
BESS – promising, but not yet a replacement for gas Battery energy storage systems (BESS), such as those using lithium-ion or newer chemistries like iron flow or sodium-ion, are being widely deployed to store excess renewable energy and release it during periods of low generation or high demand. However, today’s commercial BESS installations generally provide between two and six hours of discharge capacity, with utility-scale projects sometimes reaching eight hours or more. While this duration is sufficient for short-term frequency regulation and load shifting, it falls short of the multi-day reliability required during extended periods of low renew- able output or severe weather events. Moreover, the cost and material constraints of large-scale battery systems (including lithium, cobalt and nickel) limit how quickly and widely they can be deployed as a full substitute for fossil-fuel backup. Natural gas – the current backbone of grid reliability Owing to the aforementioned limitations, natu- ral gas remains the most practical and respon- sive firm power source in most US grids. Gas turbines and combined-cycle plants can be ramped up quickly to meet spikes in demand, making them essential for filling the gaps left by renewables. This flexibility is especially crucial in regions with high data centre concentrations, where load increases may be sudden and sub- stantial. In many states, peaker plants (gas-fired facilities designed to operate during periods of peak electricity use) are still the last line of defence against brownouts and blackouts. They are also relatively cost-effective compared to the capital-intensive and longer-developing alterna- tives such as nuclear or pumped hydro.
Nuclear and hydropower – stable, but regionally limited Nuclear energy and large hydroelectric systems also play critical roles in providing baseload, carbon-free electricity. However, their scalabil- ity is highly constrained because nuclear plants are politically and economically controversial. While they offer excellent reliability and zero car- bon emissions, public opposition, high upfront costs, regulatory complexity and long construc- tion timelines (ten or more years) have stymied new development in most of the country. Small modular reactors (SMRs) offer future potential, but they are still in pilot stages and years away from commercial readiness. Hydropower is also developed out in many regions. Grid integration challenges Even as renewable generation expands, the lack of adequate grid infrastructure to integrate and deliver their output – especially over long dis- tances – is another limiting factor. Many renew- able projects are in remote areas, far from urban demand centres and hyperscale data facilities. Without major investments in long-distance transmission lines, this clean energy cannot be effectively utilised where it is needed most. Moreover, energy storage, demand response and distributed energy resources (DERs) still require further integration and regulatory stand- ardisation to contribute meaningfully to grid sta- bility on a national scale. Federal and State Policy Responses and Regulatory Developments Recognising the magnitude of the issue, the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) are actively working to develop policies that: • incentivise clean energy deployment to meet the needs of AI and other data centres;
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