The grid's climate stress test

• They're raising questions about whether the electric grid can keep pace with surging demand from both climate change and the AI-driven electricity boom.

State of play: Heat waves create a double challenge by increasing electricity demand for air-conditioning while reducing the efficiency of some power plants.

Zoom in: Texas has become one of the nation's biggest proving grounds for grid modernization since the deadly 2021 winter storm exposed major weaknesses.

• The Electric Reliability Council of Texas, which operates most of the state's grid, has since handled record seasonal demand with the help of rapid battery expansion, mandatory weatherization, improved forecasting and expanded demand response.
• This month, the Public Utility Commission of Texas approved standards requiring large data centers to disconnect in a controlled way during grid disturbances to help protect grid stability.

Yes, but: ERCOT told state lawmakers that statewide electric demand will reach about 175,000 megawatts by 2032 — almost double the record number that was set this month.

Between the lines: "Texas has been enormously proactive" in building transmission and adding solar, wind and batteries, retired UC Berkeley electrical engineering professor Sascha von Meier tells Axios.

• But rapid growth in electricity demand from AI data centers is creating a new challenge, she says.
• Aidan Tuohy of the Electric Power Research Institute, a nonprofit energy research and development organization, says utilities are shifting from planning for a single peak hour to ensuring they have enough resources to remain reliable throughout prolonged periods of extreme heat.
• "There isn't one specific resource that's coming up and saving the day or anything like that," says Tuohy, EPRI's director of research and development. "It's a mix, and that diversity is actually a big part of the equation."

Zoom out: A growing number of U.S. utilities are linking home batteries, solar panels and EV chargers through software to virtual power plants that can supply electricity or reduce demand during periods of grid stress.

• "In California, we've had very positive experiences with battery storage and the way that it has performed during extreme peak demand days," von Meier says.

• She points to a California Independent System Operator study that called batteries "invaluable for reliability" after helping the state avoid rotating outages during a record 2022 heat wave.

Tuohy says utilities are increasingly looking at whether large data centers can become flexible grid resources rather than simply new sources of demand.

• Early results from an EPRI demonstration in Arizona showed a participating AI data center reduced electricity use by 25% over three hours during a simulated peak-demand event.

What we're watching: Von Meier expects that five years from now, electric grids will become more agile and flexible, out of necessity.

• "We may find it no longer realistic to accommodate unlimited demand at uniform reliability across entire interconnections at a reasonable price," she says.
• "Instead, we will value efficiency, flexible backup options, including storage, self-generation and microgrids, and more active management of electric demand. All the key technologies exist today."

The bottom line: Reliability "is going to be won or lost," Tuohy says. "It's not the individual components. It's how they all work together."

Go deeper: The power decisions that could shape the next century