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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

Read more

Industry News

Heat Returns to Pressure State Power Reserves

LCG, Sept. 18, 2000--The California Independent System Operator was facing another day of thin reserve power supply margins today with a forecast peak demand of nearly 44,000 megawatts, as another heat wave moved in on the state over the weekend.

At dusk yesterday evening, the temperature in Palo Alto was 90, and that was on our front porch.

For today, a heat advisory was issued a 3:30 a.m. for the entire San Francisco and Monterey Bay Areas with highs predicted in the 90s at the beaches and as high as 110 inland. Record highs were expected to continue into tomorrow.

For Los Angeles, highs were predicted from the mid to upper 70s near the coast to the high 80s inland. In San Diego, where high temperatures have meant high electric bills and short tempers, it was expected to be in the 70s near the ocean and in the 90s inland.

California's Central Valley will sizzle this afternoon, with temperatures reaching 107 at Redding in the north and 102 in Bakersfield in the south. At Sacramento, the state capital, highs today were forecast at 105.

Temperatures in all of these places are expected to be two or three degrees higher tomorrow and Cal-ISO is guessing that it will need about 45,000 megawatts to serve peak demand, with nothing in reserve.

At 9:30 a.m. Pacific Time today, Cal-ISO issued a "power watch" bulletin, which it said was the first of several expected this week.

At 11:00 a.m. this morning, it was 84 degrees on our front porch and the sun hadn't hit that side of the house as yet.

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