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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

California Public Utilities Commission Extends Self-Generation Incentive

LCG, March 5, 2002-The one-megawatt limit previously assigned to those receiving Self Generation Incentive money from California has been expanded.

Petitioned by Kawasaki regarding its Gas Turbine, the California Public Utilities Commission broadened the size requirements for its Self Generation Incentive program, which doles out $125 million per year to commercial and industrial electricity users.

The Self Generation Incentive Program, effective March of last year, funds customers of PG&E, California Edison, San Diego Gas & Electric, and Southern California Gas Co. in order that they may install wind turbines, fuel cells, internal combustion engines, and other devices, in addition to funding the use of renewable fuel. Previously limited to customers with 1.0-megawatt projects, the program now includes those who use up to 1.5 megawatts.

While maximum size of eligible parties has been increased to 1.5 megawatts, the project incentive will still be scaled according to the first megawatt. Additionally, unused Self Generation Incentive annual funds will now carry over into the following year, and the Corporate Parent Cap Size has expanded to 1.5 megawatts per single project.

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