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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 Leads to ISO Alert for California

LCG, May 30, 2003--Power demand in California surpassed forecasts easily on Wednesday, due to high temperatures that required an estimated weather-related 3,800 megawatts over expected load, and another 700 megawatts more because of forecast error and a lack of conservation.

The Independent System Operator, which operates the state's power grid, issued a Stage 1 power alert lasting from 3 P.M. to 6 P.M. A Stage 1 emergency is called when generation reserves drop below 7 percent. Power consumers are asked to cut back on use of heavy appliances at such times, although air conditioners were active in both Northern and Southern California.

Jim McIntosh, the head of grid operations, was quoted in the Sacramento Bee: "I don't think we saw much of any conservation yesterday." The approaching summer is expected to be warmer than usual, and could be marked by frequent alerts if conservation is minor, or if the demand patterns signal permanent underlying load growth, not just the effects of Wednesday's sudden bout of warm weather.
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