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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

City of Austin Approves PPA for Texas Biomass Plant

LCG, August 29, 2008--The Austin City Council yesterday approved a 20-year, power purchase agreement (PPA) with Nacogdoches Power LLC for the electricity generated from a 100-MW facility fueled with biomass. The proposed facility is scheduled to commence operations in 2012.

The project, located in northwestern Nacogdoches County, will use a variety of wood wastes, including residues from forests and sawmills, as well as waste pallets and municipal wood waste. The facility will use a bubbling fluidized bed boiler to directly combust the wood wastes, together with a steam turbine for power generation. With respect to air emissions, the design includes a baghouse to control particulate emissions and a Selective Non-Catalytic Reduction (SNCR) system for NOx control. With respect to carbon emissions, biomass power generation is deemed carbon neutral.

Unlike wind and solar renewable resources that generate power only when the wind blows or the sun shines, the hour-to-hour generation from a biomass facility can be dispatched by the operator to meet changing load and market conditions.

Gainesville Regional Utilities (GRU) is discussing a similar project with Nacogdoches Power LLC that could be constructed at the existing Deerhaven Generating Station near Gainesville, Florida.

Earlier this week, Georgia Power submitted a request to the Georgia Public Service Commission for approval to convert an aging, coal-fired unit at its Mitchell Generating Plant in Georgia to use wood wastes. The modified unit would use a direct-fire, stoker technology for a design capacity of 96 MW.

These three projects show a rising interest in developing large-scale, electric generating facilities that are reliant solely upon biomass as the fuel.
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