Expert forecasts need for 146,000 Mw in capacity

If recent forecasts for huge upticks in internet and computer usage are correct, the electricity grid in the US could be headed for a disaster. One analyst is estimating the US needs to add about 146,000 Mw of new capacity to restore capacity margins to 15%.

�Online populations are expected to nearly double in the next few years for both business and home usage,� financial analyst Fred Schultz writes in a Raymond James & Associates report. High tech pundits say that by 2002 nearly 50 million business users will regularly use the internet. That�s about double the 25.4 million users of 1998.

�Just look behind a desk today and you will find a power strip with six to eight plugs attached these days,� says Schultz.

Computers and all those peripherals used for internet access use electricity and lots of it. The share of electricity consumed in the US that is used by computers was about 8% in 1998, about 15% today, and will reach 25% by the end of the decade, says Schultz. But yet the average reserves in electricity capacity have fallen to 20-year lows of less than 15%.

Schultz says that all this computer use to get to the internet is stimulating demand growth for electricity. Given the steady increase in gross domestic product, add to it the explosion of technology and internet- related use, and electric demand is forecast to increase by a robust 3% a year.

He also argues that residential demand for electricity is starting to increase much more rapidly again after a long period of stagnation. Besides the growth of computer use, homes on average have increased in gross square footage and air conditioning is almost standard in the newer bigger houses. Geographically, air conditioning is now more commonly relied upon in areas of the country like the Midwest, Great Lakes region, and Northeast than before.

Internet impact
The internet's impact as a new source of electricity demand can hardly be over stated. The number of page creations on the internet have exploded requiring more servers. There are 2.1 million web pages on the internet right now and about 7.3 million new pages are added every day.

The internet is about to double in size again next year. A server or web server is basically the computer program that serves requested HTML pages or files. To improve security and efficiency of the servers internet service providers have been building farms for servers that companies buy or lease space in.

To get an idea of how much these farms have grown, Yahoo started with two servers in 1995. Now it requires 70 servers. The server farms use about 100 w/sq ft. There are about 7-9 million sq ft of server farms in the US, and that number is expected to triple to an estimated 23�25 million sq ft this year.

As demand for floor space explodes to accommodate server growth, electric power consumption will also. But the supply of electricity has not kept up with this demand. Skyrocketing summer peak prices and reliability problems are now common throughout the nation.

Capacity reserve margins have been declining for the last 20 years (capacity margin is the difference between the available generating capacity during peak summer conditions and the actual peak load). Average capacity margins were up to almost 29% in 1982, but today it�s less than half of that.

At 3% demand growth, the US needs an incremental 24,000 Mw/year, says Raymond James. That will require building power plants on a scale never before attempted.

From 1999 through 2003 about 160,000 Mw of gas-fired generation have been announced, according to calculations by Raymond James, but industry experts say it's hard to say how much will actually get built.

�The already-strained electric power grid is about to be bombarded with demand the likes of which it has never seen,� says Schultz in the report. �As a country we have two options�build power plants and work on commercialization of distributed generation�or start getting used to reading by candle light.�

Related Articles

Lukoil lets contract for Uzbekistan gas processing plant

02/13/2015 Russia’s OAO Lukoil has let a contract to a consortium headed by South Korea’s Hyundai Engineering Co. Ltd., Seoul, for the construction of its lon...

Capacity expansion planned for proposed Ohio GTL plant

01/19/2015 Ashtabula Energy LLC, Ashtabula, Ohio, a subsidiary of Velocys PLC, Houston, is seeking approval to build a grassroots gas-to-liquids plant that wo...

Gazprom Neft reviews progress on refinery modernization efforts

01/19/2015 The second phase of JSC Gazprom Neft's program to modernize and upgrade its Russian refineries to improve processing capacities, oil conversion rat...

Kazakhstan advances refinery modernization program

01/19/2015 Kazakhstan's state-owned KazMunaiGas (KMG) has secured financing from the Development Bank of Kazakhstan JSC (DBK) for the continuing modernization...

Start-up continues at Abreu e Lima refinery

01/12/2015 Petroleo Brasileiro SA (Petrobras) has initiated the start-up of furnaces in the atmospheric distillation unit at its Abreu e Lima refinery (Rnest)...

Legislative vote delays St. Croix refinery sale

12/01/2014 The Senate of the 30th Legislature of the US Virgin Islands has voted unanimously to send back a proposed agreement that would provide for the rest...

Buyer emerges for shuttered St. Croix refinery

11/17/2014 Hovensa LLC, the joint venture of Hess Corp. and Petroleos de Venezuela SA (PDVSA), has found a buyer that hopes to restart its idled 500,000-b/d r...

Lone Star begins construction on third Mont Belvieu frac unit

11/06/2014 Lone Star NGL LLC, a joint venture of Energy Transfer Partners LP (70%) and Regency Energy Partners LP (30%), both of Dallas, has begun constructio...

Aux Sable to expand Illinois plant’s fractionation capacity

11/04/2014 Aux Sable Liquid Products LP, Calgary, will expand fractionation capacity at its Channahon, Ill., natural gas plant by 24,500 b/d, the company said...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected