US Grid Strain, Possible Allete Sale

Allen discusses the strain on America’s largest power grid due to data center demand, Taiwan’s $3 billion wind farm project, the potential sale of Allete and new data center regulations in Ohio.

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America’s largest power grid is under serious strain. Data centers and AI chatbots are using electricity faster than new power plants can be built.

PJM Interconnection covers thirteen states from Illinois to Tennessee and Virginia to New Jersey. The company serves sixty seven million customers. This summer, electricity bills could jump more than twenty percent in some areas.

The region has the most data centers in the world. Pennsylvania Governor Josh Shapiro is threatening to pull his state out of the grid entirely. Recently, PJM’s CEO has announced he’s leaving and PJM Board members have been voted out.

PJM spokesman Jeffrey Shields says the problem is simple economics. “Prices will remain high as long as demand growth is outstripping supply. Right now, we need every megawatt we can get.”

The grid lost more than five point six gigawatts in the last decade. Old power plants shut down faster than new ones come online. Meanwhile, data center demand keeps growing. By twenty thirty, PJM expects thirty two gigawatts of increased demand. Almost all of that will come from data centers.

Ørsted has secured three billion dollars in financing for a major wind farm project in Taiwan.

The Greater Changhua Two project will supply clean energy to over one million households once it’s fully operational. The wind farm sits thirty to thirty seven miles off Taiwan’s coast.

Taiwan wants twenty percent of its electricity to come from renewable sources by twenty twenty five. This project is a critical step toward that goal.

Ørsted plans to sell part of its ownership stake after the project is completed. This strategy lets the company recycle money into new projects while keeping operational control.

Allete is one step closer to being sold. The Minnesota Department of Commerce has withdrawn its opposition to the six point two billion dollar deal.

Canada Pension Plan Investment Board and Global Infrastructure Partners want to buy the company. Allete runs Minnesota Power and Superior Water, Light and Power of Wisconsin.

The sale still needs approval from the Minnesota Public Utilities Commission. That’s the last hurdle before the deal can close.

The new owners have agreed to several customer protections. They’ll freeze rates for one year and reduce the company’s allowed profit margin. They’ve also promised fifty million dollars in additional clean energy investments.

AEP Ohio has won approval for new rules that protect customers from data center costs.

The Public Utilities Commission of Ohio approved the plan on July ninth. Large data centers will now have to pay for at least eighty five percent of the electricity they sign up for, even if they use less.

AEP Ohio President Marc Reitter says the rules align data center demand with infrastructure costs. “This infrastructure will support Ohio’s growing tech sector and help secure America’s data storage facilities here in the U.S.”

The requirements will last twelve years, including a four year ramp up period. Data center owners must also prove they’re financially able to meet their obligations.

RWE has extended CEO Markus Krebber’s contract until twenty thirty one. The early extension adds another five years to his current agreement.

Krebber has led the German energy company since twenty twenty one. He joined the company in twenty twelve and became an Executive Board member in twenty sixteen. The Supervisory Board praised his leadership during the energy crisis and his work positioning the company for future growth.

That’s this week’s top news stories, join us tomorrow for the Uptime Wind Energy podcast.