Shift Key with Robinson Meyer and Jesse Jenkins Why We’re Worried About Electricity Prices
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Jul 30, 2025 The discussion revolves around the impending surge in electricity demand in the U.S., reminiscent of the 1970s. Key topics include the impact of political decisions on renewable energy financing, particularly the repeal of tax credits. They explore how rapid increases in natural gas exports and supply chain issues could drive electricity prices up. Insights from recent market auctions reveal potential crises in electricity affordability, affecting both consumers and the economy. Additionally, there's a look at the strategic importance of electricity in AI and manufacturing.
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Electricity Demand's Historic Rebound
- U.S. electricity demand is growing for the first time in 20 years due to factors like electrification and AI data centers.
- This resurgence in demand signifies a historic return to sustained growth not seen since the 1970s.
Supply Constraints Amid Demand Surge
- Electricity supply is tightly constrained by a backlog in gas turbine manufacturing and rising natural gas demand from LNG exports.
- North America’s LNG export capacity is expected to double by 2028, straining natural gas supplies and infrastructure.
Natural Gas Supply Challenges
- U.S. natural gas production faces rising costs and limited investment amid increased LNG exports.
- A lag in supply response can cause price spikes, increasing electricity costs tied to natural gas.