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The reality is that many factors are contributing to rising electricity rates, especially the rapid increases that households and businesses have experienced over the last five years. But the various studies have overlooked a key factor: the changing mix of generating resources, as traditional fossil-fuel and nuclear plants have been replaced by wind and solar ones.

Between 2010 and 2024, U.S. generating capacity increased by about 200,000 megawatts (MW), or just over 16%, from about 1.14 million MW to 1.33 million MW. Over that same period, electricity sales increased only by about 5%. Basic economics suggests that increasing supply more than demand tends to lower prices. But the opposite happened.

Here’s why. Fossil and nuclear plants are “dispatchable” electric generating resources; they operate on known schedules and, in some cases, can be controlled by electric grid operators to ensure that the electricity supply always exactly meets demand. While nuclear and most coal plants typically run continuously, 24 hours a day, many natural gas plants, by contrast, can be quickly switched on and off.

Wind and solar generation, however, are not dispatchable; they run intermittently, only when the sun shines and the wind blows. That’s a problem because grid operators cannot count on wind and solar being available when needed and, consequently, more back-up generation—usually natural gas plants—must be available to step in.

Between 2010 and 2024, over 80,000 MW of dispatchable generation was retired. Over that same period, wind and solar generation increased by about 240,000 MW. Over the next two years, another 20,000 MW of dispatchable generation will retire, replaced by more wind, solar, and battery storage.

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Originally posted by THG:
AI's Growing Energy Appetite: Can Innovation Make It Greener?
The energy consumption of AI is a growing concern, with data centers consuming 4.4% of U.S. electricity in 2023 and potentially tripling by 2028. This rapid expansion of AI's energy usage raises sustainability concerns, as it drives higher water usage, emissions, and e-waste. To address these issues, proactive solutions are needed, including streamlining AI models, developing greener infrastructure, and fostering collaboration across disciplines. Innovations in technology and policy can help ensure that AI continues to drive progress without significantly increasing its environmental footprint

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