The U.S. economy is in grave danger of running out of power. After a decade of mostly flat demand, electricity demand is predicted to grow by 80% by 2034. The Biden administration and the electric grid are completely unprepared. The dramatic increase in demand is being driven by both politics and the market. The market is doing what it’s supposed to—responding appropriately to demand signals—but Joe Biden’s administration is asleep at the wheel on how to respond.
AI, or artificial intelligence, is a significant explanation for why the electricity demand is exploding. The acceleration in computing, powered by semiconductors, requires numerous multiples of additional power than antiquated data centers. The major U.S. tech companies are aggressively investing in new centers for data. AI is expected to increase the American economy’s productivity and accelerate growth significantly; however, AI requires substantial power.
Another major cause of the increase in electricity demand is the Biden administration’s dogged pursuit of a green economy. Although the illogically named Inflation Reduction Act, the administration is providing $1.2 trillion in subsidies to revamp the U.S. economy from carbon-based electricity to green energy. However, the Biden administration is blind to how much electricity is needed for a green economy.
Companies in the U.S. are in the process of building or expanding to more than 155 factories to provide clean technologies like electric car batteries and solar panels. These factories depend on electricity, and electric vehicles don’t use gas. Each facility that utilizes semiconductor fabrication subsidized by the CHIPS and Science Act uses as much energy as an average medium-sized town.
The Biden administration is spending more than $7 billion in subsidies for green hydrogen. Scientists are adamant the world can’t go completely green without green hydrogen, but Joe Biden’s administration isn’t making provisions for the power needed to produce it. A green hydrogen economy would require a fourfold increase in onshore wind power, an eightfold increase in solar power utilities, or a twelvefold increase in offshore wind power.
It won’t happen in the United States because allowing reform isn’t politically achievable. Building a new electricity transmission system takes a decade or more.
To put it bluntly, politics makes it impossible for America to supply the electricity needed for a green hydrogen economy. While some local economies may successfully transition to a world of AI with a low carbon footprint, many local economies will not be able to. Jurisdictions welcoming nuclear power plants and natural gas facilities will succeed.
Take a look at North Carolina — they are ahead of the pack. The state economy is powered by Duke Energy. On January 31, the company filed to build three small modular nuclear reactors and construct a new natural gas plant, and Duke proposes adding additional wind and solar power. As a result, North Carolina will have a dynamic economy.
Nonetheless, an essential point persists: to meet the unexpectedly significant increase in electricity demand, a combination of nuclear and gas power and some green power will be needed. The public demands economic prosperity and growth. A completely green economy is a daydream promoted by the far left, who are baffled about economics and the ‘wants’ and ‘needs’ of the U.S. public.
