The POWER Podcast

• 181. A New Paradigm for Power Grid Operation

  Power grids operate like an intricate ballet of energy generation and consumption that must remain perfectly balanced at all times. The grid maintains a steady frequency (60 Hz in North America and 50 Hz in many other regions) by matching power generation to demand in real-time. Traditional power plants with large rotating turbines and generators play a crucial role in this balance through their mechanical inertia—the natural tendency of these massive spinning machines to resist changes in their rotational speed. This inertia acts as a natural stabilizer for the grid. When there’s a sudden change in power demand or generation, such as a large factory turning on or a generator failing, the rotational energy stored in these spinning masses automatically helps cushion the impact. The machines momentarily speed up or slow down slightly, giving grid operators precious seconds to respond and adjust other power sources. However, as we transition to renewable energy sources like solar and wind that don’t have this natural mechanical inertia, maintaining grid stability becomes more challenging. This is why grid operators are increasingly focusing on technologies like synthetic inertia from wind turbines, battery storage systems, and advanced control systems to replicate the stabilizing effects traditionally provided by conventional power plants. Alex Boyd, CEO of PSC, a global specialist consulting firm working in the areas of power systems and control systems engineering, believes the importance of inertia will lessen, and probably sooner than most people think. In fact, he suggested stability based on physical inertia will soon be the least-preferred approach. Boyd recognizes that his view, which was expressed while he was a guest on The POWER Podcast, is potentially controversial, but there is a sound basis behind his prediction. Power electronics-based systems utilize inverter-based resources, such as wind, solar, and batteries. These systems can detect and respond to frequency deviations almost instantaneously using fast frequency response mechanisms. This actually allows for much faster stabilization compared to mechanical inertia. Power electronics reduce the need for traditional inertia by enabling precise control of grid parameters like frequency and voltage. While they decrease the available physical inertia, they also decrease the amount of inertia required for stability through advanced control strategies. Virtual synchronous generators and advanced inverters can emulate inertia dynamically, offering tunable responses that adapt to grid conditions. For example, adaptive inertia schemes provide high initial inertia to absorb faults but reduce it over time to prevent oscillations. Power electronic systems address stability issues across a wide range of frequencies and timescales, including harmonic stability and voltage regulation. This is achieved through multi-timescale modeling and control techniques that are not possible with purely mechanical systems. Inverter-based resources allow for distributed coordination of grid services, such as frequency regulation and voltage support, enabling more decentralized grid operation compared to centralized inertia-centric systems. Power electronic systems are essential for grids with a high penetration of renewable energy sources, which lack inherent mechanical inertia. These systems ensure stability while facilitating the transition to low-carbon energy by emulating or replacing traditional generator functions. “I do foresee a time in the not-too-distant future where we’ll be thinking about how do we actually design a system so that we don’t need to be impacted so much by the physical inertia, because it’s preventing us from doing what we want to do,” said Boyd. “I think that time is coming. There will be a lot of challenges to overcome, and there’ll be a lot of learning that needs to be done, but I do think the time is coming.”

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• 180. Data Centers Consume 3% of Energy in Europe: Understand Geographic Hotspots and How AI Is Reshaping Demand

  The rapid rise of data centers has put many power industry demand forecasters on edge. Some predict the power-hungry nature of the facilities will quickly create problems for utilities and the grid. ICIS, a data analytics provider, calculates that in 2024, demand from data centers in Europe accounted for 96 TWh, or 3.1% of total power demand. “Now, you could say it’s not a lot—3%—it’s just a marginal size, but I’m going to spice it up a bit with two additional layers,” Matteo Mazzoni, director of Energy Analytics at ICIS, said as a guest on The POWER Podcast. “One is: that power demand is very consolidated in just a small subset of countries. So, five countries account of over 60% of that European power demand. And within those five countries, which are the usual suspects in terms of Germany, France, the UK, Ireland, and Netherlands, half of that consumption is located in the FLAP-D market, which sounds like a fancy new coffee, but in reality is just five big cities: Frankfurt, London, Amsterdam, Paris, and Dublin.” Predicting where and how data center demand will grow in the future is challenging, however, especially when looking out more than a few years. “What we’ve tried to do with our research is to divide it into two main time frames,” Mazzoni explained. “The next three to five years, where we see our forecast being relatively accurate because we looked at the development of new data centers, where they are being built, and all the information that are currently available. And, then, what might happen past 2030, which is a little bit more uncertain given how fast technology is developing and all that is happening on the AI [artificial intelligence] front.” Based on its research, ICIS expects European data center power demand to grow 75% by 2030, to 168 TWh. “It’s going to be a lot of the same,” Mazzoni predicted. “So, those big centers—those big cities—are still set to attract most of the additional data center consumption, but we see the emergence of also new interesting markets, like the Nordics and to a certain extent also southern Europe with Iberia [especially Spain] being an interesting market.” Yet, there is still a fair amount of uncertainty around demand projections. Advances in liquid cooling methods will likely reduce data center power usage. That’s because liquid cooling offers more efficient heat dissipation, which translates directly into lower electricity consumption. Additionally, there are opportunities for further improvement in power usage effectiveness (PUE), which is a widely used data center energy efficiency metric. At the global level, the average PUE has decreased from 2.5 in 2007 to a current average of 1.56, according to the ICIS report. However, new facilities consistently achieve a PUE of 1.3 and sometimes much better. Google, which has many state-of-the-art and highly efficient data centers, reported a global average PUE of 1.09 for its facilities over the last year. Said Mazzoni, “An expert in the field told us when we were doing our research, when tech moves out of the equation and you have energy engineers stepping in, you start to see that a lot of efficiency improvements will come, and demand will inevitably fall.” Thus, data center load growth projections should be taken with a grain of salt. “The forecast that we have beyond 2030 will need to be revised,” Mazzoni predicted. “If we look at the history of the past 20 years—all analysts and all forecasts around load growth—they all overshoot what eventually happened. The first time it happened when the internet arrived—there was obviously great expectations—and then EVs, electric vehicles, and then heat pumps. But if we look at, for example, last year—2024—European power demand was up by 1.3%, U.S. power demand was up by 1.8%, and probably weather was the main driver behind that growth.”

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• 179. District Energy Systems: The Invisible Giant of Urban Efficiency

  District energy systems employ a centralized facility to supply heating, cooling, and sometimes electricity for multiple buildings in an area through a largely underground, mostly unseen network of pipes. When district energy systems are utilized, individual buildings do not need their own boilers, chillers, and cooling towers. This offers a number of benefits to building owners and tenants. Among them are: • Energy Efficiency. Centralized heating/cooling is more efficient than individual building systems, reducing energy use by 30% to 50% in some cases. • Cost Savings. Lower operations and maintenance costs through economies of scale and reduced equipment needs per building. • Reduced Environmental Impacts. Emissions are lessened and renewable energy resources can often be more easily integrated. • Reliability. A more resilient energy supply is often provided, with redundant systems and professional operation. • Space Optimization. Buildings need less mechanical equipment, freeing up valuable space. The concept is far from new. In fact, Birdsill Holly is credited with deploying the U.S.’s first district energy system in Lockport, New York, in 1877, and many other cities incorporated district systems into their infrastructure soon thereafter. While district energy systems are particularly effective in dense urban areas, they’re also widely used at hospitals and at other large campuses around the world. “There’s over 600 operating district energy systems in the U.S., and that’s in cities, also on college and university campuses, healthcare, military bases, airports, pharma, even our sort of newer industries like Meta, Apple, Google, their campuses are utilizing district energy, because, frankly, there’s economies of scale,” Rob Thornton, president and CEO of the International District Energy Association (IDEA), said as a guest on The POWER Podcast. “District energy is actually quite ubiquitous,” said Thornton, noting that systems are common in Canada, throughout Europe, in the Middle East, and many other parts of the world. “But, you know, not that well-known. We’re not visible. Basically, the assets are largely underground, and so we don’t necessarily have the visibility opportunity of like wind turbines or solar panels,” he said. “So, we quietly do our work. But, I would guess that for the listeners of this podcast, if they went to a college or university in North America, I bet, eight out of 10 lived in a dorm that was supplied by a district heating system. So, it’s really a lot more common than people realize,” said Thornton.

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• 178. Why LVOE May Be a Better Decision-Making Tool Than LCOE for Power Companies

  Most POWER readers are probably familiar with levelized cost of energy (LCOE) and levelized value of energy (LVOE) as metrics used to help evaluate potential power plant investment options. LCOE measures the average net present cost of electricity generation over a facility’s lifetime. It includes capital costs, fuel costs, operation and maintenance (O&M) costs, financing costs, expected capacity factor, and project lifetime. Meanwhile, LVOE goes beyond LCOE by considering the actual value the power provides to the grid, including time of generation (peak vs. off-peak), location value, grid integration costs and benefits, contributions to system reliability, environmental attributes, and capacity value. Some of the key differences stem from the perspective and market context each provides. LCOE, for example, focuses on pure cost comparison between technologies, while LVOE evaluates actual worth to the power system. Notably, LCOE ignores when and where power is generated; whereas, LVOE accounts for temporal and locational value variations. Concerning system integration, LCOE treats all generation as equally valuable, while LVOE considers grid integration costs and system needs. “Things like levelized cost of energy or capacity factors are probably the wrong measure to use in many of these markets,” Karl Meeusen, director of Markets, Legislative, and Regulatory Policy with Wärtsilä North America, said as a guest on The POWER Podcast. “Instead, I think one of the better metrics to start looking at and using more deeply is what we call the levelized value of energy, and that’s really looking at what the prices at the location where you’re trying to build that resource are going to be.” Wärtsilä is a company headquartered in Finland that provides innovative technologies and lifecycle solutions for the marine and energy markets. Among its main offerings are reciprocating engines that can operate on a variety of fuels for use in electric power generating plants. Wärtsilä has modeled different power systems in almost 200 markets around the world. It says the data consistently shows that a small number of grid-balancing gas engines in a system can provide the balancing and flexibility to enable renewables to flourish—all while maintaining reliable, resilient, and affordable electricity. Meeusen noted that a lot of the models find engines offer greater value than other technologies on the system because of their flexibility, even though they may operate at lower capacity factors. Having the ability to turn on and off allows owners to capture high price intervals, where prices spike because of scarcity or ramp shortages, while avoiding negative prices by turning off as prices start to dip and drop lower. “That levelized value is one of the things that we think is really important going forward,” he said. “I think what a lot of models and planning scenarios miss when they look at something like LCOE—and they’re looking at a single resource added into the system—is how it fits within the system, and what does it do to the value of the rest of their portfolio?” Meeusen explained. “I call this: thinking about the cannibalistic costs. If I look at an LCOE with a capacity factor for a combined cycle resource, and don’t consider how that might impact or increase the curtailment of renewable energy—no cost renewable energy—I don’t really necessarily see the true cost of some of those larger, inflexible generators on the system. And, so, when we think about that, we really want to make sure that what we’re covering and capturing is the true value that a generator has in a portfolio, not just as a standalone resource.”

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• 177. How Nuclear Power Could Help Decarbonize Industrial Steam Needs

  Steam is used for a wide variety of critical processes across many industrial sectors. For example, pulp and paper facilities use steam to power paper machines, dry paper and wood products, and provide heat for chemical recovery processes. Steam is used by metal and mining companies, as well as in the food and beverage industry, petroleum refining, pharmaceutical manufacturing, textile production, and many other industrial processes. “About 20% of global carbon emissions come from the industrial heat sector, and virtually all of that industrial heat today is produced by burning hydrocarbons—coal and natural gas—and emitting carbon into the atmosphere,” Clay Sell, CEO of X-energy, said as a guest on The POWER Podcast. “With our technology, we have the opportunity to replace hydrocarbons and use nuclear-generated carbon-free steam to dramatically decarbonize these so-called hard-to-decarbonize sectors.” X-energy is a nuclear reactor and fuel design engineering company. It is developing Generation-IV high-temperature gas-cooled nuclear reactors and what’s known as TRISO-X fuel to power them. The company’s Xe-100 small modular reactor (SMR) is an 80-MWe reactor that can be scaled into a four-pack (320-MWe power plant) that can grow even larger as needed. “The most significant advantages that we have over large-scale traditional nuclear power plants is the evolution of our technology, our safety case, and the smaller, more simplified designs that can be built with much less time and much less money,” Sell said. “We’re a high-temperature gas-cooled reactor using a TRISO fuel form—that’s ceramic, encapsulated fuel in a round pebble that flows through the reactor like gumballs through a gumball machine.” The Xe-100 design’s intrinsic safety makes it especially unique. “This is a plant that cannot melt down under any scenario that one could imagine affecting the plant. So, that extraordinary safety case allows us to operate on a very small footprint,” said Sell. The simplified design has fewer subsystems and components, less concrete, less steel, and less equipment than traditional nuclear power plants. As noted previously, X-energy’s SMR is capable of producing high-quality steam, which is especially attractive for use in industrial processes. As such, Dow Inc., one of the world’s leading materials science companies, has agreed to deploy the first Xe-100 unit at its Union Carbide Corp. Seadrift Operations, a sprawling chemical materials manufacturing site in Seadrift, Calhoun County, Texas. “Our first project is going to be deployed in a public-private partnership with the U.S. government and Dow Inc., the large chemical manufacturer, at a site southwest of Houston, Texas, that will come online around the end of this decade,” Sell reported. Currently, X-energy is in the final stages of its design effort. Once complete, the next step will be to submit a construction permit application to the Nuclear Regulatory Commission (NRC). If all goes according to plan, the application should be approved by the NRC in early 2027, which would allow construction to start around that time. “We anticipate construction on the plant to be about a three- to three-and-a-half-year process, which will then bring it online in the early 2030s,” Sell explained. Beyond that, X-energy has an agreement to supply Amazon with 5 GW of new SMR projects (64 units) by 2039, starting with an initial four-unit 320-MWe Xe-100 plant with regional utility Energy Northwest in central Washington. Sell believes the deal positions X-energy to quickly apply lessons learned from its first-of-a-kind project with Dow, replicate and repeat the effort to achieve scale, and reach a favorable nth-of-a-kind cost structure faster than anyone else in the SMR market today. Said Sell, “When we imagine a future of a decarbonized economy with reliable power supporting dramatic growth at a reasonable cost, I believe X-energy is going to be a central technology to that future.”

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