The Sconi

Life in Wisconsin is projected to become increasingly reliant on electricity in the coming years. This shift raises concerns about potential electricity shortages.

A significant development contributing to this increased demand is Microsoft's planned data center in Mount Pleasant, near Racine. The facility, notable for its focus on artificial intelligence, promises job creation and economic growth but also requires substantial electricity. Data centers are known for their high energy consumption, with AI operations demanding approximately ten times more power than conventional searches.

The Midcontinent Independent System Operator (MISO), responsible for managing electricity distribution across much of the Midwest, recently warned of a looming shortfall. MISO estimates that the region could face a deficit of up to 3,700 megawatts (MW) next summer, potentially escalating to 14,000 MW by the decade's end. For context, Wisconsin's Point Beach Nuclear Plant generates 1,200 MW.

This anticipated shortfall stems from several factors. According to the Wisconsin Industrial Energy Group, utilities in the state are retiring baseload generation capacity prematurely and replacing it with intermittent sources like wind turbines and solar panels. This trend is not unique to Wisconsin; similar practices are observed across other regions within MISO's jurisdiction.

Compounding these challenges is an expected rise in overall electricity demand. The Biden administration's push towards electric vehicles (EVs) aims for half of new car sales to be battery-powered within six years. Currently, only about 0.3% of vehicles in Wisconsin are EVs. Meeting this target would significantly increase electricity consumption as drivers transition from gasoline-powered cars.

Additionally, switching from natural gas furnaces to heat pumps could further strain the electrical grid. New houses equipped with heat pumps may cost around $20,000 more due to higher electricity usage.

Utilities face pressure from government policies prioritizing carbon dioxide reduction over maintaining reliable power supplies. Consequently, customers endure rate increases associated with closing coal-burning plants while funding renewable energy projects like windmills and solar panels. However, these renewable sources can be inconsistent; for example, large solar arrays do not produce power at night.

Operators of nuclear power plants and data centers recognize these issues and are exploring direct connections between nuclear facilities and servers to ensure uninterrupted power supply. "The customer has come to us and come to many in the industry and said, 'I need as much power as you can make available,'" one CEO told the Wall Street Journal.

As Wisconsin becomes increasingly dependent on electricity amid evolving energy policies and rising demand from new technologies and industries like data centers and EVs, there is a growing call for ensuring a stable power supply even during periods when renewable sources fall short.

Patrick McIlheran is the Director of Policy at the Badger Institute.

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