A supply and demand crunch for electricity is coming to Ohio and the surrounding states. Grid operator PJM is warning policy makers that new power generators need to come online or there could be shortages as early as next summer.
Energy-intensive data centers have already started setting up shop in the Buckeye state, and companies are clamoring to build more.
To meet the demand, progressives say there's untapped potential in solar and wind renewables, as battery technologies catch up and get less expensive. But conservatives want to rely on fuel sources they say are better suited to Ohio, like natural gas.
Supply / Demand
For decades the need for electricity around Ohio’s capital and its suburbs has been flat, said Kamran Ali, AEP Ohio’s vice president of transmission planning.
Ali says demand grew 1% or less annually in recent years.
The demand in central Ohio in 2018 was 4,400 Megawatts.
“A megawatt of electricity can serve anywhere from 400 to 900 homes. It's 400 very, very big homes or 900 smaller homes," Ali said.
Those megawatts were enough to power all of the homes and commercial industry in the region.
“We are expecting by 2028 that our demand will go from 4,400 megawatts to 10,000. So we're going to almost double, or more than double the demand in central Ohio by 2028,” he said.
That means central Ohio will need almost as much power as New York City and its suburbs, as soon as three years from now, he said.
And, the state already imports more energy than it produces, which is about a quarter of it.
Ali says he’s confident AEP Ohio will be able to meet the demand that's being driven by data centers. But regional grid operator PJM is not so sure. Asim Haque, PJM's senior vice president, said reliability could become an issue in the 13-state region as early as summer 2026 without more electricity generation.
“There are trends when taken in the aggregate, lending itself to our concerns about being able to maintain grid reliability for, frankly, 65 million consumers across 13 states and the District of Columbia. And really, it's basic supply and demand fundamentals,” Haque said.
Supply is leaving the grid faster than it's being replaced, Haque said. He said it's due to efforts to reduce dependence on fossil fuels, before the capacity to replace traditional sources is available at scale, demand for data centers and because of renewed demand for industry in the region.
Ali says AEP Ohio is working on bolstering the transmission infrastructure that will bring in the large amounts of energy, but it isn’t clear where it will come from.
There’s debate in Ohio about the best way to do it, and at the heart of it, what the role of renewables should be.
Progressives want the state to remove barriers to renewable growth
Progressives argue renewables are the future and the technology is getting less expensive and more versatile.
Researcher Molly Bryden, with progressive think tank Policy Matters Ohio, said the state has already made it harder for renewable projects to take hold in Ohio, by allowing communities to reject the projects in a way that they can't be rejected for oil and gas projects. She says the strategy is decreasing overall electricity generation in the state.
“We do not generate as much electricity, as our current demand levels are at. So that requires us to import electricity through the regional transmission grid and deliver large loads of energy across long transmission lines," Bryden said.
Importing so much electricity from other states, means it has to be transferred over long distances, leading to energy waste, Bryden said. She said only 4% of the state’s generation comes from renewables, compared to 18% nationally.
“Considering the environmental and economic impacts of continued investment in the fossil fuel economy, it's important that we give Ohioans the opportunity to enjoy clean, affordable energy, especially as technologies are developing and advancing at scale to support reliable, clean energy in the face of rising energy demands.”
Conservatives want to forget about renewables and rely on fossil fuels
Conservatives like Rea Hederman with the conservative think tank the Buckeye Institute argue renewables have to be subsidized by the government too much to be truly profitable, and that the government should end subsidies and lighten regulations to encourage competition among energy generators.
“Essentially what a subsidy says is you're going to get money from the government to protect your goods. Which means companies don't need to provide increased value to customers. They don't have to make decisions, because they have government backstopping them. And so, as a consequence, you know, we see less innovation,” Hederman said.
He'd like to see more natural gas production in Ohio, describing the fuel as the state's "competitive advantage."
“We need to make sure our energy is affordable and reliable. And right now, in a state like Ohio, you know, natural gas meets both those criteria," he said.
Haque said PJM doesn't think renewable projects can be scaled to meet the coming demands. And, even with technological upgrades, the projects don’t meet the grid’s mandate to ensure reliability.
“They have their operational limitations, as a way to describe this: We have a metric that we utilize. And if the gold standard is a nuclear plant and it operates at about 95% reliability. A fixed solar unit only operates at 9% reliability. There is the comparison between the two, just purely from a reliability standpoint is pretty stark," Haque said.
