MCILHERAN: Wisconsin Needs to Crank up Electricity Supply
July 9, 2024

Patrick McIlheran

Director of Policy, Badger Institute

Electricity demand is growing; citizen demands should, too

By Patrick McIlheran

Life in Wisconsin, we’re informed, is going to be a lot more electric in the years ahead.

It would be nice if we weren’t also about to run short of electricity.

Take, for instance, the buzzy, bright growth prospect for which ground was just broken in Mount Pleasant: Microsoft’s planned data center.

Wisconsinites weary of the phrase “rust belt” can pin some hopes to the growth that could come from the industry made up of the giant blank-walled boxes that house the internet. There already are quite a few data centers in Wisconsin, but what Microsoft is building near Racine stands out, not least for the promise it’ll deal with artificial intelligence. It means lots of jobs, growth and good news.

It also means a lot more electricity being used. Data centers chug the stuff like undergrads drink beer, and the advent of artificial intelligence — which uses, we’re told, about 10 times the electricity as conventional searches — makes power demand soar. The utility that covers Northern Virginia, where about 70% of the world’s data centers now are, last year alone connected 15 new data centers drawing nearly as much power collectively as Wisconsin’s 1,200-megawatt Point Beach Nuclear Plant.

And the supply?

If Microsoft leads a parade of new industry into Wisconsin, where will all that electricity come from?

The Midcontinent Independent System Operator, or MISO, is what shifts electricity from one utility to another across most of the Midwest. And MISO warned last month that the region’s going to be short of juice — by as much as 3,700 MW — next summer. The shortage could hit 14,000 MW by the end of the decade.

For comparison, remember that Point Beach puts out 1,200 MW. We Energies’ peak demand in a heat wave last summer was 5,600 MW.

Why such a shortfall? Because, as a consortium of large-scale customers, the Wisconsin Industrial Energy Group, told regulators last month, “Wisconsin utilities are dramatically reducing electricity capacity through the voluntary, premature retirement of baseload generation,” and they are replacing them with intermittent sources of electricity, generally plantations of wind turbines and solar panels.

Nor is it just Wisconsin. MISO says other utilities across the region are doing the same.

All of this is happening even as — data centers aside — the demand for electricity is likely to rise. The Biden administration already is regulating us into battery-powered cars, using emissions rules to compel manufacturers to somehow persuade half of new American car-buyers to go electric just six years from now.

Right now, only about 0.3% of Wisconsin vehicles are battery-powered models, sales are falling nationally, and building charging stations involves great quantities of taxpayer money. But suppose for a moment the kinks are worked out and we hit Biden’s target. Rejoice as you will over less carbon dioxide out the tailpipe; it still means a lot more electricity will be used.

The federal government says American drivers average 1,125 miles a month. At that rate a sedan uses about 315 kilowatt-hours of electricity in a month, a pickup truck about 480 kWh. For comparison, the average home in our part of the country uses about 800 kWh per month.

If Wisconsin were to do as some other places already have done and make us switch from natural gas furnaces to heat pumps, meanwhile,  we already know that it will cost about $20,000 per new house — because it’ll use a lot more electricity.

As demanded

Utilities, among the most tightly regulated companies in existence, are retiring their large, reliable power plants and substituting intermittent power because government policies dictate it. Carbon dioxide is now regarded as so evil that customers should endure steep rate increases to pay fornow-closed coal-burning power plants even as they also pay for windmills and solar panels. The state’s largest such solar array, west of Madison, takes up about as much land as three Milwaukee north shore suburbs combined and last year put out about 2% of the power that a large coal-fired plant would.

Not to mention that the coal-fired plant puts out power at, say, 10 p.m., when even the largest solar array is producing zilch.

People whose job it is to keep data centers running are taking note. They and the operators of nuclear power plants — which, unlike windmills and solar panels, put out power practically without cease — are in talks to simply run a wire from nuke to server. “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.

How admirably direct. Since the rest of Wisconsin, however, is being made ever more dependent on electricity, perhaps we, too, should be a little louder about demanding there will be some current, even when the wind dies and the sun goes down.

Patrick McIlheran is the Director of Policy at the Badger Institute. Permission to reprint is granted as long as the author and Badger Institute are properly cited.

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