Tackling US grid congestion to meet the demand surge

**Pamela Largue** (0:10)
Data centers, electric vehicles, and rapid electrification are driving unprecedented growth in electricity demand across the United States. The questions are, can the grid keep up? And can utilities keep pace with changing flexibility requirements while ensuring optimal network utilization?
To answer these questions, and to unpack the growing challenges surrounding grid congestion, I speak with Nick Chaset, CEO of Octopus Energy US. He explores why flexibility may just be as important as new generation, how large energy users can become part of the solution, and why smart software, energy storage, and regulatory reform will be critical to building a cleaner, more affordable energy system. I'm Pamela Largue, and this is the Energy Transitions Podcast.
Nick, thank you so much for joining me today. We're talking about grid congestion in the US, and some people argue that the biggest constraint actually is not generation, but grid capacity and flexibility. What are your thoughts on this?

**Nick Chaset** (1:22)
I think it's a bit of everything, and it's going to be somewhat market specific, but absolutely. The challenge I think is fundamentally best understood in the context of 8,760 hours a year, and as load is growing so fast, the mismatch is specific hours during the year being mismatched between supply and demand and capacity in the network to serve versus demand for supply.
And so that mismatch is to me sort of the clearest and simplest articulation, because when you think about it from an hourly perspective, it also helps to me to sort of contextualize the types of solutions that you need to think about, right? Generation certainly is a solution. Building more generation allows for a better match between supply and demand, but also reducing consumption elsewhere in a network gives you an equal solution, right? Because you're just trying to find that balance between supply and demand in every second minute, 15-minute interval, hour and above.
The congestion dynamic, right? Gets to the more localized nature of the challenge, that you have that supply-demand dynamic that is magnified within a specific subsection of your network. And again, I think that's right, that it is a big challenge, especially as you have these big point source loads that are coming online. If you think about a 500 megawatt or 1000 megawatt data center that might be coming online, it creates a cascading of challenges from the very localized challenge within that substation area or that specific point of interconnection to the transmission system, all the way up to the entire system where you have to maintain that balance. So I would say it's yes and.

**Pamela Largue** (3:12)
Nick, what do you believe are the biggest drivers of grid congestion in the US today? And how has it changed over the last few years?

**Nick Chaset** (3:20)
I think the place you have to start that question is with load growth because we have just seen a level of new load coming online over the last five years. That's fairly unprecedented. Really have to go back to the 1960s when you have post-World War II economic boom to see the level of change in demand and new load coming online. That sort of industrialization that we were seeing across the United States during that period is really only matched by today. And so a lot of it is data center and the massive demand for data center. But it's not simply data center. The electrification trend really can't be denied as well.
As much as the news coverage globally might be that demand for electric vehicles in the United States is slowing, we're still seeing millions of EVs being employed every single year. And every EV is somewhat equivalent to a new home, right? So a home has a demand of X, it buys an EV, now it's 2X. Two EVs, 3X. So we really are seeing a level of growth, particularly in places like California with electric vehicles, where you have north of 1.5, 2 million electric vehicles on the road. That looks like massive population growth. So electric vehicles are a big part of it as well. And then just general economic dynamism and growth in the economy.
The US economy in the last five years has grown a lot, advanced manufacturing, chips, battery factories and the like, also demanding lots of electricity. So again, it's lots of factors, but I would say the single most clear one to point to is the AI data center dynamic that is just coming in and being very chunky, right? When you're talking about 500 megawatts, a gigawatt, two gigawatts at a time, and these facilities coming online in 12, 18, 24 months, it's undeniable that that's a big driver.

**Pamela Largue** (5:26)
That is chunky indeed. So my question then is, how can utilities and regulators adequately plan and prepare for that kind of chunky impact?