Are Microgrids and power sources only for those who can afford them?
The global push to renewables has caused a new problem.
Doug Sheridan on LinkedIn has a great post today. He is bringing some huge issues to light. I want to build upon his discussion and add some key points below.
The FT writes, interconnection queues are bursting at the seams in the US, as tech companies tussle to hook power-hungry data centers up to grids across the country. But if data centers are onboarded faster than new power plants can be brought online, consumers could face soaring energy costs and electricity outages, warns energy consultancy Wood Mackenzie in a report.
“There is a risk, especially in deregulated markets, that we will make commitments to build data centers and the sufficient generation won’t be there,” said report co-author Ben Hertz-Shargel. “In the future we could end up in a state of imbalance where we face not only blackouts but severely increased prices.”
One of the biggest challenges is predicting future data center electricity demand. While energy investors plan on 30-year timelines, tech companies have a shorter-term view, being subject to uncertainty over AI’s profit outlook.
While Wood Mackenzie is tracking 134 GW of proposed data centers across the US, interconnection requests far exceed this, due to developers hoarding spots in multiple queues, hoping one of them will pay off.
Developers are increasingly looking outside of hubs such as Virginia and Texas at states including Pennsylvania, Ohio, Indiana and Iowa, where they are banking that connection times will be faster.
Some data center developers are trying to bypass the interconnection issue by developing their own off-grid power supplies, both as a bridge solution until they can hook up to the grid and as a long-term contingency. Data center power demand can vary from minute to minute, and grids are better equipped to deal with the fluctuations.
Utilities that are best placed to handle massive demand growth are vertically integrated ones such as Southern Company operate generation, transmission and distribution, and only commit to serving new loads when they can ensure they have the power to do so reliably.
In deregulated markets such as Texas's ERCOT where electricity generation is opened up to competition—utilities only look at the transmission upgrades that would be required to safely serve the load. This means that data center additions can far outstrip new energy supply.
Our Take 1: If trying to meet even relatively stable demand was going to be a problem for grids increasingly struggling with growing penetration of part-time renewables, the addition of massive amounts of baseload data center load only makes the challenge more difficult. Very interesting times, indeed.
Our Take 2: Risk managers need to be on top of their games. Those not thinking things through run the risk of getting burned—data centers and grids by blackouts caused by insufficient capacity when the sun isn’t shining and wind isn’t blowing.... and generators and investors by a mismatch between time horizons of data centers and the economic lifespans of the generating assets needed to service data center demand. It's a potential minefield.
What is the status of the installation queue?
Doug’s points above are huge, but they brought up a lot of other questions.
The most comprehensive data on grid power sources waiting in the queue in the United States comes from the Lawrence Berkeley National Laboratory (LBNL) and the U.S. Energy Information Administration (EIA), particularly the LBNL's 2024 Queued Up report and EIA's Form EIA-860 M. These sources track proposed power projects in interconnection queues, which are requests to connect new power sources to the grid.
Below, I summarize the number of projects, power amounts (in megawatts, MW), and their distribution by power type (wind, solar, natural gas, coal, nuclear) as of the end of 2023, with some updates from 2024 where available.
Summary of Grid Power Sources in U.S. Interconnection Queues
As of December 2023, the U.S. interconnection queues held approximately 2,040 gigawatts (GW) of total proposed capacity across various power types. This includes both standalone projects and hybrid projects (e.g., solar + storage). The LBNL report, based on data from seven independent system operators (ISOs), five additional large non-ISO regions, and 32 utilities, provides the most detailed breakdown. Here’s the distribution by power type:
Solar:
Capacity: 1,110 GW (1,110,000 MW)
Percentage of Queue: ~54.4%
Notes: Solar dominates the queue, with 676 GW as standalone projects and 433 GW as part of hybrid projects (mostly solar + storage). This reflects declining solar costs and state incentives.
Wind:
Capacity: 352 GW (352,000 MW)
Percentage of Queue: ~17.3%
Notes: Wind includes 300 GW of onshore wind and 52 GW of offshore wind. Offshore wind is concentrated in regions like ISO New England and NYISO.
Natural Gas:
Capacity: 79 GW (79,000 MW)
Percentage of Queue: ~3.9%
Notes: Natural gas proposals are significantly lower than renewables, with some projects including dual-fuel units (e.g., gas + oil backup).
Storage (Battery):
Capacity: 1,000 GW (1,000,000 MW)
Percentage of Queue: ~49% (overlaps with hybrid projects)
Notes: While not a primary generation source, battery storage is a major component, often paired with solar (e.g., 431 GW in solar + storage hybrids). Included here for context due to its prominence.
Coal:
Capacity: Negligible (likely <1 GW)
Percentage of Queue: ~0%
Notes: Coal is virtually absent from queues due to high costs, environmental regulations, and competition from cheaper alternatives like natural gas and renewables. No specific MW figures were reported in 2023/2024 data.
Nuclear:
Capacity: Negligible (likely <1 GW)
Percentage of Queue: ~0%
Notes: New nuclear projects are minimal due to high construction costs and long timelines. Some interest exists (e.g., small modular reactors), but no significant queue presence was reported.
Key Observations
Total Queue Capacity: 2,040 GW, nearly twice the existing U.S. grid capacity (~1,250 GW in 2023). However, only ~10-20% of queued projects typically reach commercial operation due to technical, economic, or regulatory barriers.
Dominance of Renewables: Solar and wind together account for ~71.7% of queued capacity, driven by cost declines and policy support (e.g., Inflation Reduction Act). Storage is also a major player, reflecting the need to manage intermittent renewable output.
Fossil Fuels Decline: Natural gas is a small fraction of the queue, and coal is effectively phased out. This aligns with market trends favoring lower-cost, lower-emission sources.
Regional Variations: Queues are largest in regions like CAISO (California), MISO (Midwest), and PJM (Mid-Atlantic). For example, ISO New England reported 37,000 MW of proposed capacity in April 2025, with 47% wind and most of the rest solar or storage.
Completion Rates: From 2000-2018, only 19% of queued projects (24% of solar, 18% of wind, 16% of gas) were built by 2023, highlighting queue attrition.
As of June 20, 2025, we can see that 53 new natural gas plants are under construction, 97 are in the pre-construction phase, and an additional 85 have been announced, totaling 2,720 MW.
The states with plants under construction for 1,450 MW include Texas, California, Nevada, Utah, Nebraska, North Dakota, Oklahoma, Arkansas, Louisiana, Florida, Mississippi, Tennessee, Kentucky, North Carolina, South Carolina, and Ohio.
Honestly, I did not see the one in California happening, and it is not in the news at all. It is, however, being touted as a 48 megawatt power unit for the City of Lodi. This will not solve the state's demand growth, needless to say.
What is the bottom line for consumers?
We are also examining states with active plans for new natural gas plants as a potential source of low-hanging fruit for data center growth. However, I am also investigating energy policies, demand growth or decline, the energy mix, and the interconnects that are in the queue for installation. It is an ugly mess to weed through, but we’re seeing several key points.
Data on the queues for grid upgrades is from 2023 and out of date, so the best guess is often used.
Project implementation and completion rates are only around 19% to 24%. Therefore, consider the amount of proposed grid additions and realize that only a fraction will be added to the grid.
Bitcoin miners and cities near oil fields are wise to explore stranded gas reserves for their own microgrids.
The key to short-term growth is the power companies that have natural gas power plants in the construction phase and have already purchased their turbines.
The Department of Energy just announced a fast-tracking program for Nuclear reactor testing and approvals. This is huge, but I don't see how it can ramp up fast enough yet. Hopeful, but watching for results.
Spain and Portugal are only the first of major power outages, with the so-called “renewable wind and solar” projects being added to grids globally.
Deindustrialization and fiscal failure follow Net Zero policies like the plague. Consider the UK, Germany, and much of the EU. Officials Warn Net Zero Policies Push Up Short-Term Energy Bills: A Closer Look at the UK’s Energy Mix and Consumer Costs.
Communities and individuals should explore distributed power management and consider implementing microgrids wherever feasible to enhance energy resiliency and security.
I have several interviews lined up in the AI, Data Center, Utilities, Microgrids, and backup power sources. Mark Lancaster is someone I have previously visited on the podcast, and we will be talking again next week. He offers some great insights. If you need to address a business continuity issue, please don't hesitate to contact me or Mark directly.
In the meantime, please conduct a check on your home to see if you can survive without power for 72 hours, a week, or even months. Get a list and a plan.
Do not rely on the government to be there for you. If you can help your family and neighbors, you will be a blessing to everyone.
I just had a power outage this week after a storm, and one house was almost automatic and not an issue. The other had problems with one of the propane backup generators. It was a huge success to have a dry run for an emergency, as everything is now running as it should.
Thank you again to all our great subscribers across all our channels. We appreciate everyone!