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A chimney from the Linden Cogeneration Plant is seen in Linden New Jersey April 22, 2022. 

Kena Betancur | View Press | Corbis News | Getty Images

Natural gas producers are planning for a significant spike in demand over the next decade, as artificial intelligence drives a surge in electricity consumption that renewables may struggle to meet alone.

After a decade of flat power growth in the U.S., electricity demand is forecast to grow as much as 20% by 2030, according to a Wells Fargo analysis published in April. Power companies are moving to quickly secure energy as the rise of AI coincides with the expansion of domestic semiconductor and battery manufacturing as well as the electrification of the nation’s vehicle fleet.

AI data centers alone are expected to add about 323 terawatt hours of electricity demand in the U.S. by 2030, according to Wells Fargo. The forecast power demand from AI alone is seven times greater than New York City’s current annual electricity consumption of 48 terawatt hours. Goldman Sachs projects that data centers will represent 8% of total U.S. electricity consumption by the end of the decade.

The surge in power demand poses a challenge for Amazon, Google, Microsoft and Meta. The tech companies have committed to powering their data centers with renewables to slash carbon emissions. But solar and wind alone may be inadequate to meet the electricity load because they are dependent on variable weather, according to an April note from consulting firm Rystad Energy.

“Economic growth, electrification, accelerating data center expansion are driving the most significant demand growth in our company’s history and they show no signs of abating,”

Robert Blue

Dominion Energy, Chief Executive Officer

Surging electricity loads will require an energy source that can jump into the breach and meet spiking demand during conditions when renewables are not generating enough power, according to Rystad. The natural gas industry is betting gas will serve as the preferred choice.

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Natural gas prices year to date

“This type of need demonstrates that the emphasis on renewables as the only source of power is fatally flawed in terms of meeting the real demands of the market,” Richard Kinder, executive chairman of pipeline operator Kinder Morgan, told analysts during the company’s first-quarter earnings in April.

“The primary use of these data centers is big tech and I believe they’re beginning to recognize the role that natural gas and nuclear must play,” Kinder said during the call. Kinder Morgan is the largest natural gas pipeline operator in the U.S. with 40% market share.

Natural gas is expected to supply 60% of the power demand growth from AI and data centers, while renewables will provide the remaining 40%, according to Goldman Sachs’ report published in April.

Gas demand could increase by 10 billion cubic feet per day by 2030, according to Wells Fargo. This would represent a 28% increase over the 35 bcf/d that is currently consumed for electricity generation in the U.S, and a 10% increase over the nation’s total gas consumption of 100 bcf/d.

“That’s why people are getting more bullish on gas,” said Roger Read, an equity analyst and one of the authors of the Wells Fargo analysis, in an interview. “Those are some pretty high growth rates for a commodity.”

The demand forecasts, however, vary as analysts are just starting to piece together what data centers might mean for natural gas. Goldman expects a 3.3 bcf/d increase in gas demand, while Houston-based investment bank Tudor, Pickering, Holt & Co. sees a base case of 2.7 bcf/d and a high case of 8.5 bcf/d.

Powering the Southeast boom

Power companies will need energy that is reliable, affordable and can be deployed quickly to meet rising electricity demand, said Toby Rice, CEO of EQT Corp., the largest natural gas producer in the U.S.

“Speed to market matters,” Rice told CNBC’s “Money Movers” in late April. “This is going to be another differentiator for EQT and natural gas to take a very large amount of this market share.”

Natural gas market looks oversupplied right now, says EQT CEO Toby Rice

EQT is positioned to become a “key facilitator of the data center build-out” in the Southeast, Rice told analysts on the company’s earnings call in April.

The Southeast is the hottest data center market in the world with Northern Virginia in the thick of the boom, hosting more data centers than the next five largest markets in the U.S. combined. Some 70% of the world’s internet traffic passes through the region daily.

The power company Dominion Energy forecasts that demand from data centers in Northern Virginia will more than double from 3.3 gigawatts in 2023 to 7 gigawatts in 2030.

Further south, Georgia Power sees retail electricity sales growing 9% through 2028 with 80% of the demand coming from data centers, said Christopher Womack, CEO of Georgia Power’s parent Southern Company, during the utility’s fourt-quarter earnings call in February.

“Economic growth, electrification, accelerating data center expansion are driving the most significant demand growth in our company’s history and they show no signs of abating,” Dominion CEO Robert Blue said during the company’s March investor meeting.

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EQT shares over the past year.

The surging power demand in the Southeast lies at the doorstep of EQT’s asset base in the Appalachian Basin, Rice said during the earnings call. Coal plant retirements and data centers could result in 6 bcf/d of new natural gas demand in EQT’s backyard by 2030, the CEO said.

EQT recently purchased the owner of the Mountain Valley Pipeline, which connects prolific natural gas reserves that EQT is operating and developing in the Appalachian Basin to southern Virginia. EQT is the only producer that can access the growing data center market through the pipeline, said Jeremy Knop, the company’s chief financial officer.

“I think we are very uniquely positioned in that sense,” Knop said during the call. Rice said the Southeast will become an even more attractive gas market than the Gulf Coast later in the decade. EQT is planning to expand capacity on the Mountain Valley Pipeline from 2 bcf/d to 2.5 bcf/d. The pipeline is expected to become operational in June.

The level of electricity demand could help lift natural gas prices out of the doldrums.

Prices plunged as much more than 30% in the first quarter of 2024 on strong production, lower demand due to a mild winter and historic inventory levels in the U.S. By 2030, prices could average $3.50 per thousand cubic feet, a 46% increase over the 2024 average price of $2.39, according to Wells Fargo.

Grid reliability worries

Dominion laid out scenarios in its 2023 resource plan that would add anywhere from 0.9 to 9.3 gigawatts of new natural gas capacity over the next 25 years. The power company said gas turbines will be critical to fill gaps when production drops from renewable resources such as solar. The turbines would be dual use and able to take clean hydrogen at some point.

“We’re building a lot of renewables, which all of our customers are looking for, but we need to make sure that we can operate the system reliably,” Blue told analysts during Dominion’s earnings call Thursday.

Renewables will play a major role in meeting the demand but they face challenges that make gas look attractive through at least 2030, Read, the Wells Fargo analyst, told CNBC.

An all of the above strategy is the only thing that we see as the way to maintain the reliability and the affordability that our customers count on.”

Lynn Good

Duke Energy, Chief Executive Officer

Many of the renewables will be installed in areas that are not immediately adjacent to data centers, he said. It will take time to build power lines to transport resources to areas of high demand, the analyst said.

Another constraint on renewables right now is the currently available battery technology is not efficient enough to power data centers 24 hours a day, said Zack Van Everen, director of research at investment Tudor, Pickering, Holt & Co.

Nuclear is a potential alternative to gas and has the advantage of providing carbon free energy, but new advanced technology that shortens typically long project timelines is likely a decade away from having a meaningful impact, according to Wells Fargo.

Robert Kinder, chief executive of pipeline operator Kinder Morgan, said significant amounts new nuclear capacity will not come online for the foreseeable future, and building power lines to connect distant renewables to the grid will take years. This means natural gas has to play an important role for years to come, Kinder said during the company’s earnings call in April.

“I think acceptance of this hypothesis will become even clearer as power demand increases over the coming months and years and it will be one more significant driver of growth in the demand for natural gas that will benefit all of us in the midstream sector,” Kinder said.

Environmental impact

Any expansion of natural gas in meeting U.S energy demand is likely to be met with opposition from environmental groups who want fossil fuels to be phased out as soon as possible.

Goldman Sachs forecast carbon emissions from data centers could more than double by 2030 to about 220 million tons, or 0.6% of global energy emissions, assuming natural gas provides the bulk of the power.

Virginia has mandated that all carbon-emitting plants be phased out by 2045. Dominion warned in its resource plan that the phase out date potentially raises system reliability and energy independence issues, with the company relying on purchasing capacity across state lines to meet demand.

Duke Energy CEO Lynn Good said natural gas “can be a difficult topic,” but the fossil fuel is responsible for 45% of the power company’s emissions reductions since 2005 as dirtier coal plants have been replaced. Good said electricity demand in North Carolina is growing at a pace not seen since the 1980s or 1990s.

“As we look at the next many years trying to find a way to expand a system to approach this growth, I think natural gas has a role to play,” Good said at the Columbia Global Energy Summit in New York City in April. The CEO said natural gas is needed as a “bridge fuel” until more advanced technology comes online.

“An all of the above strategy is the only thing that we see as the way to maintain the reliability and the affordability that our customers count on,” Good said.

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Caterpillar is putting MASSIVE 240-ton electric haul truck to work in Vale mine

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Caterpillar is putting MASSIVE 240-ton electric haul truck to work in Vale mine

Mining company Vale is turning to Caterpillar to provide this massive, 240-ton battery-electric haul truck in a bid to slash carbon emissions at its mines by 2030.

Caterpillar and Vale have signed an agreement that will see the Brazilian mining company test severe-duty battery electric mining trucks like the 793 BEV (above), as well as V2G/V2x energy transfer systems and alcohol-powered trucks. The test will help Vale make better equipment choices as it works to achieve its goals of reducing direct and indirect carbon emissions 33% by 2030 and eliminating 100% of its net emissions by 2050.

If that sounds weird, consider that most cars and trucks in Brazil run on either pure ethyl alcohol/ethanol (E100) or “gasohol” (E25).

“We are developing a portfolio of options to decarbonize Vale’s operations, including electrification and the use of alternative fuels in the mines. The most viable solutions will be adopted,” explains Ludmila Nascimento, energy and decarbonization director Vale. “We believe that ethanol has great potential to contribute to the 2030 target because it is a fuel that has already been adopted on a large scale in Brazil, with an established supply network, and which requires an active partnership with manufacturers. We stand together to support them in this goal.”

Vale will test a 240-ton Cat 793 battery-electric haul truck at its operations in Minas Gerais, and put energy transfer solutions to a similar tests at Vale’s operations in Pará over the next two-three years. Caterpillar and Vale have also agreed to a joint study on the viability of a dual-fuel (ethanol/diesel) solution for existing ICE-powered assets.

Vale claims to be the world’s largest producer of iron ore and nickel, and says it’s committed to an investment of between $4 billion to $6 billion to meet its 2030 goal.

Cat 793 electric haul truck

During its debut in 2022, the Cat 793 haul truck was shown on a 4.3-mile test course at the company’s Tucson proving grounds. There, the 240-ton truck was able to achieve a top speed of over 37 mph (60 km/h) fully loaded. Further tests involved the loaded truck climbing a 10% grade for a full kilometer miles at 7.5 mph before unloading and turning around for the descent, using regenerative braking to put energy back into the battery on the way down.

Despite not giving out detailed specs, Caterpillar reps reported that the 793 still had enough charge in its batteries for to complete more testing cycles.

Electrek’s Take

Caterpillar-electric-mining-truck
Cat 793 EV at 2022 launch; via Caterpillar.

Electric equipment and mining to together like peanut butter and jelly. In confined spaces, the carbon emissions and ear-splitting noise of conventional mining equipment can create dangerous circumstances for miners and operators, and that can lead to injury or long-term disability that’s just going to exacerbate a mining operation’s ability to keep people working and minerals coming out of the ground.

By working with companies like Vale to prove that forward-looking electric equipment can do the job as well as well as (if not better than) their internal combustion counterparts, Caterpillar will go a long way towards converting the ICE faithful.

SOURCES | IMAGES: Caterpillar, Construction Equipment, and E&MJ.

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Argonne Nat’l Lab is spending big bucks to study BIG hydrogen vehicles

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Argonne Nat'l Lab is spending big bucks to study BIG hydrogen vehicles

Argonne National Laboratory is building a new research and development facility to independently test large-scale hydrogen fuel cell systems for heavy-duty and off-road applications with funding from the US Department of Energy.

The US Department of Energy (DOE) is hoping Argonne Nat’l Lab’s extensive fuel cell research experience, which dates back to 1996, will give it unique insights as it evaluates new polymer electrolyte membrane (PEM) fuel cell systems ranging from 150 to 600 kilowatts for use in industrial vehicle and stationary power generation applications.

The new Argonne test facility will help prove (or, it should be said, disprove) the validity of hydrogen as a viable fuel for transportation applications including heavy trucks, railroad locomotives, marine vessels, and heavy machines used in the agriculture, construction, and mining industries.

“The facility will serve as a national resource for analysis and testing of heavy-duty fuel cell systems for developers, technology integrators and end-users in heavy-duty transportation applications including [OTR] trucks, railroad locomotives, marine vessels, aircraft and vehicles used in the agriculture, construction and mining industries,” explains Ted Krause, laboratory relationship manager for Argonne’s hydrogen and fuel cell programs. “The testing infrastructure will help advance fuel cell performance and pave the way toward integrating the technology into all of these transportation applications.”

The Hydrogen and Fuel Cell Technologies Office (HFTO) of DOE’s Office of Energy Efficiency and Renewable Energy is dedicating about $4 million to help build the new Argonne facility, which is set to come online next fall.

Electrek’s Take

Medium-sized Hydrogen FC excavator concept; via Komatsu.

It’s going to be hard to convince me that the concentrated push for a technology as inefficient as hydrogen fuel cells has more to do with any real consumer or climate benefit than it does keeping the throngs of people it will take to manufacture, capture, transport, store, house, and effectively dispense hydrogen gainfully employed through the next election cycle.

As such, while case studies like the hydrogen combustion-powered heavy trucks that have been trialed at Anglo American’s Mogalakwena mine since 2021 (at top) and fuel cell-powered concepts like Komatsu’s medium-sized excavator (above) have proven that hydrogen as a fuel can definitely work on a job site level while producing far fewer harmful emissions than diesel, I think swappable batteries like the ones being shown off by Moog Construction and Firstgreen have a far brighter future.

Speaking of Moog, we talked to some of the engineers being their ZQuip modular battery systems on a HEP-isode of The Heavy Equipment Podcast a few months back. I’ve included it, below, in case that’s something you’d like to check out.

SOURCES | IMAGES: ANL, Komatsu, and NPROXX.

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Velocity truck rental adds 47 high-speed truck chargers to California dealer network

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Velocity truck rental adds 47 high-speed truck chargers to California dealer network

Velocity truck rental is doing its part to help commercial fleets electrify by energizing 47 high-powered charging stations at four strategic dealer locations across Southern California. And they’re doing it now.

The new Velocity Truck Rental & Leasing (VTRL) charging network isn’t some far-off goal being announced for PR purposes. The company says its new chargers are already in the ground, and set to be fully online and energized by the end of this month at at VTRL facilities in Rancho Dominguez (17), Fontana (14), the City of Industry (14), and San Diego (2).

45 120 kW Detroit e-Fill chargers make up the bulk of VTRL’s infrastructure project, while two DCFC stations from ChargePoint get them to 47. All of the chargers, however, where chosen specifically to cater to the needs of medium and heavy-duty battery electric work trucks.

The company says it chose the Detroit e-Fill commercial-grade chargers because they’ve already proven themselves in Daimler-heavy fleets with their ability to bring Class 8 Freightliner eCascadias, Class 6 and 7 Freightliner eM2 box trucks, and RIZON Class 4 and 5 cabover trucks, “to 80% state of charge in just 90 minutes or less.”

At Velocity, we are not just reacting to the shift towards electric mobility; we are at the forefront with our customers and actively shaping it. By integrating high-powered, commercial-grade charging solutions along key transit corridors, we are ensuring that our customers have the support they need today. This charging infrastructure investment is a testament to our commitment to helping our customers transition smoothly to electromobility solutions and to prepare for compliance with the Advanced Clean Fleets (ACF) regulations.

David Deon, velocity president

Velocity plans to offer flexible charging options to accommodate the needs of different fleets, including both managed, “charging as a service” subscription plans and self-managed/opportunity charging during daily routes. While trucks are charging, drivers and operators will be able to relax in comfortable break rooms equipped with WIFI, television, snacks, water, and restrooms.

Electrek’s Take

Image via DTNA.

While it feels a bit underwhelming to write about trucking companies simply following the letter of the law in California, the rollout of an all-electric, zero-emission commercial trucking fleet remains something that, I think, should be celebrated.

As such, I’m celebrating it. I hope you are, too.

SOURCE | IMAGES: Global Newswire; Daimler Trucks.

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