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US may use Walmart generators to meet rising AI power demand
The US government is considering using backup diesel generators at data centers, big box retailers like Walmart, and other sites to help meet rising electricity demand from AI, said Energy Secretary Chris Wright.
He estimated this approach could provide up to 35 gigawatts of electricity, comparable to 35 nuclear power plants, and potentially reduce the need for new power infrastructure.
Shares of Generac Holdings, a major US backup generator manufacturer, rose up to 1.4% following Wright’s statements.
Wright said these generators are already installed nationwide, but the government is still evaluating how best to utilize them.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
EPA runtime limits curb 35 GW dispatchability
- EPA rules allow unlimited emergency runtime, but only 100 hours a year for nonemergency use, including demand response programs (utility or grid programs that pay facilities to reduce load or run on-site generation during grid stress) 1
- Only 50 hours may be used for paid programs if five conditions are met, including dispatch by a local balancing authority (the grid entity that keeps supply and demand balanced in a defined area) plus operation to ease local transmission or distribution limits 2
- The 35 GW figure names installed capacity, not dispatchable capacity (available to be called upon when needed) 3. Under rules, these units can offer up to 50 hours of compensated demand response in qualifying local balancing authority programs 3. EPA said Duke Energy qualifies as a local balancing authority 3. PJM Interconnection (PJM), a Regional Transmission Organization (RTO), is not 3
Order 2222 could unlock backup generator fleets under DER aggregators, within environmental rules
- FERC Order 2222 directs RTOs and ISOs to admit distributed energy resource (DER) aggregations into wholesale markets 4. It also adds a role for DER aggregators through tariff revisions (formal market rule changes) 4
- ISO New England filed primary compliance on February 2, 2022 and enabled thousands of megawatts of DER participation, making it a viable pilot for backup generator aggregation 4
- A 2014 federal appeals court decision and existing EPA rules still block emergency generators from wholesale demand response unless they meet federal non-emergency emission standards 3
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