Reindustrialization, Decarbonization, and the Prospects for Demand Growth
How will industrial onshoring and expansion in manufacturing impact near- and long-term demand growth and resource planning?
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OVERVIEW:
THE IMPACT OF INDUSTRIAL ONSHORING ON ELECTRIC SECTOR DEMAND GROWTH
Manufacturing capacity and capability are increasing US electricity consumption by the industrial sector and creating the need to serve large blocks of new load at specific geographic locations. This nonlinear, place-based demand growth can challenge grid planning and operations.
DEMAND GROWTH
QUICK INSIGHTS
Traditional drivers of regional demand growth like population migration are joined by emerging factors such as onshoring, digitization, electrification, and decarbonization.
Serving point loads creates the need for new approaches to load forecasting as well as coordinated planning and development of grid infrastructure.
ONSHORING BY THE NUMBERS: INDICATORS
Industrial reshoring is creating demand growth, with new plants announced regularly.
Industrial load increases due to reshoring
Semiconductors, Mesa, AZ Operational in 2024+;
New load of 10 TWh/yr
Plastics, Beaver County, PA Operational in 2023;
New load of 692 GWh/yr
EV Batteries, Lansing, MI Operational in 2024;
New load of 333 GWh/yr
Transport electrification grows rapidly, increasing
total transportation load from10 TWh in 2020
to ~600 TWh by 2030
2020s
Geopolitical disruptions transform industry thinking and motivate major US legislation
Metals, Blytheville, AR Operational in 2023;
New load of 240 GWh/yr
Solar, Lawrence County, AL Operational in
2025; New load of 101 GWh/yr
Data Center (example) Operational in 2025;
New load of 1000 GWh/yr
Building electrification increases; efficiency
keeps load at ~2800 TWh
2030s
Decarbonization goals reinforce existing trends and drive emergence of new
place-based loads
Industrial onshoring & building electrification
Transport electrification
Industry electrification & fuel processing
loads begin to increase in 2030
Hydrogen production electrolyzer load
begins to increase in 2035
Truck Charging Station (example) Operational
in 2030; New load of 175 GWh/yr
Industrial Electrolyzer (example) Operational
in 2035; New load of 300 GWh/yr
Deep decarbonization both continues and accelerates load growth trends
Transport electrification & hydrogen production
Onshoring, building/industry electrification & fuel processing
2040s
2050s
Load Growth
(Click to Reveal)
metals
solar
semiconductors & electronics
ev & battery space
all
chemicals & plastics
Transportation equipment
miscellaneous
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After decades of offshoring investments and jobs, a revitalization in US manufacturing is occurring.
FIVE KEY TAKE-AWAYS
Like new data centers, the demand growth created by industrial onshoring can have disruptive impacts at localized levels, creating challenges for grid planners—and the need for proactive stakeholder outreach.
Higher-resolution modeling and analysis are required to account for the impacts of place-based demand growth in load forecasting and integrated resource planning.
Increased coordination among electricity providers, manufacturers, system operators, development agencies, regulators, and other stakeholders is essential to ensure that significant new demand can be met in efficient and timely fashion.
Industrial onshoring drives load growth in large blocks at discrete locations, rather than incrementally across regions. Factories and other "point loads" often require grid service on faster timetables than typical T&D upgrade projects.
Public and private sector efforts to improve security and self-reliance are reindustrializing the economy and growing manufacturing load.
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» Total US data center demand is estimated to double by 2030, consuming 35 GW.
» California ISO’s 20-year outlook projects ~30% higher demand increase due largely to decarbonization.
» Arizona Public Service is upgrading transmission to serve ~200 MW of demand for the first of six plant phases planned by Taiwan Semiconductor Manufacturing Co.
» Shell's plastics production plant in western Pennsylvania is projected to use about 7 TWh annually.
» PJM’s long-term load growth projection is 1.4%/yr versus 0.4% in 2021, driven by data centers and electrification.
Topline Facts
Total new load from 155 new/expanded US manufacturing facilities
13K
New/expanded US manufacturing facilities announced, began construction, or initiated commercial operation (1/21-3/23)
155+
Annualized spending on factory construction, Jan 2022-April 2023
2x
GWh/yr
The ongoing reindustrialization (i.e., reshoring and onshoring) involves both the relocation of existing offshored manufacturing capacity to the US and the development of new or expanded domestic production and processing capabilities in existing and emerging industries.
Key sectors include semiconductors, other critical materials and industries, and clean energy technologies such as electric vehicles (EV) and transportation systems, EV and grid storage batteries, solar photovoltaic (PV) modules, and wind turbines.
To improve national security and create jobs,
US policymakers are investing unprecedented sums
in domestic manufacturing, infrastructure,
and decarbonization.
EPRI’s recent “Net-Zero 2050” analysis projects that electricity’s share of final energy will increase from 20% today to about 50% by 2050.
US industrial load, currently about 25% of total use, has been relatively flat for decades due to offshoring and efficiency.
New manufacturing plants can create significant localized impacts by adding large blocks of load, similar to data centers and future truck charging depots and hydrogen electrolyzers.
Financial incentives and grants for expanding the manufacturing capability and capacity of the semiconductor and related industries.
Funds roads, bridges, and public transportation projects and invests in energy, water, and broadband internet infrastructure. Also supports regional hubs for innovation and job creation.
Tax credits, other provisions for accelerating US clean energy deployment while incentivizing domestic manufacturing of EV, charging, battery, solar, wind, hydrogen production, and other low-carbon technologies.
Creating Helpful Incentives to
Produce Semiconductors and Science Act (CHIPS)
Infrastructure Investment and Jobs Act (IIJA)
Inflation Reduction Act (IRA)
Federal
State
Overview: The Impact of Industrial Onshoring on Electric Sector Demand Gowth
Five Key Takeaways
Demand Growth
Quick Insights
Announced Facilities: Overview/Maps
Financial Incentives: Federal & State
Onshoring by the Numbers: Indicators
Learn More
(Click to Reveal)
FINANCIAL INCENTIVES: FEDERAL & STATE
ANNOUNCED FACILITIES: OVERVIEW/MAPS
2030s
2040s
Rapid Load Growth