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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

Read more

Industry News

Senate Approves Ethanol and Energy Tax Breaks

LCG, April 24, 2002-Yesterday the United States Senate approved $14 billion in energy tax relief as a part of the larger energy bill to be voted on as soon as this week.

According to Senator Max Baucus, D-MT, the tax break package was split evenly between production and conservation.

The proposal awards renewable energy $2.3 billion in tax credits and energy efficient appliances and buildings $2.2 billion. $1.8 billion in credits would be given to alternative fuel for vehicles.

$1.9 billion would go to incentives for cleaner coal technology, and $4.4 billion in credits would be allotted to shale oil, natural gas, and coal bed methane.

The Senate also discussed ethanol as a part of yesterday's debates. While ethanol use was hotly contested by California and New York senators, the Senate passed a proposal to triple ethanol use.

Led by Senator Tom Daschle, proponents managed to convince senators to instate the use of 2.3 billion gallons of ethanol by 2004, and 5 billion gallons by 2012. U.S. consumption of ethanol last year was about 1.7 billion gallons.

According to proponents, combining corn-derived ethanol with gasoline yields a cleaner-burning fuel,can displace the hazardous and controversial MTBE, and yields less toxic carbon monoxide gas than regular fuel. Not surprisingly, the measure enjoys strong support from the agriculture industry, which produces more corn than it knows what to do with.

However, some states worry that the ethanol plan would result in gasoline shortages and increased prices because of shipping difficulties. Also, some scientists believe that burning ethanol might produce more smog during warmer months because of nitrogen oxide emissions.

Daschle insisted that states worried about inconsistent supply could apply for waivers from the new requirements.

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