#194 – Inside Our Industry – Where Will the Power Come From

Posted on | Inside Our Industry

Energy availability and usage are key topics when looking to the future, whether it is considering the power needs of a new computer chip manufacturing plant or, on a smaller scale, how much electricity is needed to charge your new electric vehicle. Power is on the minds of a lot of people. Following are excerpts from “The Success of US Chip Manufacturing Hinges on Our Electric Grid,” Sarah Shinton, IndustryWeek.com.

The U.S. imports most of its advanced semiconductor chips from Taiwan… The prevalence of semiconductors in modern life leaves the U.S. in a dire position if exports from Taiwan become disrupted—a predicament that has prompted efforts to reshore manufacturing. 

While manufacturing semiconductors has always been energy-intensive, the process is becoming even more so as chips are developed to be smaller and more powerful. The most advanced semiconductors require extreme ultraviolet (EUV) lithography machines, which use ultraviolet light produced by rapid-fired lasers to burn fine details on silicon wafers. 

The vast amount of electricity needed to onshore this new manufacturing comes at a time when America’s power grid is increasingly unreliable as the country undergoes rapid changes. In the past decade, natural gas plants started displacing pricier coal-fired ones as fracking reached previously inaccessible gas sources. The fracking revolution lowered the price of natural gas by nearly 50% in the mid-2010s, leading to a proliferation of gas plants. Now, wind and solar farms are increasingly replacing coal, nuclear and even gas plants. However, many regulators are raising alarms that power plants are being retired faster than they are replaced, leaving the country at risk of electricity shortages. 

These mass retirements are also happening while electricity demand nationwide is increasing from data center growth, expansions in manufacturing and intensifying weather conditions. Over the past year, the five-year load growth forecast nearly doubled, jumping from 2.6% to 4.7%. While this increase may seem modest, it represents a stark departure from the 1% annual growth that decision-makers have come to expect over the past 20 years. Many utilities are already scrambling to update their integrated resource plans, with some expecting loads 17 times greater than forecasted just a year ago. Without expanding the high-capacity transmission system, our grid will struggle to meet this demand.

While the shift towards reshoring production will inevitably be long and gradual, electricity shortages may hamper this effort. …we need a grid that can power American manufacturing, or we risk facing cataclysmic supply chain disruptions.

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