FERC Chair: Gas Needed to Head Off US Grid’s ‘Rendezvous with Reality’

When Federal Energy Regulatory Commission (FERC) Chairman Mark Christie took the stage at the CERAWeek by S&P Global conference, he was simple and direct: more gas!

Electric grids in the U.S. are already spread thin, especially when unpredictable weather strikes. And with forecasts of an 80% increase in power demand in the next five years, Christie repeated again and again that combined-cycle gas is the way to go.

It’s not enough for electric grids to have enough power on average, he told the audience. Sufficient power supply is needed even when the sun isn’t shining and the birds aren’t chirping.

“When it comes to the reliability of the electric grid, we have a rendezvous with reality,” Christie said.

Natural gas, nuclear and coal are the top energy sources used to power the PJM Interconnection, the grid servicing the eastern U.S. and the largest grid operator in America. Those dispatchable resources are heavily leaned on, especially when energy sources such as wind and solar are out of commission.

But coal, a dispatchable resource, is becoming an unfavorable fuel due to its emissions, “for better or worse,” Christie said.

“We've been losing coal generation at a pace in America that is unsustainable given the other side of the equation, which is the increase in demand,” Christie said.

Power demand is already rising and will continue to skyrocket as data centers come online to supply growing AI adoption.

“We're seeing load forecast that, in my experience as a state regulator, are mind boggling. We've never thought we'd see a load forecast and increases in demand. So supply is not keeping up with demand, which is a very simple Econ 101 phenomenon.”

As coal continues to be phased out, a different energy source will not only need to fill in the gap but fulfill growing demand. Nuclear is one possibility but “extraordinarily expensive,” he said—leaving natural gas as the best option.

Supply-demand answers

The answer to the supply-demand equation Christie pitched is combined-cycle gas generating units.

Combined-cycle gas provides baseload supply not dependent on weather. Unlike peakers, which are meant to provide power to boost the grid when it’s needed, combined-cycle gas turbines can be relied on heavily and are also more efficient.

Other panelists during CERAWeek were more focused on an “all-of-the-above” approach.

In a panel exploring how incoming data centers will be powered, GE Vernova CEO Scott Strazik said technological innovations will be “forced” forward.

“Whether that's nuclear, whether that's carbon capture, these are technologies that are innovating faster because of the AI data center demand cycle with customers that are going to help us innovate at scale,” Strazik said.

Investments in technology will get the most out of the grid, especially as it ages.

He agreed that, at the moment, nuclear is expensive to build. But “we'll come down the cost curve over time, but in the early days it can be easy to use that as a fear factor of how expensive these things are,” he said.

But gas is also a practical choice for grid power—and investments in natural gas can be decarbonized later on, Strazik said.

“Gas is a very logical fit to come in and surge on the near-term needs, but a dollar invested in gas isn't a dollar invested in carbon forever,” Strazik said.