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PaperclipPerfector  1mo ago (text post)   24468 thread views

Culture War Roundup for the week of August 17, 2026

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I work in energy (electricity) and this is part true and part untrue. Yes, electricity prices have gone up modestly, with bigger increases projected in the next 5 years.

The reasons prices are set to increase is that we are really slow to put new generation on the grid. And the amount of data centers under construction, let alone planned, is much bigger than what is already operational.

It’s a very simple supply and demand function. Load increases faster than supply. DCs buy power through PPA contracts directly with generators. But that crowds out offtake from the generators that would otherwise go to merchant markets or supply agreements with utilities.

We are average at best at building new power supply.

I expect retail electricity prices to be electoral politics by 2030, maybe even 2028.

This feels somewhat constrained to the local regulatory environment. We can just make investments in the grid faster. In the last two decades, total US nameplate capacity is up 20-30%, while ERCOT (Texas) is up over 100%. They don't want you to know this, but you can just build things: Texas is more friendly to renewables than California these days!

True in Texas. Not true in mid Atlantic and northeast. Sure we can just build things. We can also go to mars or cut Medicare and social security. But we’re not going to. For many many reasons.

And I’m not sure if you realize this, but increasing nameplate capacity 30% in 2 decades is absolutely awful.

And I’m not sure if you realize this, but increasing nameplate capacity 30% in 2 decades is absolutely awful.

That's fair, although IIRC per-capita consumption has declined (mostly through improvements in efficiency --- lighting, HVAC efficiency, better insulation, etc), so it's not quite as dire as it sounds.

But Abbot says there's too many applications for new power connections so he's not going to consider any of them. Brilliant move. Politically, anyway

I think Abbott is at least partially swaying with the political winds here, but ERCOT's 100% increase in the last two decades pales in comparison to their forecast of 300% growth in the next 6 years. I think there are probably legitimate questions of capacity buildout at much higher rates than baseline, and "not committing to anything further" doesn't sound entirely foolish.

On the third (gripping) hand, I really question the hyperscaler economic case where they're able to pay N times the current price for huge amounts of energy, but the proles will still have enough money to pay them for AI services and for utilities. I don't know about everyone else, but "paying to chat with Claude/Gemini/ChatGPT" falls pretty low on Maslow's heirarchy of needs for me, well behind "keep the lights on and HVAC going". Even if they expect B2B to pay the bills, consumers are still an important part (ultimately, the endpoint) of the economy: it can't be B2B all the way down. Models are getting more efficient and I somewhat expect that quite a few use cases need less hardware than currently forecast.

It's pretty obvious all of those DCs aren't going to be built, at least not any time soon (within the next few years); the hardware can't be built that fast and there isn't enough construction capacity. But a moratorium means you're doing none of them.

Existing electricity price increases aren't correlated to data center builds, however. And of course we're slow to put new generation on the grid; environmentalists.

Making datacenters build grid improvements is a real idea that's been floated around.

If you make them build grid improvements (which amounts to money and partnerships with existing firms which do such things; they're not going to do the actual grid improvements any more than Microsoft is restarting TMI), but don't LET them build grid improvements (because environment, safety, union work rules, etc), you've just banned them in a more complicated way.

But datacenters obviously will get built, even if people don't like it- tying grid improvements to them is the best way to make sure grid improvements actually happen.

Sure, and it makes perfect sense if someone wants to attach an enormous data center to your grid to do just that. However, the electricity complaints aren't the real objection any more than the water complaints are. It's just a nebulous NO with the specific complaints being the rationalizing faces of it, and so you can expect "making data centers build grid improvements" to come alongside "don't allow grid improvements" because the reason for such requirements is to block the datacenters.

But datacenters obviously will get built, even if people don't like it

I know plurality-voting representative democracy has a major sell-out problem, but there are still some limits on that problem.

It’s worse than environmentalists. If it was just that I’d have some hope. It’s the bureaucracy, regulation, cost disease, NIMBYism, and a general atrophy of industrial construction capacity.

Existing electricity price increases aren't correlated to data center builds

I don’t understand your point. Please elaborate. Evan assuming your point is accurate, I don’t think it matters.

You talked about how there has been no (little?) electricity price increase increase to date and that it’s only future price projections that have increased. I can assure you that when a power plant in 2026 is signing a 15-25 year power purchase agreement, those future energy price projections are the #1 thing they’re basing their price negotiations on. There’s a handful of companies that put out these projections and everyone makes long term financials decisions on them. The feedback loop on how these contracts affect the current price of power should be obvious, but I can elaborate if needed.

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