rewrite this title Will the Rise of AI Leave Us in the Dark?

Living in Florida, blackouts are a part of life.

When hurricane season rolls in, there’s always the chance the lights will go out.

Sometimes the power flickers for a few minutes. Sometimes an outage lasts for days.

But considering how often hurricanes happen here, you develop a healthy respect for how fragile everything becomes without electricity.

No traffic lights. No gas pumps. No air conditioning in the brutal humidity.

In an outage, you quickly realize that a working grid isn’t just a luxury…

It’s vital for survival. Especially for us, with two little kids in our home.

That’s what struck me when Spain and Portugal suffered one of the largest blackouts in European history this week, as tens of millions of people across the Iberian Peninsula suddenly found themselves without power.

Even parts of southern France briefly felt the impact.

Trains stopped running. Hospitals switched to backup generators. Mobile networks went dark.

And it all unfolded in less time than it takes to make a cup of coffee.

What can we learn from this European power outage?

And how likely is it that something similar could happen in the United States?

You might be surprised. But you should definitely be concerned…

A Massive Power Outage

Around 12:30 p.m. local time on Monday, Spain lost about 15 gigawatts of energy in the space of a few seconds. That represents roughly 60% of the country’s total power demand.

You can see the crash in the chart below.

This sudden loss triggered a breakdown in the connection between Spain and France’s grids, and it severed the main artery that could have helped stabilize the system.

With nowhere to pull power from and nowhere to offload stress, Spain’s grid collapsed and pulled Portugal’s grid along with it.

Early reports suggest that a major culprit was low inertia, the stored energy that helps stabilize grids.

With so much of Spain’s electricity coming from solar and wind that day, and many traditional power plants offline, the belief is that the grid simply didn’t have enough backup power to absorb a sudden shock.

But investigators are also still piecing together whether any unusual atmospheric conditions might have been a factor.

So far, that seems unlikely. And there’s no evidence yet of sabotage or a cyberattack.

And that’s concerning because it means that even a modern, renewable-heavy grid can collapse when everything lines up the wrong way.

And it’s especially concerning as an American, knowing the power grid here in the U.S. is arguably in worse shape.

The Aging U.S. Grid

America’s electric grid might be a marvel of engineering, but it’s old.

Much of it was built more than half a century ago.

And like an aging highway, years of patchwork repairs are no substitute for real modernization.

That makes our power grid susceptible to what happened in Europe this week.

Maybe even more so due to the surging demand for electricity here in the U.S.

As we’ve discussed in previous issues, the expansion of data centers and the rise of electric vehicles are two major factors putting unprecedented pressure on the grid.

And according to government estimates, U.S. electricity demand could actually grow 5X more than the expected forecast in the next decade.

Source: https://sprott.com/insights/us-electricity-grid-remakes-itself/

That’s a staggering amount of new load for a system already creaking under the weight of an aging infrastructure.

Meanwhile, the grid’s natural ability to handle sudden shocks is declining.

As more solar and wind come online, they displace older forms of generation like coal and gas which have massive spinning turbines anchoring grid stability.

That’s both a good and bad thing.

On the plus side, these forms of renewable energy are good for the planet, and they result in a system that can respond much more rapidly to changes.

But sometimes those changes happen too rapidly.

Which means a big enough disturbance at the wrong time could ripple out much faster than it would have a few decades ago.

That’s what seems to have happened in Spain this week. And that means it could happen here too…

Even before factoring in the weather.

According to a 2024 report by Climate Central, 80% of all major U.S. power outages reported from 2000 to 2023 were due to weather.

And every year seems to bring a new billion-dollar disaster. Whether it’s a hurricane in my home state, a wildfire in California or a deep freeze in Texas…

Each major weather event tests the limits of grid resilience.

And I’m not saying this to be scary. It’s just reality.

But I have good news, too.

You see, there are real, practical steps we can take to make the grid stronger and more resilient.

We just need the will to act on it.

Here’s My Take

One of the most promising ways we can fix the grid is to rethink where and how we generate electricity in the first place.

Instead of relying almost entirely on big, centralized power plants located miles away from where the energy is used, we can push generation closer to homes, businesses and communities.

This is the idea behind Distributed Energy Resources, or DERs.

Technologies like rooftop solar panels, local battery storage and small wind turbines all fall under this category.

They push energy generation to the local level. And the potential here is massive.

Right now, DERs account for less than 5% of the U.S. energy supply.

But analysts project that DER capacity will increase by about 216 gigawatts by 2028.

That’s more than enough to offset a significant portion of the expected demand surge.

And because energy production is decentralized, DERs offer a powerful safety net.

For example, if a hurricane knocks out transmission lines, a hospital with rooftop solar and battery storage could stay up and running.

If a heatwave overloads a city’s main grid, a neighborhood microgrid could keep homes cool and livable.

And there are benefits for everyday consumers too.

DERs can help lower electricity bills by reducing the need for expensive grid upgrades and cutting peak demand charges.

Of course, DERs won’t magically fix all our power needs. We still need the federal government to aggressively pour resources into modernizing our aging grid.

But building a more distributed system offers us insurance against power outages like the one Spain and Portugal just experienced.

And when a hurricane inevitably hits Florida, maybe it will mean I won’t be left in the dark.

Regards,

Ian KingChief Strategist, Banyan Hill Publishing

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