Missouri Needs to Be Prepared for Growing Energy Demand

When the legislature finally passed an education reform bill, I was hopeful this would mean we would see movement on other important bills as well. However, as we approach the final weeks of the legislative session, it seems that some bills may be sputtering out. Among them are bills that would strengthen Missouri's energy sector-in particular, House Bills (HB) 1435 & 1804.

Missouri cannot keep putting off energy reform until the next year-change is happening now, and energy demand is growing.

For the first two decades of the 2000s, electricity consumption remained flat without significant growth, as increased demand was offset by increased energy efficiency. However, in recent years energy demand has been on the rise again.

Forbes, the Department of Energy, and The New York Times all note the same driving forces for this increasing demand-data center growth (accelerated by the growth of AI) and a boom in electrical manufacturing (batteries, computer chips, etc.). What is one thing data centers and factories have in common? They both require power 24 hours a day-something non-dispatchable resources like solar cannot effectively provide alone. (Small modular nuclear reactors are great at providing continuous power . . . just saying.)

Some prominent organizations, such as Goldman Sachs and McKinsey & Company, have forecasted that U.S. data center energy usage will double by 2030. To put it into perspective, Goldman forecasts that data centers' share of total U.S. power demand will rise from its current 3% level to 8% by 2030. This is an enormous amount of electricity-equivalent to the power needed for over 40 million U.S. homes.

Ameren is planning to shut down all coal plants by 2045. To replace coal plants' production and meet new demand, our state will need to build reliable, powerful, and clean power plants.

Nuclear power can check all of these boxes, but we need regulatory reform to allow nuclear to flourish in Missouri. To replace and meet new energy demand, our state should strongly consider nuclear energy.

The primary policy that has impeded our nuclear industry for decades is the construction-works-in-progress (CWIP) law. This statute prevents utilities from raising rates in order to help pay for construction-works-in-progress, making it much more difficult to develop nuclear projects. CWIP has proven fatal for Missouri's nuclear industry, as nuclear projects are both extremely capital intensive and subject to extensive holdups in the regulatory process.

Nuclear plants do not arise out of thin air, and they will not be built in Missouri if there are too many regulatory barriers. Eliminating the longstanding CWIP statute by passing HB 1435 and HB 1804 would provide a backstop for the large upfront costs of small modular reactor construction so that utilities can work with both domestic and international nuclear developers to revive our state's nuclear industry.

In the remaining weeks of the session, the legislature cannot forget about the need for modernization in the energy sector. Electricity demand is on the rise, and Missouri should prepare to meet this demand.

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