Electricity: Sources, Uses & Growth Concerns

The lightening is a photo from Canva pro and the electrical lines are a credit to roa.cedia.edu.ec

 

Commercial Real Estate and Energy

An essential element of commercial real estate is energy, the thing that turns on the lights and make our economy and modern lives work. Our energy provider, CPS, is doing a good job of keeping up with electricity demands in our territory. I attended a presentation by CPS and ERCOT recently.  My key takeaways are as follows:

 

Transmission lines and electricity overloads

Presently, CPS is generating more than enough electricity for our local needs, but they must take the coal-fired base-load generators (the ones that run all the time) off line in the coming years.  They would be replaced with natural gas fired power plants, BUT Bexar County’s air quality non-attainment makes that problematic.

CPS did recently purchase electric producer, Talen’s, 3 gas-fired plants, and picked up a larger piece of supply from South Texas Nuclear Project, however, any new plants will have to be built outside Bexar County. The biggest problem they have are the transmission lines, specifically the ones that transmit electricity cross-country.  Think of these like water pipes.  You can run a trickle of water through a water supply pipe or run it half-full or completely full, or over-load it until it explodes.  That’s the illustration for an electricity line. It can carry varying capacities and even have choke points, believe it or not.

 

Electricity Peaks

The other big issue is that demand varies widely throughout the day and throughout different seasons.  Now CPS can produce enough excess energy because they have “peakers”, which kick in only when demand is high and shut down when not needed. Saving CPS money (and you and me by extension).  And the Kool thing is that when Dallas is in a tight spot to meet their needs, say at 5:30pm on a super-hot day when everyone cranks their home a/c, dear ol’ CPS can sell them electricity, by dumping it into a line that runs up to Big D.  And, CPS makes wholesale prices on it, which are much higher than regular prices.  Good deal.  Last year they banked an extra $250m and this year they project $300m. Whoop. And they are municipal owned, that is you and me, so it helps our rates and puts money aside for the big build I mentioned earlier.

 

Choke Point

About those choke points.  That means too much electricity is being pushed through a big transmission line, to get it to Big D, in my illustration, and the load has to be trimmed. No one wants to be around a big, tall cross-country line when it explodes from over-load. Not pretty.

 

Do we need new AI Datacenters?

So, San Antonio, we have a problem. We are growing and will need more electricity for homeowners and businesses.  We will hopefully have more industries relocate here and they will need more electricity.  Then, the really big users of watts are datacenters.  The new AI datacenters may use 5x to 10x what the old ones (built three years ago) use.  There is one side that says, “let DFW, Phoenix, Northern VA and other places have the datacenters. We don’t need no stinkin’ datacenters because they use too much electricity and don’t produce but a few jobs.” True.

 

But do we opt out of the most advanced technology business of the current generation? Does ignoring AI datacenters make San Antonio look like a good place to do business, especially if we want to be CyberSecurity City USA??  This needs to be discussed.  Yet, we still have to expand our electricity supply fast, not in this county, and yes, at great expense. Bright minds are working this problem.