Co-Locating Loads (Customer & Grid Benefits)
Co-locating loads refers to connecting customer load directly to a generator, ensuring that the customer relies solely on its co-locating generator – or backup sources – without drawing power or other services from the grid. This approach supports the expansion of our nation’s data center economy while creating thousands of jobs, benefits for local communities and minimizing costs for utility customers. Pairing nuclear plants with data centers will allow us to extend the life of these clean, safe and reliable facilities and deliver a win for the environment, large load customers and utility customers alike. Co-located load arrangements provide many benefits, including:
- Timelines: Connecting to the grid often requires a new substation and other transmission grid infrastructure, which can take years for utilities to plan, design, permit and construct. Co-location reduces the need for extensive interconnection facilities and shortens the lengthy interconnection timeline.
- Improved Efficiency: Grid efficiency improves when large loads are located close to its power supply. Locating new loads far from the ultimate generation serving them means relying on the grid to move the power further, likely requiring more upgrades. Energy line losses are also reduced when the load is close to the generation sources.
- Transferred Risk: When loads are co-located with a generator, the risk is transferred from the grid to the co-located load to ensure supply certainty. This risk is not shared with other customers. For grid-connected load, the grid provides a high degree of reliability and all ancillary services, with the costs shared among all grid customers. This means if one resource fails, another can quickly start to provide highly reliable service, and all grid customers share in the costs for this high degree of reliability. However, for a co-located load, if the co-located generator experiences a problem, the load must bear the risk and related costs independently, without the ability to distribute the related risks or costs to other grid customers.
- Co-located Load Cost Responsibility: Infrastructure costs for connecting new loads to the grid are expected to be higher than the costs for co-locating loads with existing generation resources. These grid connection costs are typically share among other grid customers. However, for co-located loads, the costs for private behind-the-meter delivery facilities will be paid entirely by the co-located load, ensuring other grid customers are not responsible for these additional expenses.
- Reliability Assurance: Reliability is crucial for the power grid. Therefore, the grid operator will analyze the co-located load and generation pairing to ensure they don’t compromise the grid’s stability. If the operator decides upgrades are necessary, the generator will be responsible for the costs. Adding new power demands has the same impact on reliability, whether they’re directly connected to the grid or co-located with a generation source. Co-location can even improve reliability by reducing the need to transport power over long distances on the grid.
- Nuclear Stability: Co-location Supports Emissions-Free, Reliable Nuclear Resources: Long-term co-location arrangements with nuclear resources can provide the financial stability needed for nuclear operators to consider renewing their licenses, which is a costly process. For example, the application itself costs tens of millions of dollars. The financial certainty helps ensure that the nuclear resource, along with its emissions-free output, remains operational well into the future. It also opens up possibilities for increasing energy output through uprate projects.
- Interconnection Opportunities for Renewables: Co-located generation resources have a reduced need for grid facilities to transport their output since some of that output is used to serve the co-located load. This creates additional grid capacity (or headroom), which can be utilized by renewable energy sources like wind, solar and other resources. As a result, these resources can connect to the grid quicker and with less impact on transmission line congestion.