wants more power—literally.
The man behind the race to replace gasoline-fueled cars with electric ones is worried about having enough juice.
In recent days he has reiterated those concerns, predicting U.S. consumption of electricity, driven in part by battery-powered vehicles, will triple by around 2045. That followed his saying earlier this month that he anticipates an electricity shortage in two years that could stunt the energy-hungry development of artificial intelligence.
“You really need to bring the time scale of projects in sooner and have a high sense of urgency,” Musk told energy executives Tuesday at a conference held by
one of the nation’s largest utilities. “My biggest concern is that there’s insufficient urgency.”
Musk’s participation with PG&E Chief Executive Patti Poppe at the power company’s conference marked the third major energy event the billionaire has appeared at in the past 12 months. He has played the part of Cassandra, trying to spark more industry attention on the infrastructure required for his EV and AI futures as he advocates for a fully electric economy.
“I can’t emphasize enough: we need more electricity,” Musk said last month at an energy conference in Austin. “However much electricity you think you need, more than that is needed.”
PG&E Chief Executive Patti Poppe speaks with Elon Musk virtually at the power company’s conference.
The U.S. energy industry in recent years already has struggled at times to keep up with demand, resorting to threats of rolling blackouts amid heat waves and other demand spikes. Those stresses have rattled an industry undergoing an upheaval as old, polluting plants are being replaced by renewable energy. Utilities are spending big to retool their systems to be greener and make them more resilient. Deloitte estimates the largest U.S. electric companies together will spend as much as $1.8 trillion by 2030 on those efforts.
Adding to the challenge is an industry historically accustomed to moving slowly, partly because of regulators aiming to protect consumers from price increases.
And that has been mostly OK. For the past 20 years, U.S. electricity demand has grown at an average rate of 1% each year, according to a Deloitte study.
“If you have a fairly static electricity demand, which has been the case in the U.S. for a while, it hasn’t changed a lot, then having projects take a long time is OK,” Musk said Tuesday. “But in a rapidly changing scenario, where electricity demand is increasing, we have to move much faster.”
Executives and consultants do see stark change coming—but not as dramatic as what Musk predicts.
Deloitte estimates the top U.S. electric companies together will spend as much as $1.8 trillion by 2030 to revamp their systems to be greener and more resilient.
Photo: David Paul Morris/Bloomberg News
PG&E expects electricity demand will rise 70% in the next 20 years, which, the California company notes, would be unprecedented. Similarly, McKinsey expects U.S. demand will double by 2050.
“This is an opportunity of the century for the power sector, and they could blow it if they don’t get it right,” Michael Webber, an energy resources professor at the University of Texas, Austin, said of the industry. “This demand growth is partly from EVs, but also heat pumps, data centers, AI, home devices…you name it.”
PG&E’s Poppe seemed receptive to Musk’s warning, if not exactly leaping to update her plans. “We are definitely taking notes here,” she told Musk. “I’m going to be the last person to doubt your predictions for the future.”
Part of the differing views of growth may boil down to how Musk wants the world to change. He wants cars and heating systems running on electricity.
His push for tripling output is part of his advocacy for a transition to a fully electric economy, a more ambitious step than many in the industry are pursuing.
Elon Musk says U.S. consumption of electricity, driven in part by battery-powered vehicles, will triple by around 2045.
Photo: saul loeb/Agence France-Presse/Getty Images
Beyond seeking a greener future, Musk is also warning that a lack of electricity could be crippling, much like the recent chips shortage that damaged the tech and auto industries. This time, it might stunt the burgeoning development of AI.
“My prediction is that we will go from…an extreme silicon shortage today to…an electricity shortage in two years,” Musk said during an event earlier this month to discuss his new startup, xAI, which aims to develop advanced intelligence. “That’s roughly where things are trending.”
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A decade ago, his predictions for electric-car growth were seen by some as wildly optimistic, but his determination helped make him the world’s richest man and
the world’s most valuable automaker.
As the chief executive of Tesla, Musk does have a vested interest in more electricity, especially as he chases the goal of being able to build 20 million EVs annually by 2030. Tesla is centered around the mission of ushering in renewable energy and has smaller parts of its business selling solar panels and battery storage, including to utilities.
One of Musk’s solutions is to better optimize the grid by running power plants around-the- clock and storing the energy not used during peak hours in battery packs for use later. “I’m not sure it might be as much as a 2x gain…but it’s at least 50% to 100% increase in total energy output,” Musk said recently.
He is advocating for more electricity at the same time he is stoking demand. And no place in the U.S. better illustrates that than in California, where car buyers continue to embrace EVs sold by him and others.
Elon Musk shared the stage in June in Austin, Texas, with Edison International CEO Pedro Pizarro, who said he didn’t quite agree with the billionaire entrepreneur’s projections for electricity demand.
Photo: Matthew Busch for The Wall Street Journal
The success of Tesla helped EVs make up 21% of new vehicle registrations in the state through the first half of this year, an increase from just 5.2% in all of 2019. Nationally, EVs haven’t yet grabbed market share like they have in California, but sales are growing. Musk predicts half of all new vehicles sold globally by 2030 will be electric.
The rate of EV load on the energy grid has surprised
At the June conference, Pizarro was on stage with Musk, who told the energy executive that his prediction of 60% demand growth in California by 2045 wasn’t enough, saying, “I think it’s much more load than that.”
“It may be,” Pizarro responded as awkward laughter erupted in the auditorium full of energy executives.
“Uh, by like a lot,” Musk continued. “It’s just, everything is going to be electric.”
A few weeks later, in an interview, Pizarro said he was still thinking about the exchange.
While he still doesn’t see demand tripling, Pizarro said, the company’s predictions for electricity demand will likely be higher than 60% once it finishes reviewing what changes state mandates and consumer preferences are having on their assumptions, which were originally made in 2019.
“Right now,” Pizarro said of Musk, “we may have, maybe, a little different view in terms of a matter of degree in what is a practical approach but I appreciate that he is putting a marker out there.”
Write to Tim Higgins at firstname.lastname@example.org