Jigar Shah: US Grid Peak Demand Under 800 GWs, Overbuilding for 3-5% 'Expensive'

Jigar Shah, former Director of the U.S. Department of Energy's Loan Programs Office, recently highlighted the significant underutilization of the nation's electricity grid, stating that peak demand this year was "a little bit less than 800 GWs." He emphasized that the grid operates at approximately 450 GWs of demand for 95-97% of the time, underscoring the high cost associated with building infrastructure for only a small fraction of its operational period. "Adding infrastructure for 3-5% is expensive," Shah noted in a recent social media post.

Shah's comments draw attention to the economic inefficiencies inherent in the traditional centralized electricity grid model. The current system is primarily designed to meet rare, short-duration peak demands, leading to substantial investments in generation and transmission assets that remain largely idle for the majority of the year. This approach contributes to higher costs for consumers and can hinder the integration of new, flexible energy resources.

The issue of grid capacity and peak demand is becoming increasingly critical amidst rising electricity consumption. Recent data from the U.S. Energy Information Administration (EIA) indicates that peak demand in the Lower 48 states reached approximately 759,180 MW in July 2025, aligning with Shah's figures. Factors such as extreme weather events and the rapid growth of energy-intensive data centers are driving this upward trend in demand.

Shah has been a vocal proponent of Virtual Power Plants (VPPs) and Distributed Energy Resources (DERs) as a more cost-effective and efficient solution to manage grid fluctuations. These technologies, which include aggregated rooftop solar, battery storage, and demand response programs, can provide flexibility and supply during peak times without the need for extensive new centralized infrastructure. This shift aligns with broader efforts to modernize the grid and accelerate the clean energy transition.

The argument for leveraging existing and distributed resources rather than continually expanding traditional infrastructure is gaining traction among energy experts. By optimizing the use of available capacity and integrating smart technologies, the grid can better adapt to demand spikes, improve reliability, and potentially reduce overall system costs. Shah's perspective challenges stakeholders to reconsider conventional grid planning in favor of more dynamic and responsive solutions.