Watt, Me Worry? Record-Setting "Capacity" Can't Keep the Lights On

One of the clearest signs that the Energy Transition is failing miserably

“If a wind turbine is installed on the North Dakota prairie, but it isn’t spinning, does it even exist?”

- Anonymous

The prevailing narrative surrounding the power sector is that America’s grid is short of watts, and that we need to vastly increase our power generation capacity to avoid rolling blackouts and meet surging demand for data centers and reindustrialization.

Given the state of the discourse, it may be hard to believe that America has more installed electricity capacity on its grid than ever before. But it’s true. The problem is, so much of this capacity is from unreliable wind and solar facilities that provide almost no reliability value to the grid.

We first debuted this concept in our piece Shocking Betrayal: Why Progressives are Ditching Climate Laws and Dooming the Planet, but the implications are so significant that we concluded the graph merited its own larger discussion.

“Capacity” Growth Exceeded Demand Growth

First, let’s set the stage.

The U.S. technically has more installed capacity on the U.S. grid than ever before, which has increased by 26 percent since 2004 and 12.5 percent since 2015. Meanwhile, electricity demand has only increased by 8.5 percent and 5.6 percent, respectively, during the same timeframes.

The result is that the country has more capacity (MW) per terrawatt-hour (TWh) of generation than ever before.

If “capacity” was the same across all resource types, this data would suggest that we should be more prepared than ever to meet growing electricity demand stemming from data centers and AI.

But we’re not. In fact, the opposite is true.

This begs the question: If the American grid has so much installed capacity on the system, why is it bracing for such severe supply shortages?

The short answer is that the capacity being built today—wind and solar—is far less reliable than the capacity it is replacing—coal and nuclear.

Capacity Doesn’t Always Equate to “Reliable” Capacity

Put simply, wind and solar capacity is not the same as dispatchable capacity due to their intermittency. Intermittent generators are inferior to dispatchable resources for a number of reasons, but mainly because operators cannot control when they produce electricity and when they won’t.

We can forecast when they will or won’t fairly well (but not always), yet that doesn’t give us control over their production levels similar to traditional resources like coal, natural gas, oil, and nuclear. Not to mention, the entire point of forecasting wind and solar production is so that we can use other “backup” resources to supply demand when they aren’t able to, but this backup generation fleet is being retired more and more every year.

For example, the following chart shows that while intermittent resources like wind and solar have made up the bulk of net resource additions in recent years, firm capacity has been on the decline since 2011 with the exception of a slight rise in 2024.

The result is that the U.S. is now at pre-2005 levels of firm capacity on the grid at a time when electricity demand is projected to have the largest increases in over a decade due to data center and AI growth and electrification efforts.

So, even though the grid as a whole has more capacity than it did 20 years ago, the growth is made up entirely of resources that may be producing no electricity whatsoever when needed the most, and the system has roughly the same levels of firm, reliable capacity online as it did in 2004.

The result of this trend is obvious: supply shortages.

And it’s happening in pretty much every regional grid in the country.

Regional Grids Show the Same Trend

The following regional charts are based on data from the Energy Information Administration (EIA) 860-monthly dataset from 2016 through 2025.

Data that includes each Regional Transmission Operator (RTO) only goes back to 2016, but the trend of diminishing dispatchable capacity can still be seen—and this is why despite every RTO having the highest installed capacity than ever before, the NERC Long-Term Reliability Assessment (LTRA) shows that many of them at elevated risks of capacity shortfalls in the near future, including PJM, MISO, SPP, New England, and ERCOT.

PJM

Capacity prices in PJM recently hit record-setting levels, at $333/MW-day, after failing to reach reliability targets.

And it’s no wonder.

Despite having more capacity installed than ever before, reliable capacity in PJM has actually decreased by 2 gigawatts (GW) since 2016, from 198 GW to 196 GW, and is down 6.8 GW since firm capacity peaked in 2018. This comes at a time when peak demand hit new records in 2025 at over 160 GW, according to data from the EIA Hourly Electric Grid Monitor.

Since 2016, the majority of capacity growth in PJM has consisted of solar and gas. However, natural gas additions have failed to keep up with retirements from coal and oil generators, and it’s impossible to maintain a reliable system in the face of growing demand when relying on solely intermittent generators.

NERC explains that state and federal environmental regulations and mandates are mostly responsible:

PJM’s review of recent policies (e.g., state laws and federal environmental initiatives) indicates over 32 GWs of potential deactivations through 2034. The pace of retirements is being driven in large part by these state laws and federal environmental initiatives that create a clear near-term, date-certain requirement for generation to comply or retire. Conversely, there are multiple mandates with renewable portfolio standards (RPS) that account for the majority of over 150 GWs submitted projects.

MISO

The situation in MISO is even worse than PJM.

Once again, even though the RTO has more capacity online in 2025 than any year prior, firm capacity in MISO has dropped by over 22 GW since 2016 and has been replaced by 35 GW of intermittent wind and solar resources.

Natural gas additions in MISO of about 5 GW haven’t come close to replacing the 24.5 GW of coal retirements since 2016. Instead, wind and solar are being used to directly replace firm capacity on the MISO system and, as shown in the graph, MISO increasingly has less reliable capacity to serve peak load.

NERC explains how this trend is leading to supply issues in MISO, “Uncertainty around new resource additions and existing generator retirements results in resource adequacy risks.”

NERC continues, explaining that this trend is expected to continue:

The departure of MISO’s coal fleet has continued with a reduction in capacity of around 6 GW in the past year, and a projected reduction of a further 12 GW over the next five years. Solar continues to rise in capacity contributions with a growth of 1,200 MW since the 2023 LTRA and growth of 3,200 MW in the first year of the study.

This is bad news for everyone within the MISO territory.

SPP

SPP is similar to PJM in that it has had a net drop of firm capacity of 2.6 GW since 2016, which has been replaced with nearly 21 GW of intermittent wind and solar facilities.

Similar to MISO, this trend is expected to get worse, and SPP is becoming morereliant on intermittent resources to meet peak demand.

In fact, it is now so reliant on wind resources to maintain reliability, NERC warns that low wind speeds may result in blackouts in the near future if disptachable capacity doesn’t sufficiently replace an anticipated 8 GW of coal closures slated for retirement.

“There are over 8 GW of coal and gas-fired generators that have indicated they plan to retire over the next 10 years in SPP. Without sufficient dispatchable generation, SPP can experience energy shortages when output from wind resources is low.”

ERCOT

On the capacity side, ERCOT shows a similar trend to the rest. Total capacity is at record highs, yet firm capacity has decreased slightly.

Unique to ERCOT, however, is that it isn’t just anticipating future load growth—it’s been experiencing huge load growth for several decades. Since 2016, peak demand has grown by over 12 GW, or by over 17 percent.

This means ERCOT has built solely intermittent resources, and more recently battery storage, to meet a 17 percent load growth over the last 10 years. The result is that ERCOT is entirely dependent on good weather conditions to meet peak demand.

For example, Monthly Operational Resource Adequacy (MORA) reports consistently show that ERCOT doesn’t have enough dispatchable capacity to meet peak load during average weather conditions, even when including energy storage, as shown below. In the most recent January MORA, load is expected to be 77,387 MW, and ERCOT anticipates 74,176 MW of available dispatchable capacity. The rest is expected to be supplied by wind and solar resources.

Conclusion

These aren’t the only regional grids that show this trend.

The same characteristics exist in CAISO, NYISO, and ISO-NE: total capacity is at record highs, capacity growth consists almost entirely of intermittent and less reliable resources, and firm capacity remains flat or continues to decline.

Most grids are now playing catch-up, attempting to build new natural gas facilities and restart nuclear plants after realizing they cannot meet growing demand with hopes and wishes alone.

But this realization needs to go even further if we want to maintain a reliable grid for future generations.

The reality is that we have spent years building essentially worthless capacity, throwing away money and the backbone of our economy along with it. The failure by policymakers and grid planners has been so severe that serious energy policy proposals are increasingly centered on preventing energy-intensive industries from growing, rather than finding ways to support and integrate them.

This is not the way energy policy should operate. Unfortunately, decades of destructive energy policies are now forcing degrowth (or stagnate growth) solutions upon us because we don’t have the capacity to take on energy-intensive industries, and we may not have a choice.

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