Exxon Mobil unveils plans to build a natural gas power plant to supply electricity to data centers
"Exxon’s planned gas plant would have no reliance on or connection to the power grid [islanded], which means “it can be installed at a pace that other alternatives, including U.S. nuclear power, cannot match....”
Most generation built in an islanded mode is planned to ultimately be connected to the grid. However a permanently islanded mode offers many benefits that cannot be achieved when a grid connection is contemplated.
(1) Innovation – If the ultimate plan is to connect to the grid, then everything is designed with that in mind and thereby limited. However, the grid is not some perfectly designed thing. It’s a hodge-podge of many bits that got connected and became “standard”. If one thinks about islanding permanently, one can start from a clean sheet of paper. State of the art everything becomes possible. Things that can’t be considered are suddenly feasible. For example, are there benefits to a DC grid? What about a 50Hz grid? I don’t know if either of these are good ideas, but they illustrate how everything is open to innovation when permanently islanding.
(2) The grids are too large – Grids have and will continue to grow endlessly, just like government. How do we know that? Because there are no competitive constraints on the grids. And just like there used to be a cliché when I first started in my business career 40 years ago, “nobody gets fired for buying IBM”, similar thinking drives the interest in grid connections. You can’t get fired for connecting to the grid despite all signals pointing to increasing fragility, greater politicization, necessarily slow and bureaucratic processes, and the snail’s pace of innovation. All these things will only get worse over time.
(3) Diversification – Islanding reduces risk just like diversification of an investment portfolio. If an issue befalls a grid, all facilities that are connected will bear some of the burden even those that have backup. The burden could include significant things like downtime or costs imposed by subsequent legislation or regulation.
(4) Customer focus – Islanding opens the door to focusing on what consumers want and are willing to pay for. For a century regulators have made those calls. In general, regulators have believed that everyone wants the same products, services, costs, reliability, etc. Maybe in general all consumers do want the same things, but I seriously doubt it.
