Chapter 2: A Cleaner Path
"No-Regret" Solutions for a Grid Under Pressure
The U.S. power sector is racing to keep up with a new era of electric demand — and right now, many utilities are falling back on fossil fuels to do it. Natural gas plants are being proposed across the country. Coal retirements are being delayed. The climate stakes are rising.
But here’s the thing: fossil fuels aren’t the only option. In fact, they may not even be the best one.
Across the industry, a growing toolkit of “no-regret” solutions offers a way to meet rising electricity demand while keeping the grid reliable, rates affordable, and emissions in check. These are technologies and strategies that are proven, available today, and — crucially — don’t require massive tradeoffs. They’re the closest thing the grid has to a free lunch.
So why aren’t we deploying them faster?
Making More of What We Already Have
One of the most powerful — and most overlooked — opportunities isn’t about building new power plants at all. It’s about using the infrastructure we already have more efficiently.
At any given moment, huge parts of the electric grid are underutilized. Transmission lines might be operating below their thermal limits. Distributed energy assets like rooftop solar or home batteries might be sitting idle. Demand from consumers might be peaking all at once when it doesn’t need to.
This is where grid-enhancing technologies (GETs), demand flexibility, and virtual power plants (VPPs) come in.
GETs are tools that improve the capacity and performance of the existing grid. Think: sensors that adjust power flow in real-time, or dynamic line ratings that allow transmission lines to carry more power safely depending on weather conditions. These upgrades can squeeze more value from every mile of wire without building a single new tower.
Demand flexibility programs help shift when energy is used, not just how much. For instance, electric vehicles or industrial equipment can be scheduled to run during periods of low demand — easing pressure on the grid during peak hours and avoiding the need for new fossil “peaker” plants.
Virtual power plants aggregate decentralized resources — like solar panels, batteries, and smart thermostats — and coordinate them to act like a single utility-scale power plant. In effect, they turn homes and businesses into dispatchable grid assets.
What makes these solutions especially powerful is their speed and cost-effectiveness. Unlike traditional generation, which can take five to ten years to come online, GETs and VPPs can be deployed in months, not years. And they’re often cheaper — not just in capital cost, but in avoided emissions and long-term system upgrades.
Estimates suggest these “grid optimization” solutions could unlock between 75 and 215 GW of effective capacity nationwide. That’s more than enough to offset much of the projected near-term load growth.
The Geography Problem: Local vs. System Solutions
But there’s a key challenge that’s often overlooked: location matters.
While no-regret solutions can boost system-wide capacity, that doesn’t always help in the places where the grid is feeling the most strain. Data centers, in particular, are creating localized spikes in demand — sometimes requiring hundreds of megawatts of new power in a single, concentrated area. Think Northern Virginia, Dallas-Fort Worth, or Atlanta, where hyperscaler campuses are sprouting up faster than utilities can build transmission lines.
In those hotspots, it’s not enough to simply add capacity to the grid in general — it has to be available exactly where and when it’s needed. That’s much harder to do with dispersed solutions like VPPs or demand response, which tend to be scattered across residential or commercial customers rather than clustered near industrial sites.
In other words: VPPs can help shave peak load across a region. But if a data center in Ohio needs 200 MW today, and the local substation is already tapped out, a VPP in Chicago isn’t going to solve that.
This local vs. system constraint is one reason utilities often turn to natural gas — not because it’s the cleanest or cheapest option, but because it can be built right where the demand is emerging, with a clear interconnection path and known performance.
Addressing this challenge will require more thoughtful planning: upgrading local distribution infrastructure, deploying targeted clean capacity, and integrating siting needs into clean energy procurement. It also highlights the need for better alignment between data center developers, utilities, and regulators — ensuring load growth doesn’t automatically trigger fossil build-outs simply because clean options weren’t planned in advance.
So What’s the Holdup?
If these technologies are so promising, why aren’t they everywhere already?
In short: misaligned incentives, regulatory inertia, and institutional complexity.
Most U.S. utilities still earn profits based on how much capital they invest — not on how efficiently they operate the grid. That means they often have more financial incentive to build a new gas plant than to deploy low-cost GETs or flexible demand programs. Regulators, for their part, are sometimes slow to approve new approaches, particularly when the technologies don’t fit neatly into old planning models.
Then there’s the issue of fragmentation. The U.S. power sector is a patchwork of utilities, system operators, and state regulators — each with different planning frameworks, cost recovery mechanisms, and risk appetites. Coordinated action is hard to come by.
Finally, these “no-regret” options require a new mindset. They rely on collaboration between utilities and customers, on visibility into distributed systems, and on smart software coordinating millions of devices. That’s very different from the top-down, centralized grid model that dominated the 20th century.
Bridging to Clean Firm Power
Of course, there are limits to how far efficiency and optimization can take us. As demand continues to rise — especially into the 2030s and beyond — we’ll need new sources of clean, firm capacity: power that is available when needed, runs reliably for long durations, and doesn’t depend on the sun shining or the wind blowing.
Historically, this role has been filled by coal and natural gas. But emerging technologies are starting to show real promise.
Long-duration energy storage (LDES) can store renewable energy for days, not just hours, making it ideal for covering extended lulls in wind or sun. Unlike lithium-ion batteries, which typically discharge over 2–4 hours, LDES can provide sustained backup power and act as a true substitute for fossil peakers.
Advanced geothermal technologies are expanding access to always-on clean power. By tapping deep heat sources using new drilling techniques, geothermal systems can deliver flexible, dispatchable electricity with zero emissions. Companies like Fervo Energy and XGS are already building pilot projects today.
Next-generation nuclear designs promise safer, smaller, and more flexible reactors — including models that can “load-follow” (i.e., ramp up or down with demand). While timelines are still long and regulatory hurdles remain steep, early partnerships between utilities and companies like X-Energy and TerraPower suggest real momentum is building.
These technologies aren’t science fiction — but they also won’t be ready tomorrow. Many face long development and permitting timelines, with meaningful deployment expected in the early 2030s. That’s why action is needed now: to invest, validate demand, and build the public-private coalitions that can bring them to scale.
A Smarter Way Forward
The energy trilemma — balancing reliability, affordability, and sustainability — isn’t going away. In fact, it’s becoming even harder as demand soars, prices rise, and climate targets loom.
But that doesn’t mean we’re stuck with false choices.
Instead of defaulting to fossil fuels, utilities can start by squeezing more out of the grid we already have. They can work with regulators to remove barriers and align incentives. And they can invest now in the clean firm technologies we’ll need later. To be truly effective, they’ll also need to plan locally as well as systemically — building the grid not just bigger and cleaner, but smarter and more targeted.
In Chapter 3, we’ll dive into those long-term solutions — and the partnerships required to bring them to life. Because solving this moment isn’t just about keeping the lights on. It’s about building a future grid that works for everyone.
Our brilliant authors:
Nico deLuna is a joint MS / MBA candidate at Stanford’s Graduate School of Business and Doerr School of Sustainability. He is a core member of the Boston Consulting Group’s Energy and Climate practice areas, leading projects with power utilities, renewable developers, and public sector clients. His experience also includes roles with NextEra Energy Transmission, the Department of Energy’s Loan Program Office virtual power plant (VPPs) team, and most recently at XGS, a growth-stage advanced geothermal startup. Nico is committed to accelerating the transition to a more sustainable, reliable, and secure power system to protect the natural world from climate change.
Cariana Morales is a recent graduate of the Stanford Graduate School of Business. She began her career in management consulting at Bain & Company, focusing on strategy and operations. Most recently, she worked on grid modernization at Pacific Gas & Electric (PG&E) and served as a Shultz Fellow in the Office of Commissioner John Reynolds at the California Public Utilities Commission, where she researched data center load growth and large-load tariff design. Cariana wants to see a world in which load growth is an asset, not a liability, to the future of our energy system.