AI power demand might actually be good for climate
Big energy companies argue that the rising electricity demand from data centers can drive investment in clean energy, despite skepticism. They claim that the increased need offers financial incentives to advance new technologies, while utility executives highlight potential cost reductions and improved grid reliability.
Several company executives have plugged the counterintuitive claim over the past month: Cam Hosie, senior vice president of new energy at SLB, the world's biggest oilfield service provider, called the rapid increase in electricity demand the "greatest blessing" the energy transition could hope for. The sentiment was echoed by Scott Strazik, chief executive officer of GE Vernova.
Strazik said the phenomenon would be "net-decarbonizing.
" But when companies that profit off fossil fuels tout the virtues of the transition to clean energy , skepticism typically follows.
"We see it as a big threat to decarbonization ," said Laurie Williams, director of the Beyond Coal Campaign at the Sierra Club.
At the heart of the debate is the massive new demand for electricity in the US that's expected to accelerate in the coming years.
Demand growth is expected to jump by as much as 15% in some regions over the next five years, according to energy consultancy Wood Mackenzie.
The increase is being driven by the electrification of the economy along with new factories and the rise of power-hungry data centers that support artificial intelligence.
Rising power demand has already delayed some coal-plant retirements and sparked a huge plan for the buildout of natural gas-fired plants, which usually have at least a 40-year lifespan.
Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Advanced Java Mastery: Object-Oriented Programming Techniques By - Metla Sudha Sekhar, IT Specialist and Developer View Program Data Science MySQL for Beginners: Learn Data Science and Analytics Skills By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) AI-Powered Python Mastery with Tabnine: Boost Your Coding Skills By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Performance Marketing for eCommerce Brands By - Zafer Mukeri, Founder- Inara Marketers View Program Artificial Intelligence(AI) Basics of Generative AI: Unveiling Tomorrow's Innovations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Leadership Business Storytelling Masterclass By - Ameen Haque, Founder of Storywallahs View Program Web Development C++ Fundamentals for Absolute Beginners By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Digital Marketing Masterclass by Pam Moore By - Pam Moore, Digital Transformation and Social Media Expert View Program Marketing Digital marketing - Wordpress Website Development By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) AI and Analytics based Business Strategy By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program Strategy ESG and Business Sustainability Strategy By - Vipul Arora, Partner, ESG & Climate Solutions at Sattva Consulting Author I Speaker I Thought Leader View Program Strategy Succession Planning Masterclass By - Nigel Penny, Global Strategy Advisor: NSP Strategy Facilitation Ltd. View Program Marketing Modern Marketing Masterclass by Seth Godin By - Seth Godin, Former dot com Business Executive and Best Selling Author View Program Artificial Intelligence(AI) AI for Everyone: Understanding and Applying the Basics on Artificial Intelligence By - Ritesh Vajariya, Generative AI Expert View Program Web Development Django & PostgreSQL Mastery: Build Professional Web Applications By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance Financial Literacy i.e Lets Crack the Billionaire Code By - CA Rahul Gupta, CA with 10+ years of experience and Accounting Educator View Program Web Development Mastering Full Stack Development: From Frontend to Backend Excellence By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development JavaScript Essentials: Unlock AI-Driven Insights with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Master RESTful APIs with Python and Django REST Framework: Web API Development By - Metla Sudha Sekhar, IT Specialist and Developer View Program "If they just say they need power as quickly as possible, it's going to lead to further entrenchment of a fossil-fuel grid," Williams said.
But energy company executives argue that demand gains will actually provide both the pressure and financial incentive necessary to reform the US electric grid.
"It takes it away from being a zero-sum game to being a growth story," SLB's Hosie said at a BloombergNEF event in New York in late September during Climate Week NYC. "Growth equals investment.
" Indeed, while BloombergNEF data show natural gas remains the biggest source of electricity generation in the US, much more new solar and wind power are added each year than gas. Rising power demand will create the opportunity to restructure our entire energy system, said GE Vernova's Strazik.
His company is spending money to develop small modular nuclear reactors, carbon capture and hydrogen-burning gas turbines that would be hard to justify without demand growth.
"It gives us an opportunity at scale to accelerate new technology," he said in an interview.
"In a flat market you'd have a hard time making those investments.
" Utility executives have made the same point.
"We can have load growth that enables the clean-energy transition," PG&E Corp.
Chief Executive Officer Patti Poppe said in an interview at the RE+ Conference in Anaheim in September.
She added that if the California utility spent up to $1.5 billion to meet an additional gigawatt of data center power demand, the revenue from that new load would cut all customer bills between 1%-2% and free up funds to make the grid more reliable.
And at the same time, tech companies have climate goals to reach net-zero carbon emissions and prefer clean energy for data centers.
Amazon, Google and Microsoft have each announced nuclear deals recently that aim to power operations with carbon-free generation.
Nominations for ET MSME Awards are now open.
The last day to apply is November 30, 2024.
Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.
