Americas digital economy is turning electricity into a growth industry after years of flat demand. <\/p>\n
Evidence of whats coming is all around us. <\/p>\n
Nvidia, the dominant maker of high-end artificial intelligence chips, is pressing its cloud-computing customers, which include Amazon, Google, Microsoft and Meta, on where they will find the power needed to run servers in the age of generative AI. <\/p>\n
Microsoft has agreed to buy more than 10 gigawatts of renewable energy roughly the equivalent of 10 large nuclear reactors to power data centers in the United States and Europe. <\/p>\n
And energy demand in West Texas could double because of the influx of data centers and cryptocurrency miners hoping to generate electricity from natural gas produced nearby. <\/p>\n
The digital revolution has the potential to overwhelm utilities and regional power grid operators tasked with managing electricity flows. According to McKinsey, data center load is forecast to climb from 19,000 megawatts in 2023 to 35,000 MW by the end of the decade. Thats the same as plugging more than 11 million homes into the power grid. <\/p>\n
But interviews by POLITICOs E&E News show electricity growth could cut a few different ways. Technology giants at the top of the Fortune 500 arent the only ones driving eye-popping projections. Theyre just the first swell in a wave of future demand from electric vehicles, electric heating and the surge in American manufacturing. <\/p>\n
Taken together, the trends could upend U.S. targets for slashing carbon pollution if electric utilities fire up old coal plants or build on their natural gas-fired generation. Virginia, a hot spot for data center growth, has become a closely watched test case, with fears that dominant utilities could slow their energy transition plans to meet demand. Matt Gardner, vice president for electric transmission at Dominion Energy, said at a White House event in May that the utility expects its overall demand to double in 15 years. <\/p>\n
Thats quite a challenge, Gardner said. <\/p>\n
But experts also said the transition to high-powered computing is at an early stage. Its an opportunity for electricity companies and tech giants to learn before they settle into steeper growth curves. <\/p>\n
It shouldnt be that hard to absorb on the grid, especially with the amount of generation going online, said Arman Shehabi, a staff scientist at the Lawrence Berkeley National Laboratory. Theyre giving some utilities strain, but there are new sources of electricity out there. And theres an opportunity to be more creative in how that growth is built out. <\/p>\n
At data centers, vast rooms of computer servers need to be kept cool to prevent hardware from shutting down. An estimated 40 percent of their electricity demand is for air conditioning. According to the Department of Energy, data centers consume from 10 to 50 times more per unit of floor space than a commercial office building. <\/p>\n
And they typically need to be online all the time. That makes it harder to shift consumption away from peak periods of demand. <\/p>\n
T. Bruce Tsuchida, a wholesale power markets analyst for the Brattle Group, said the lumpy load from data centers is making it harder to forecast just how much power those sites will use, and when. A report co-authored by Tsuchida said utilities should improve their forecasting with an expected growth rate of 9 percent in data center load through 2030. <\/p>\n
One of the key things we want to get across is that this is real, this is happening, Tsuchida said. Dont assume its all going to be hunky dory. Its time to think about how to adapt your planning. <\/p>\n
Those forecasts arent as simple as matching up a megawatt of new data center load with a megawatt of new generation. Environmentalists have warned that doing that at a time when electricity load is growing could lead to more fossil fuel plants on the grid, jeopardizing climate goals. <\/p>\n
The opportunity lies in being more collaborative and more forward-thinking about what large loads can do to support the grid, said Alexandra Gorin, a lead analyst of utility reliability for the clean energy think tank RMI. This isnt about one company or one facility. Are there collective actions we could take to mitigate the pressure on grid capacity? <\/p>\n
What flexibility looks like is still taking shape. Data centers arent typically good candidates for demand response programs, where a large load center (or a collection of households) turns down electricity use temporarily when the grid is particularly stressed. Cryptocurrency mines which run banks of computers to validate digital currency transactions have touted their ability to turn down during heat waves or peak demand periods, but their operations are less fundamental to the tech economy. <\/p>\n
Not every data center functions the same way. A March report from Sidewalk Infrastructure Partners, the infrastructure spinoff from Google parent company Alphabet, found that under certain applications, data centers can provide large-scale flexibility to the grid. Planned properly, the report said, data centers could help shave peak load, soak up excess wind and solar power, and utilize existing transmission that might otherwise be stranded. <\/p>\n
One of the interesting elements about artificial intelligence is that certain AI computer loads are more flexible and can be orchestrated, said Sayles Braga, a senior partner at Sidewalk Infrastructure Partners. You have to take a full systems approach and recognize that different data center design and different assets on site will interact with the grid differently. <\/p>\n
Even a center that demands power 99.9 percent of the time, Braga said, can be flexible for that remaining 0.1 percent a slight decrease in demand that could be scheduled to coincide with a summer evening when utilities are feeling a crunch. <\/p>\n
And for tech companies with a national or international footprint, demand can even be distributed to focus the most intensive computer use in areas where there is cheaper and cleaner electricity available. <\/p>\n
Google has piloted a demand response program that shifts non-urgent tasks away from data centers when called on by electricity providers. For example, Google scheduled power reductions in the evening hours between December 2022 and March 2023 in European countries during natural gas shortages and lowered consumption in U.S. states during extreme weather events. <\/p>\n
While we recognize that grid planning and management is ultimately the role of utilities and grid operators, the data center industry is committed to leaning in as an engaged partner, said Josh Levi, president of the Data Center Coalition. Collectively, we can meet the moment and ensure a clean, reliable, affordable, and resilient electric system that supports the digitization of our economy, widespread vehicle and building electrification, the onshoring of advanced manufacturing and other 21st century economic drivers. <\/p>\n
Clean energy advocates also fear that utilities might delay the retirement of fossil fuel plants or even add new ones to the grid to meet the needs of data centers and other new users. The Energy Information Administration estimates that nearly 17,000 MW of new gas plants will be built by 2027, although not all of those plants may come to fruition. <\/p>\n
That comes even as some companies are pledging to run their operations only with clean energy. Google says it has a goal to run its data centers on carbon-free electricity by 2030, while Amazon has a net-zero goal by 2040. <\/p>\n
Thats led to tech companies being some of the biggest initiators of clean energy purchasing. In May, Microsoft partnered with investment group Brookfield Renewable Partners on a deal to supply more than 10,500 MW of renewable power for data centers in the U.S. and Europe. Meta boasts that by 2025, it will support enough wind and solar projects to add 9,800 MW of renewable power to the grid across 24 states and 74 countries. <\/p>\n
An agreement between Georgia Power, state officials and the Clean Energy Buyers Association this year will create a new clean energy program that allows large-load customers such as tech companies to bring third-party clean-energy projects to the grid, helping to offset their potential impact by adding new generation. <\/p>\n
This particular program allows companies to procure energy thats beyond renewables, said Priya Barua, the senior director of market and policy innovation at CEBA, a group that includes more than 400 companies committed to buying clean power. It could be storage or geothermal or modular nuclear. Having this shared arrangement with the utility means there can be efficiencies and potentially eliminate the need for peaker plants that tend to be natural gas. <\/p>\n
Buying clean power, however, does not necessarily ease the impacts to the grid. With nearly round-the-clock needs, data centers cant rely solely on wind and solar power. Sidewalk Infrastructure Partners Braga said that pairing data centers with batteries for backup power can both reduce their carbon footprint and offer a new resource for the grid, but that the technology and interaction with the grid are still developing. <\/p>\n
Shehabi of the Berkeley lab who is working on a report on data center use for Congress said that there are still potential efficiencies to be found as data centers develop. Previous waves of tech growth, he said, ultimately did not crash the grid because companies found ways to operate with less power or because innovations such as cloud computing made the industry more efficient. <\/p>\n
Still, he said, its important to bring on data centers responsibly before more sectors electrify and demand skyrockets. <\/p>\n
Data centers are a good first partner for dealing with the growth in generation and transmission. Theres more flexibility there than in any other growth in the future, he said. This is a great initial run to see how the grid can handle growth. <\/p>\n
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Big Tech is stress testing the grid. It doesnt have to be a disaster. - E&E News by POLITICO<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Americas digital economy is turning electricity into a growth industry after years of flat demand. Evidence of whats coming is all around us. Continue reading