More 2025 trends: DeepSeek, plug-in hybrids, and curtailment
Feb 6, 2025
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Nat Bullard, co-founder of Halcyon and former chief content officer at BloombergNEF, discusses crucial energy trends. He reveals the rise of solar versus stagnating wind energy installations and highlights the mishandling of renewable power amid soaring demand. The conversation also dives into the booming market for Chinese plug-in hybrids and the efficiencies posed by DeepSeek. Bullard underscores the urgent need for better transmission infrastructure, especially due to the energy demands from data centers.
The podcast highlights significant growth in solar energy installations, outpacing wind energy's stagnation due to regulatory challenges and deployment simplicity.
The rise of plug-in hybrids, particularly in China, signifies a shift towards versatile energy-efficient vehicles well-suited for diverse driving environments.
Deep dives
Rising Trends in Solar and Wind Energy
Solar energy has seen significant growth, with 599 gigawatts installed globally last year, contrasting with the wind sector, which, although it achieved a record 130 gigawatts, has not been growing at the same pace. In the United States, investment has clearly shifted, with solar seeing over $40 billion in investments, while wind has declined, affected by political sentiments and regulatory challenges. The rapid development of solar is attributed to its simpler and faster deployment compared to wind energy, which faces hurdles in areas such as interconnection and transmission reforms. As a result of this disparity, solar is expected to continue its upward trajectory, while wind may face ongoing challenges despite being a complementary resource to enhance energy generation.
Electricity Supply Challenges: Curtailment and Pricing
The increase in solar and wind energy sources has led to significant periods of oversupply, particularly in California, where curtailment of solar energy reached over 750 gigawatt hours in a given year. During times of low demand and high supply, California has experienced negative pricing events, raising concerns about an impending electricity supply crunch amid expectations of growing energy consumption. Similar instances of negative pricing have dramatically increased across Europe, indicating systemic issues in energy market dynamics regarding energy distribution and storage capabilities. Addressing these challenges will require innovations in energy management, such as hybridizing generation with storage to absorb excess power.
Transformations in Vehicle Markets: The Rise of Plug-in Hybrids
The landscape of electric vehicles is shifting, particularly due to the increasing popularity of plug-in hybrids, which are especially prevalent in the Chinese market. Unlike the traditional perception of plug-in hybrids as limited in capability, modern extended-range EVs offer substantial battery ranges, often exceeding 200 kilometers, alongside highly efficient combustion engines. These vehicles are seeing significant adoption not only in China but are also being exported to various countries, providing solutions for regions lacking developed electrical infrastructure. This evolution marks a notable shift in consumer preference towards versatile energy-efficient vehicles that offer practical advantages in diverse driving environments.
The Impact of AI on Energy Demand and Data Centers
The introduction of highly efficient AI models, like DeepSeek, may have profound implications for energy consumption in data centers, allowing for reduced electricity demand in powering large-scale AI operations. This model demonstrates reduced GPU training hours needed, making it approximately ten times more efficient than prior models, which could change the trajectory of data center construction and operational requirements. As the demand for data processing grows, maintaining energy efficiency is crucial, and it's vital to explore the potential of smaller-scale data centers that are easier to site and manage as opposed to the current trend of mega-scale facilities. The evolving energy landscape necessitates a reevaluation of infrastructure strategies, particularly as efficiency advancements continue to reshape the operational dynamics of new technology implementations.
Didn’t catch last week’s episode on Nat Bullard’s mega slide deck on energy transition? Start there.
This is the second half of our extended conversation with Nat, the former chief content officer at BloombergNEF and current co-founder at data insights company Halcyon.
In this episode, Shayle and Nat dig into topics like:
Rising solar installations and stagnating wind
Why we’re wasting so much renewable power amid skyrocketing load growth
The rise of Chinese plug-in hybrids and exports
Whether DeepSeek’s efficiency will temper or turbocharge load growth
The woeful state of transmission buildout, despite demand for it
Why one quarter of Virginia’s power demand comes from data centers
Recommended resources
Latitude Media: Does DeepSeek call the data center boom into question?
Latitude Media: To get data centers online, one Virginia co-op is proposing a new business model
Reuters: Exclusive: Global solar capacity hits 2 TW on path to climate goal, data shows
Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor.
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