Energy Gang

The rise of AI means surging investment in electricity supply. What will that mean for customers?

Sep 3, 2024

The podcast dives into the surge in electricity demand fueled by AI, highlighting challenges utilities face in meeting this rising need. Innovative pricing structures and tailored rate classes are essential for large consumers. The discussion emphasizes community trust and collaboration between tech companies and utilities in energy projects. It also explores balancing immediate power needs with long-term sustainability goals, along with the potential for reduced electricity costs amid changing policies. Innovative solutions like carbon capture and clean transition initiatives are key components for a sustainable future.

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Quick takeaways

The increasing demand for electricity driven by AI and data centers necessitates substantial investments in energy infrastructure to ensure reliability.

The complexity of cost allocation for expanding energy supply places significant pressures on utilities and regulators, particularly in states like Texas and Georgia.

Emphasizing innovative regulatory approaches and clarity in energy policy is essential to address capacity constraints and harness growth opportunities effectively.

Deep dives

Introduction to Cloverleaf Infrastructure

Brian Janis, co-founder of Cloverleaf Infrastructure, shares insights on his career journey in the energy sector, highlighting his previous experience at Microsoft. His dual background in finance and philosophy has provided him with a solid understanding of the intricate systems governing the energy market. The motivation behind founding Cloverleaf was based on recognizing significant challenges in the electrical infrastructure as it struggles to keep pace with the growth demands of industries reliant on energy. Janis emphasizes the importance of addressing power supply constraints to support burgeoning technologies like AI and data centers.

Passion Fuels Innovation in Energy Systems

01:29

Intro

3min

Navigating the Electric Demand Surge

23min

Electricity Demand and Data Center Integration

6min

Innovative Rate Structures and Community Engagement in Energy Investment

5min

Balancing Power Needs and Emissions

20min

Navigating the Future of Electricity Costs Amidst Policy Changes

5min

Accelerating Innovation for a Sustainable Energy Future

2min

Growing Flexibility and Energy Efficiency

4min

The need to meet increased demand while cutting emissions is exposing some fundamental issues in the industry.

It’s common knowledge that data centers use a lot of energy, and will use even more in the future as AI applications develop. One thing is not clear, though: who will end up paying for all that extra electricity?

US utilities typically used to receive perhaps one or two large customer requests – meaning 20 megawatts or more – each year. Now, they may be receiving one or two of those requests every week. The need for increased electricity supply means increased investment in generation, transmission and distribution. And that investment has to be paid for. So who is going to end up picking up the tab?

To find out more, Ed Crooks is joined by regular guest Dr Melissa Lott, a professor at the climate school at Columbia University, and Brian Janous, co-founder and CEO of Cloverleaf Infrastructure, which develops sites that can support large energy-dense users such as AI data centers and chip manufacturing plants. With 12 years previously leading energy strategy for Microsoft, Brian is well placed to answer the big questions on energy demand, investment and customers’ bills.

With Melissa and Ed, he explains how the industry can balance the need to increase supply with the need to achieve decarbonization targets. What role does flexibility play in a highly electrified system, and how can it be leveraged to enhance grid reliability and resilience? Can the ambitious sustainability goals of tech companies like Microsoft and Google be achieved in the face of their rapidly growing demand for power, and what compromises might need to be made? And is nuclear power a source of 24/7 clean energy that could plug the demand gap? The gang debate its efficacy as a long-term solution to the energy needs of Big Tech.

Meeting the energy demand for AI is a complex topic. The Energy Gang will be exploring it further in a special episode recorded live at New York Climate Week, September 22-29. If you can’t make it to New York for what is one of the energy industry’s biggest events of the year, subscribe to the show so you don’t miss the discussion.

Ed and regular guest Amy Myers-Jaffe of NYU will be speaking with Caroline Golin, Global Head of Energy Market Development and Innovation at Google, and Kate Gordon, the CEO of CA FWD, a statewide organization dedicated to building a more sustainable, resilient and inclusive economy in the state of California.

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