Sunday, March 24, 2024

"Big Tech’s Latest Obsession Is Finding Enough Energy"

From the Wall Street Journal via Yahoo Finance, March 24:

Every March, thousands of executives take over a downtown hotel here to reach oil and gas deals and haggle over plans to tackle climate change. This year, the dominant theme of the energy industry’s flagship conference was a new one: artificial intelligence.

Tech companies roamed the hotel’s halls in search of utility executives and other power providers. More than 20 executives from Amazon and Microsoft spoke on panels. The inescapable topic—and the cause of equal parts anxiety and excitement—was AI’s insatiable appetite for electricity.

It isn’t clear just how much electricity will be required to power an exponential increase in data centers worldwide. But most everyone agreed the data centers needed to advance AI will require so much power they could strain the power grid and stymie the transition to cleaner energy sources.

Bill Vass, vice president of engineering at Amazon Web Services, said the world adds a new data center every three days. Microsoft co-founder Bill Gates told the conference that electricity is the key input for deciding whether a data center will be profitable and that the amount of power AI will consume is staggering.

“You go, ‘Oh, my God, this is going to be incredible,’” said Gates.

Though there was no dispute at the conference, called CERAWeek by S&P Global, that AI requires massive amounts of electricity, what was less clear was where it is going to come from.

Former U.S. Energy Secretary Ernest Moniz said the size of new and proposed data centers to power AI has some utilities stumped as to how they are going to bring enough generation capacity online at a time when wind and solar farms are becoming more challenging to build. He said utilities will have to lean more heavily on natural gas, coal and nuclear plants, and perhaps support the construction of new gas plants to help meet spikes in demand.

“We’re not going to build 100 gigawatts of new renewables in a few years. You’re kind of stuck,” he said.

The complication is that companies don’t just want to add new power sources, but clean one, too. Many tech companies and utilities have made commitments to dramatically reduce the carbon emissions they produce.

Dominion Energy, a utility company based in Richmond, Va., has seen a sharp uptick in electricity demand driven by a build-out of data centers in northern Virginia, which has long been home to a large concentration of such facilities. The company, which has set a goal to eliminate or offset its carbon emissions by 2050, expects to build at least one gas-fired power plant to support it....