In the new world of EVs and AI

In the new world of EVs and AI, renewable green energy means more gas or coal capacity, not less

Story by David Blackmon

A fossil power plant in Georgia generating electricity. More and more it is being acknowledged that EVs and computing will push up electricity demand, requiring more fossil plants to back up renewables – Mike Stewart/AP© Provided by The Telegraph

It is no secret that the expanding suite of AI technologies are becoming powerful drivers of additional demand for electricity. They are, simply put, enormous energy hogs. This technological revolution seems destined to soon overwhelm and dominate almost every aspect of modern society, but there’s a catch: It is taking place simultaneously with coordinated efforts by national and international governments to prematurely do away with some of the cheapest and most abundant forms of 24/7 power generation.

The energy hogs, in other words, are lined up at the electricity trough, but that trough is being forced to run dry by ill-considered public policies. Popular Science published an excellent analysis on March 25 detailing AI’s exploding power demands and how developers are responding to the growing challenge of sourcing the generating power they will need. The challenge is illustrated in a recent report by the IEA that estimates the AI models and cryptocurrency mining operations could result in a doubling of power demands from data centers globally. Another recent study estimates that “energy demands from AI servers in 2027 could be on par with those of Argentina, the Netherlands or Sweden combined.”

Those findings are in line with remarks made by Open AI CEO Sam Altman during a panel discussion at January’s WEF conference in Davos. There, Altman is quoted as saying AI’s “enormous” energy needs will require a “breakthrough” in low carbon generation technology soon.

“We still don’t appreciate the energy needs of this technology,” Altman told attendees. “There’s no way to get there without a breakthrough. We need [nuclear] fusion or we need radically cheaper solar plus storage or something at massive scale.”

But getting to a new, radical solution at massive scale will inevitably take many years to accomplish. Unfortunately, AI, cryptocurrency mining and – much more so – electric vehicle charging, along with normal population and economic growth, are set to require a doubling or more of generation capacity in the near term. If the power isn’t there, the technologies can’t progress according to plan.

Complicating matters for power providers is the drive by governments at all levels to force retirement, often prematurely, of some of the most reliable, plentiful, and affordable forms of generation. For the past decade, this drive has focused mainly on forcing coal-fired power plants off the grid and replacing them mainly with less-emitting natural gas plants. More recently, however, the drive to lower emissions has begun to focus increasingly on also retiring gas-fired plants.

Earlier in March, Utility Dive reported on a looming crisis in adequate generation capacity that is being set up by this forced march to lower atmospheric carbon by a microscopic fraction, noting that as much as 58 GW of coal and natural gas generation in the PJM market of the Eastern US is set to be forcibly retired by 2030 without identified replacement capacity in sight – this according to the PJM market monitor. PJM, for those who don’t know, is the regional transmission organization (RTO) that manages the transmission infrastructure in the Eastern Interconnection grid for 13 Eastern states and the District of Columbia. A forced shortage of generation in the PJM market means no AI. Come to think of it, it would also mean no federal government, which might not be all that bad a thing.

Proponents of this obsession over carbon dioxide will invariably claim the difference can all be made up with more wind and solar. But former US Energy Secretary Ernesto Moniz, an appointee of President Barack Obama, told attendees at an event in Texas that goal could be unattainable, saying, “We’re not going to build 100 gigawatts of new renewables in a few years.” Moniz further pointed out that rapidly rising demands stemming from expansion of AI, crypto-mining and EV charging would need to be met by more coal and natural gas generation, not less of it.

This premature retirement phenomenon is not isolated to the PJM market region. It’s happening everywhere.

The problem is that renewables can reduce the amount of gas or coal burned in thermal power stations. They cannot eliminate the need for those power stations to be there when the sun isn’t shining and the wind isn’t blowing. That means that increased electricity demand, driven by computing and EVs, means more fossil capacity – not less. Nuclear fusion is a dream of the future, and many still believe it is one for a quite distant future, as it has always been. Modular fission reactors are being developed on several different fronts and promise to become a viable solution that could begin to be scaled up sometime in the 2030s.

For the near term, though, it is increasingly obvious – even to AI developers who’ve made their own net-zero by 2050 pledges – that we’re going to need more, not less, coal and natural gas generating capacity to meet demand when renewables can’t. Now, it’s up to policymakers to try to catch up to reality, and deal with it