There has been a lot discussed in the media lately about Artificial Intelligence (AI) and its derivatives, namely AI data centers and their requirement for massive amounts of electricity.
According to U.S. Energy Information Administration, in 2023, fossil fuels remained the most common fuel type for electricity generation in the U.S. accounting for approximately 60%. The remaining 40% was split about equally between nuclear energy and renewable energy. U.S. power usage is projected to grow by 4.7% annually over the next five years which is almost double from a previous estimate of 2.6%.
One of the larger contributors of this growth is the construction explosion of hyperscale data centers resulting from AI demand. These data centers require exponentially more power than traditional data centers. In 2022, data centers globally consumed about 460 terawatt-hours and are expected to consume more than 1,000 TWh in 2026. To put some perspective around it, this is roughly equivalent to the electricity consumption of Japan. Additionally, estimates that data center “Critical IT” demand will surge from 49 gigawatts in 2023 to 96 GW by 2026 of which AI will consume approximately 40 GW. Again, some perspective - a power plant with a capacity of 1 GW could power approximately 876,000 households for one year if they collectively consume 10,000 kWh each, assuming the plant operates continuously throughout the year.
With data center development booming across the U.S. thanks to AI, global capacity is estimated to double by 2030. Getting enough power is going to be an enormous obstacle, let alone the improbability of renewables providing the lion share of this power.
On April 9th, Ms. Smith posted, very aptly (and I paraphrase) “….. a group of people have no desire to ever be inconvenienced by the truth”. Well, the inconvenient truth is this: data center growth fueled largely by AI proliferation is going to create a tremendous conundrum for an already overtaxed grid. There is no way on God’s green (renewable) earth this insatiable demand for more electricity can even come close to being realized WITHOUT fossil fuels. Period. The math is pretty simple. The transformation to cleaner energy will take a lot longer than the inconvenienced truth crowd realizes. Hang tight!
Have a great week!
Tiger01
