Artificial Intelligence Poses Threat to the Integrity of America's Power Grid
A watchdog for the utility sector highlights concerns about grid reliability, stating that a surge in electricity demand could pose issues across the United States and Canada. The North American Electric Reliability Corporation, in a recent report, indicates that electricity demand is growing at an unprecedented pace within the past two decades, while over 115 gigawatts of coal-fired capacity is due to shut down within the next decade. This was initially reported by the Financial Times.
John Moura, director of reliability assessment at NERC, commented, "We are witnessing a period of significant transformation." The report predicts an 15% rise in peak summer demand, equating to 132 gigawatts, within the subsequent decade. This represents a substantial increase from the 80 gigawatts projected in NERC's previous report, attributing this increase to the rapid expansion of data centers for AI and crypto mining, the proliferation of electric vehicles, and the widespread use of heat pumps. Correspondingly, peak winter demand is projected to rise by 149 gigawatts, representing a 18% growth, compared to the previous estimate of 92 gigawatts.
It is widely recognized that infrastructure projects in the United States advance at a leisurely pace, so it should come as no surprise that the existing electrical grid was not designed to cater to a world with everything operating on batteries. Previously, peak demand typically referenced the hours when residents were at home, with some appliances in use. However, when people return home, they are likely to be charging their electric vehicles' substantial battery packs or utilizing heat pumps, which consume substantial energy.
According to EnergySage, a typical heat pump found in a standard home consumes about 5,475 kilowatt-hours per year, sufficient to power nine full-sized refrigerators constantly or energy an electric Tesla Model 3 for 15,000 miles. Given this added strain on the grid, energy production must increase, but the power lines and transformers also require upgrades.
Tech giants, such as Meta and OpenAI, have been investing heavily in new data centers for AI, but its practicality remains to be seen. One benefit of this boom is the renewed interest in nuclear energy, given that solar and wind capacity cannot meet current demands, and most grids lack energy storage for later use. Technocrats argue that it's time to re-embrace nuclear energy as a clean, abundant energy source, proposing to locate data centers near nuclear plants to alleviate strain on the grid.
Despite nuclear energy's advantages, waste management remains challenging, with an extended period required for decay, as well as the unresolved question of whether the general public has forgotten past disasters and is ready to coexist with nuclear reactors in their communities.
Previously, electric vehicles themselves were proposed as a potential solution to grid issues, capable of supplying power to homes during peak demand or sending energy back to the grid. However, bidirectional systems have not gained widespread acceptance by automakers or electrical utilities.
Impulse Labs, a startup specializing in the development of induction stovetops, has incorporated a battery into its product, believing it could be used to store energy, ensuring that households do not simultaneously access the grid, with the battery gradually charging from the grid and supplying energy as required. The company postulates that widespread adoption of products like Tesla's Powerwall, a stationary home battery, is hindered by its high cost and appeal to doomsday preppers. By integrating a battery into a standard household appliance, Impulse Labs believes it has discovered a backdoor solution to address grid issues.
NERC warns that, under existing conditions, a deficiency in energy capacity could leave supply buffers falling below required levels in nearly every U.S. jurisdiction over the subsequent decade. "Most of the North American [bulk power system] faces mounting resource adequacy challenges over the next 10 years as surging demand growth continues and thermal generators announce plans for retirement."
The rapid expansion of data centers for AI and tech industries, along with the increase in electric vehicles and the widespread use of heat pumps, is predicted to drive a 15% rise in peak summer demand for electricity within the next decade. This transformation in energy consumption highlights the need for tech companies to invest in sustainable energy solutions, such as nuclear power, to meet the growing demand and alleviate strain on the grid.
