April 15, 2024
A.I

Growing energy demand from AI and cryptocurrencies poses a threat to the grid

This article is a local version of our Energy Source newsletter. Sign up here to receive the newsletter directly to your inbox every Tuesday and Thursday.

Good morning and welcome back to Energy Source, from New York.

President Joe Biden is delaying plans to approve what would be the country’s largest natural gas export terminal, as he faces growing pressure from climate activists, according to a New York Times report yesterday.

The White House is now demanding that the Department of Energy conduct an environmental review of Calcasieu Pass 2, a $10 billion Venture Global project, before it can be approved. CP2 is one of 17 proposed natural gas export terminals in the U.S. and a delay could have ripple effects on other projects in the pipeline.

Venture Global sharply criticized the Biden administration following the report, accusing the White House of “trying to force policymaking through leaks to the media.”

“This continues to create uncertainty about whether our allies can rely on U.S. LNG for their energy security,” said Venture Global spokesperson Shaylyn Hynes. “If this leaked report from anonymous White House sources is true, it appears the administration may be imposing a moratorium on the entire US LNG industry.”

In an election year, the president is walking a tightrope on climate and energy security, launching ambitious climate rules while backtracking on commitments to curb fossil fuel production. Last year, the United States overtook Australia to become the largest exporter of liquefied natural gas.

Today’s newsletter looks at the vast amounts of electricity needed to power our artificial intelligence, crypto mining, and internet usage.

Thank you for reading.

-Amanda

The rise of AI and cryptoelectricity

Our ever-expanding digital footprint is consuming so much power that it is causing alarm from regulators and backlash from environmentalists.

By 2026, global data center electricity demand could exceed 1,000 terawatt hours, more than double 2022 levels, according to an International Energy Agency report released yesterday. Energy-hungry facilities consumed 460 TWh of electricity in 2022, about 2 percent of the global total, although the proportion is much higher in certain countries.

Data centers are the backbone of our digital lives, supporting everything from our photos in the cloud to patient data in hospitals. Their 24/7 operations and large cooling systems require large amounts of energy, and the recent rise of artificial intelligence and cryptocurrency is helping to drive the industry’s electricity consumption to levels never seen before. . ChatGPT, for example, uses almost 10 times more electricity than Google search, according to the IEA.

The energy watchdog warned that “the rapid expansion of the data center sector and high demand for electricity may pose challenges for the electricity system” and called for further improvements in efficiency and greater regulation.

Jim Robb, chief executive of the North American Electric Reliability Corporation, a regulator, told the Financial Times that the explosion in data centers is “very, very real” and utilities are struggling to keep up. Along with the deployment of electric vehicles and industrial relocation, the growth of data centers is putting some power grids in the United States at “high risk” of outages, particularly during weather events.

However, the risks will not be felt uniformly. About 33 percent of the world’s data centers are located in the United States, the IEA estimates. Another 16 percent are in Europe. In Ireland, data centers will account for almost a third of the country’s electricity demand by 2026.

“You couldn’t have a modern society without data centers, but it’s fair to criticize that certain locations have taken more than their share,” said Rob Elder, chief commercial officer at Bulk Infrastructure, which is building data centers in Norway, a destination attractive. for companies due to its large amount of renewable energy.

The rise of data centers is also worrying local residents and environmentalists around the world, who fear construction is damaging the natural landscape and diverting supplies of renewable energy and water from other uses.

“It’s not a cloud. It is not some ethereal and original thing in the sky. “It’s these huge concrete boxes that require all this energy and are taking up our green space,” said Elena Schlossberg, coordinator of the Coalition to Protect Prince William County, a group protesting data center development in the north. of Virginia, the largest data center market in the United States.

“We are not Luddites. . . We don’t consider ourselves anti-data centers, we just want data centers to be done the right way,” said Dylan Murphy, an activist with Not Here Not Anywhere, an Irish climate group.

Economic developers and industry members argue that data centers have made great strides in improving energy efficiency and have been early leaders in deploying renewable energy on the grid.

New EU rules this year require operators to report their energy use and emissions from data centers. Meanwhile, the United States is demanding that the federal government study the industry’s energy and water use, and China wants data centers owned by public organizations to run entirely on renewable energy by 2032.

“We won’t be able to decarbonize without digitalization,” said Garry Connolly, founder of Host in Ireland, an industry group. “There is no doubt that the challenges of Ireland’s partnership with data must be addressed and aligned as we create and develop the renewable resources available to us.”

Work movements

  • The largest copper producer in Europe Aurubis has fired three of its senior managers, including the CEO Roland HaringsCFO Rainer Verhoevenand director of operations Heiko Arnoldoafter a fraud scandal.

  • Ionic rare earthsmetal supplier, named Brett Lynch as executive president. Lynch previously served as CEO of Sayona Mining.

  • Energy Recoveryenergy efficiency technology manufacturer, named David Luna as president and CEO. Moon previously served as president of Carrier Commercial Refrigeration.

  • Technip Energiesa French company focused on the energy transition, named Loic Chapuis as director of operations and Marco Villa as commercial director.

Power suppliers


Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu and Tom Wilson with support from the Financial Times’ global team of reporters. Contact us at energy.source@ft.com and follow us on @FTEnergy. Catch up on previous editions of the newsletter here.

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