The demand for power to support advanced technology like Generative AI is outpacing the expansion of U.S. electrical systems, leading data center businesses to take matters into their own hands, executives revealed at an energy conference in New York.
Layers of regulations, permitting processes, and legal battles have hindered new power projects from connecting to the grid, causing traditional power companies to struggle to keep up with the rapidly growing power needs of technology companies.
Brad Stansberry, from services firm KPMG, criticized the regulatory environment in the United States, calling it “abysmal” at the AI: Powering the New Energy Era summit in Washington. Data center businesses, such as Aligned, are now bypassing utilities and seeking direct deals with power generators or building their own power supplies.
Phill Lawson-Shanks, Chief Innovation Officer at Aligned, highlighted the challenges they face in securing power supplies, leading them to consider using small modular reactors or nuclear energy systems for their projects.
Power companies are also feeling the pressure to meet the electricity needs of technology companies supporting AI applications like ChatGPT, which require significant energy resources. Michael Keyser, from the National Renewables Cooperative Organization, noted the difficulty in getting new power projects built quickly, leading tech companies to pursue their own power purchasing options.
Despite the challenges, regulated power utilities are optimistic about the growth opportunities presented by the surge in demand for power by technology companies. Brian Bird, from NorthWestern Energy, expressed hope that technology companies leading the way in power generation would ultimately benefit the utilities.
As the demand for power continues to rise, the energy industry faces a critical juncture in meeting the needs of technology companies driving the digital revolution.
