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Life cycle analysis has some problems.

About six months ago, a climate scientist from Arizona State University, Stephanie Arcusa, emailed me a provocative new paper she had published that warned against our growing reliance on life cycle analysis. This practice of measuring all of the emissions related to a given product or service throughout every phase of its life — from the time raw materials are extracted to eventual disposal — was going to hinder our ability to achieve net-zero emissions, she wrote. It was a busy time, and I let the message drift to the bottom of my inbox. But I couldn’t stop thinking about it.
Life cycle analysis permeates the climate economy. Businesses rely on it to understand their emissions so they can work toward reducing them. The Securities and Exchange Commission’s climate risk disclosure rule, which requires companies to report their emissions to investors, hinges on it. The clean hydrogen tax credit requires hydrogen producers to do a version of life cycle analysis to prove their eligibility. It is central to carbon markets, and carbon removal companies are now developing standards based on life cycle analysis to “certify” their services as carbon offset developers did before them.
At the same time, many of the fiercest debates in climate change are really debates about life cycle analysis. Should companies be held responsible for the emissions that are indirectly related to their businesses, and if so then which ones? Are carbon offsets a sham? Does using corn ethanol as a gasoline substitute reduce emissions or increase them? Scientists have repeatedly reached opposite conclusions on that one depending on how they accounted for the land required to grow corn and what it might have been used for had ethanol not been an option. Though the debate plays out in calculations, it’s really a philosophical brawl.
Everybody, for the most part, knows that life cycle analysis is difficult and thorny and imprecise. But over and over, experts and critics alike assert that it can be improved. Arcusa disagrees. Life cycle analysis, she says, is fundamentally broken. “It’s a problematic and uncomfortable conclusion to arrive at,” Arcusa wrote in her email. “On the one hand, it has been the only tool we have had to make any progress on climate. On the other, carbon accounting is captured by academia and vested interests and will jeopardize global climate goals.”
When I recently revisited the paper, I learned that Arcusa and her co-authors didn’t just critique life cycle analysis, they proposed a bold alternative. Their idea is not economically or politically easy, but it also doesn’t suffer from the problems of trying to track carbon throughout the supply chain. I recently called her up to talk through it. Our conversation has been edited for clarity.
Can you walk me through what the biggest issues with life cycle analysis are?
So, life cycle analysis is a qualitative tool —
It seems kind of counterintuitive or even controversial to call it a qualitative tool because it’s specifically trying to quantify something.
I think the best analogy for LCA is that it’s a back-of-the-envelope tool. If you really could measure everything, then sure, LCA is this wonderful idea. The problem is in the practicality of being able to collect all of that data. We can’t, and that leads us to use emissions factors and average numbers, and we model this and we model that, and we get so far away from reality that we actually can’t tell if something is positive or negative in the end.
The other problem is that it’s almost entirely subjective, which makes one LCA incomparable to another LCA depending on the context, depending on the technology. And yes, there are some standardization efforts that have been going on for decades. But if you have a ruler, no matter how much you try, it’s not going to become a screwdriver. We’re trying to use this tool to quantify things and make them the same for comparison, and we can’t because of that subjectivity.
In this space where there is a lot of money to be made, it’s very easy to manipulate things one way or another to make it look a little bit better because the method is not robust. That’s really the gist of the problems here.
One of the things you talk about in the paper is the way life cycle analysis is subject to different worldviews. Can you explain that?
It’s mostly seen in what to include or exclude in the LCA — it can have enormous impacts on the results. I think corn ethanol is the perfect example of how tedious this can be because we still don’t have an answer, precisely for that reason. The uncertainty range of the results has shrunk and gotten bigger and shrunk and gotten bigger, and it’s like, well, we still don’t know. And now, this exact same worldview debate is playing into what should be included and not included in certification for things [like carbon removal] that are going to be sold under the guise of climate action, and that just can’t be. We’ll be forever debating whether something is true.
Is this one of those things that scientists have been debating for ever, or is this argument that we should stop using life cycle analysis more of a fringe idea?
I guess I would call it a fringe idea today. There’s been plenty of criticism throughout the years, even from the very beginning when it was first created. What I have seen is that there is criticism, and then there is, “But here’s how we can solve it and continue using LCA!” I’ve only come across one other publication that specifically said, “This is not working. This is not the right tool,” and that’s from Michael Gillenwater. He’s at the Greenhouse Gas Management Institute. He was like, “What are we doing?” There might be other folks, I just haven’t come across them.
Okay, so what is the alternative to LCA that you’ve proposed in this paper?
LCA targets the middle of the supply chain, and tries to attribute responsibility there. But if you think about where on the supply chain the carbon is the most well-known, it is actually at the source, at the point of origin, before it becomes an emission. At the point where it is created out of the ground is where we know how much carbon there is. If we focus on that source through a policy that requires mandatory sequestration — for every ton of carbon that is now produced, there is a ton of carbon that’s been put away through carbon removal, and the accounting happens there, before it is sold to anybody — anybody who’s now downstream of that supply chain is already carbon neutral. There is no need to track carbon all the way down to the consumer.
We know this is accurate because that is where governments already collect royalties and taxes — they want to know exactly how much is being sold. So we already do this. The big difference is that the policy would be required there instead of taxing everybody downstream.
You’re saying that fossil fuel producers should be required to remove a ton of carbon from the atmosphere for every ton of carbon in the fuels they sell?
Yeah, and maybe I should be more specific. They should pay for an equal amount of carbon to be removed from the atmosphere. In no way are we implying that a fossil carbon producer needs to also be doing the sequestration themselves.
What would be the biggest challenges of implementing something like this?
The ultimate challenge is convincing people that we need to be managing carbon and that this is a waste management type of system. Nobody really wants to pay for waste management, and so it needs to be regulated and demanded by some authority.
What about the fact that we don’t really have the ability to remove carbon or store carbon at scale today, and may not for some time?
Yes, we need to build capacity so that eventually we can match the carbon production to the carbon removal, which is why we also proposed that the liability needs to start today, not in the future. That liability is as good as a credit card debt — you actually have to pay it. It can be paid little by little every year, but the liability is here now, and not in the future.
The risk in the system that I’m describing, or even the system that is currently being deployed, is that you have counterproductive technologies that are being developed. And by counterproductive, I mean [carbon removal] technologies that are producing more emissions than they are storing, and so they’re net-positive. You can create a technology that has no intention of removing more carbon than its sequesters. The intention is just to earn money.
Do you mean, like, the things that are supposed to be removing carbon from the atmosphere and sequestering it, they are using fossil fuels to do that, and end up releasing more carbon in the process?
Yeah, so basically, what we show in the paper is that when we get to full carbon neutrality, the market forces alone will eliminate those kinds of technologies that are counterproductive. The problem is during the transition, these technologies can be economically viable because they are cheaper than they would be if 100% of the fossil fuel they used was carbon neutral through carbon removal. And so in order to prevent those technologies from gaming the system, we need a way to artificially make the price of fossil carbon as expensive as it would be if 100% of that fossil carbon was covered by carbon removal.
That’s where the idea of permits comes in. For every amount that I produce, I now have an instant liability, which is a permit. Each of those permits has to be matched by carbon removal. And since we don’t have enough carbon removal, we have futures and these futures represent the promise of actually doing carbon removal.
What if we burn through the remaining carbon budget and we still don’t have the capacity to sequester enough carbon?
Well, then we’re going into very unchartered territory. Right now we’re just mindlessly going through this thinking that if we just reduce emissions it will be good. It won’t be good.
In the paper, you also argue against mitigating greenhouse gases other than carbon, and that seems pretty controversial to me. Why is that?
We’re not arguing against mitigating, per se. We’re arguing against lumping everything under the same carbon accounting framework because lumping hides the difficulty in actually doing something about it. It’s not that we shouldn’t mitigate other greenhouse gases — we must. It’s just that if we separate the problem of carbon away from the problem of methane, away from the problem of nitrous oxide, or CFCs, we can tackle them more effectively. Because right now, we’re trying to do everything under the same umbrella, and that doesn’t work. We don’t tackle drinking and driving by sponsoring better tires. That’s just silly, right? We wouldn’t do that. We would tackle drinking and driving on its own, and then we would tackle better tires in a different policy.
So the argument is: Most of climate change is caused by carbon; let’s tackle that separately from the others and leave tackling methane and nitrous oxide to purposefully created programs to tackle those things. Let’s not lump the calculations altogether, hiding all the differences and hiding meaningful action.
Is there still a role for life cycle analysis?
You don’t want to be regulating carbon using life cycle analysis. So you can use the life cycle analysis for qualitative purposes, but we’re pretending that it is a tool that can deliver accurate results, and it just doesn’t.
What has the response been like to this paper? What kind of feedback have you gotten?
Stunned silence!
Nobody has said anything?
In private, they have. Not in public. In private, it’s been a little bit like, “I’ve always thought this, but it seemed like there was no other way.” But then in public, think about it. Everything is built on LCA. It’s now in every single climate bill out there. Every single standard. Every single consulting company is doing LCA and doing carbon footprinting for companies. It’s a huge industry, so I guess I shouldn’t have been surprised to hear nothing publicly.
Yeah, I was gonna ask — I’ve been writing about the SEC rules and this idea that companies should start reporting their emissions to their investors, and that would all be based on LCA. There’s a lot of buy-in for that idea across the climate movement.
Yeah, but there’s definitely a fine line with make-believe. I think in many instances, we kid ourselves thinking that we’re going to have numbers that we can hang our hats on. In many instances we will not, and they will be challenged. And so at that point, what’s the point?
One thing I hear when I talk to people about this is, well, having an estimate is better than not having anything, or, don’t let the perfect be the enemy of the good, or, we can just keep working to make them better and better. Why not?
I mean, I wouldn’t say don’t try. But when it comes to actually enforcing anything, it’s going to be extremely hard to prove a number. You could just be stuck in litigation for a long time and still not have an answer.
I don’t know, to me it just seems like an endless debate while time is ticking and we will just feel good because we’ll have thought we measured everything. But we’re still not doing anything.
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On ‘precariously low’ oil stockpiles, China’s ammonia milestone, and a PFAS destroyer
Current conditions: The wildfires in France and Europe are slowing, but three firefighters have died and the looming heat wave could bring yet more disaster • New York and New Jersey are facing flash floods as a storm system makes its way across the Northeast United States • Days of thunderstorms are causing floods across Vientiane, Laos’ sprawling capital.
Last month, I toured Commonwealth Fusion Systems’ headquarters in small-town central Massachusetts. The place was abuzz in activity. On the factory floor side, workers were assembling the magnets needed to ultimately form the torus-shaped reactor — think a giant doughnut with an interior that curves like the core of an apple — called the tokamak. On the actual reactor side, SPARC — the prototype that CFS expects will make history next year as the first private enterprise and only tokamak to ever generate more energy that it took to start the fusion reaction — was starting to look like a functional machine from my view on a second-story walkway overlooking the sterile assembly room. The old joke that fusion is the energy source of tomorrow — and always will be — certainly didn’t ring as funny now. I’ll tell you who isn’t laughing: All the new investors that just poured another $1 billion into CFS. The company announced its latest funding round early this morning, which brings the startup’s total fundraising since its launch as a spinout from the Massachusetts Institute of Technology in 2018 to $4 billion. CFS now accounts for 30% of all the private capital that has flowed into fusion. What distinguishes this round, my colleague Katie Brigham wrote, is that the money is coming from a bunch of institutional investors, such as pension funds and sovereign wealth funds, rather than venture capitalists. On a call with reporters this week, CFS’s newly-named chief financial officer, Lorence Kim, said it’s the first-time institutional investors comprised the majority of the new funding. When I asked the company’s spokeswoman for a percentage estimate breaking down the new versus old investors in this round, she declined to comment. Kim cautioned that the funding isn’t the kind of capital you raise before launching on a stock market. But his hire is notable. The former Goldman Sachs banker famously helped take the pharmaceutical giant Moderna public and held the top financial role through the start of the Covid-19 pandemic.
Meanwhile, a federal Superfund site at a facility in Kentucky once used to enrich uranium for atomic bombs is being transformed into a data center. On Wednesday, the Department of Energy announced a deal between investment giant Brookfield, utility behemoth NextEra Energy, and three local power providers to redevelop portions of the Paducah site into a $100 billion data center campus. “By transforming former DOE sites into engines of innovation and economic growth, we can revitalize communities with increased tax revenue and thousands of jobs, while also strengthening America’s energy security,” Secretary of Energy Chris Wright said in a press release.
The Federal Reserve held the country’s benchmark interest rate steady at Wednesday’s meeting of the U.S. central bank’s top brass. But three bank presidents voted to increase rates as renewed fighting in Iran sent energy prices upward. The dissent “underscored officials’ fraying patience with looking past another price shock on the heels of tariff-related increases last year and with robust demand stemming from the artificial-intelligence buildout,” The Wall Street Journal reported. That is, of course, bad news for renewables and other clean energy developers who rely on cheap upfront money to build, as my colleague Matthew Zeitlin has written.
But there are potentially bigger problems afoot for American energy consumers. U.S. crude stockpiles fell sharply last week as American refineries ramped up production to seize on surging fuel prices as fighting erupted in Iran. The stocks have now reached “precariously low” levels, analysts told the Financial Times, meaning there’s far less cushion if the war worsens the supply shock.
Last month, the energy team at the liberal policy shop Third Way assembled 100 swing voters from across the country to talk about the data centers that poll after poll shows are becoming less and less popular, to put it mildly. The conclusion of the discussions was this: “America’s opposition to data centers has less to do with their feelings about artificial intelligence and more to do with their anger and distrust of large corporations and government.” The findings, shared with me exclusively in advance, showed that most participants were open to a new data center if they believed it would come with tangible benefits for their communities. While some investors, such as “Shark Tank” star Kevin O’Leary, have tried to present those offerings, “the trust isn’t there.” While Emily Becker, the director of Communications for Third Way’s Climate and Energy Program, told me she was “not surprised by how much opposition there was, what was heartening is people understood that benefits were possible. They just didn’t think they would receive them.”
Speaking of data centers and the public trust: NV Energy has accused one of the biggest developers of data centers in Nevada of attempting to illegally bypass state regulators to determine through private arbitration how and when the Berkshire Hathaway-owned utility should provide power to its operations. The lawsuit, filed Friday in Washoe County’s Second Judicial District Court, alleges that the developer, Tract, is trying to skirt the usual process by which the state Public Utilities Commission determines what share of the utility’s electricity should go to the large power user. Tract, according to the complaint, “wants NV Energy to reserve and provide enormous amounts of power for Tract's private development while shifting the infrastructure and energy costs to Nevada families, small businesses, and existing customers who did not cause them.” Sorting out those questions through arbitration would help to “keep these issues hidden” from state regulators and the public, NV Energy said, according to The Nevada Independent.
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When the Biden administration attempted to overhaul regulations on electrical transformers to make the key grid components more efficient, the proposal drew fierce bipartisan pushback amid a years-long nationwide shortage of the equipment. Ultimately, the Biden administration backed down and changed the proposal after receiving public comments. That would have seemed to provide some certainty for factories. But just two years after the final rule won acclaim from across the industry, the Trump administration is now considering revising the requirements for rules set to take effect in 2029. “We’re not aware of anyone asking for this,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, told Utility Dive. The group supported the 2024 transformer rule and other stricter efficiency requirements DOE finalized during the Biden administration.
China has signaled it’s planning to take on what Bloomberg described as a bigger role in steering global negotiations over climate change. The 15th five-year plan published Monday by the Ministry of Ecology and Environment and other key agencies outlines how Beijing “will constructively lead the multilateral governance process to address climate change” and states that “China’s influence, guiding capacity, shaping power, and moral appeal in global climate governance will be significantly enhanced” through the end of the decade. Beijing is already looking to increase how much renewable energy it consumes, as I told you last week.
As you may recall, China is going all in on figuring out how to make green hydrogen work, especially now that the People’s Republic is throwing everything at the wall to diversify its domestic supply of fuels as the Iran War chokes off its regular supply of hydrocarbons. One of the trickier questions with green hydrogen is how to ship the world’s small molecules without leaks. A popular solution is to convert the hydrogen into green ammonia. On Tuesday, SPIC Green Energy announced the successful loading of 3,750 metric tons of green ammonia produced in Jilin Province onto a vessel at the Lianyungang Port in Jiangsu Province and shipped to South Korea. “The shipment represents the world’s largest single-batch delivery of green ammonia,” analyst Jian Wu wrote in his China Hydrogen Bulletin newsletter. “It marks China’s transition from technical demonstration to large-scale international commercial delivery.”
A company promising to put an expiration date on so-called forever chemicals just raised a bunch of money to bring its technology to market. Claros Technologies is developing a proprietary system that can break down the per- and polyfluoroalkyl substances, or PFAS, contaminating millions of Americans’ drinking water systems. This week, the startup closed a $55 million Series B financing round. “Over the past year, Claros has crossed the threshold from breakthrough technology to successful commercial reality,” CEO Michelle Bellanca said in a statement.
Risk-averse but deep-pocked institutional investors join the party.
When the Fusion Industry Association surveyed the sector earlier this month, it found that the industry’s 56 active companies had collectively raised more than $14.2 billion over the past five years. But an ever-larger share of that money is ending up in the hands of one startup: Commonwealth Fusion Systems.
With its latest $1 billion funding round, announced today, the MIT spinout now accounts for nearly 30% of all capital in the industry. The new financing, led by a wave of institutional investors entering the sector for the first time, will support construction of the company’s first commercial power plant in Chesterfield County, Virginia, which CEO Bob Mumgaard says is on track to come online in the early 2030s.
In a media briefing, Mumgaard noted that this latest raise marks “the largest single funding round among fusion energy companies since our last large round of $1.8 billion in 2021.” It brings the total capital raised by CFS to an even $4 billion as the company races to complete construction of SPARC, its demo reactor. If all goes according to plan, it should begin operating sometime next year, proving out the physics and engineering approach underpinning ARC, the planned commercial plant.
The new financing deviates from the typical venture capital round, as it brings in a broad but unnamed mix of “large pension funds, sovereign wealth funds, infrastructure funds doing project finance, and industrial corporates.” These risk-averse investors would typically steer clear of expensive, first-of-a-kind facilities, demonstrating the degree to which CFS has succeeded in building confidence in an industry long critiqued for overpromising and underdelivering.
The company credits the trust it built to its extensive peer-reviewed research as well as its decision to build a tokamak — widely regarded as the most mature fusion reactor design. “I don’t think there’s any other company that’s been as transparent and open with their physics and how it actually works,” Katie Rae, CEO and managing partner at Engine Ventures, told me. Rae has participated in every one of CFS’s funding rounds, and while she says her firm has evaluated virtually every startup in the sector, the company remains its only fusion investment.
But even flush with institutional capital, Mumgaard is clear that the company will need billions more to fully finance ARC and the numerous reactors to follow. It’s unclear where exactly that money will come from, though he’s pushing for government involvement. Alongside the Fusion Industry Association, Mumgaard is advocating for a one-time, roughly $10 billion federal infusion of cash into the broader industry to expand public-private partnerships, build shared research infrastructure, and help finance first-of-a-kind plants in an effort to keep pace with China’s rapidly growing fusion program.
According to reporting from Politico, a Department of Energy official told CFS and other fusion companies that such a level of federal funding is “unrealistic in this environment.” But though insiders argue it’s what the industry needs to scale, Rae says CFS doesn’t depend on it. “I think it is the right kind of investment to make, but we didn’t count on it from an investor perspective,” she told me.
One obvious alternative is the public markets. The IPO window for climate tech has reopened, with geothermal giant Fervo and nuclear fission startup X-energy both completing successful public offerings in recent months. SPACs have also made a comeback, as numerous nuclear companies are opting for this faster, though riskier, path to the public markets. But CFS’s newly appointed CFO, Lorence Kim, said during the briefing that this latest round proves “that the private markets have a lot of capital to deploy toward our mission.” Whether an IPO is in the company’s near future remains an open question, though he cautioned against interpreting his hiring as any indication of “IPO prep in a specific way.”
For what it’s worth though, Kim has taken another high-profile, pre-revenue startup public before: Moderna. As CFO from 2014 to 2020, he helped the company scale its mRNA platform and lead its blockbuster $600 million IPO in late 2018 — the largest ever in the biotech industry at the time. Notably, this all happened before Moderna had an approved product or the Covid pandemic made its signature vaccine a household name, similar to where Commonwealth finds itself today.
“Moderna was in this moment in time where the science worked, and the strategy was focused on execution and scale and deploying capital in a way that could enable real impact on the world,” Kim explained. CFS is now at the same juncture, he said. “And so in the same way that Moderna industrialized mRNA and made it inevitable and made it ubiquitous, it was really clear to me that CFS could do the same for fusion.”
Of course, CFS is not alone in its confidence — other fusion companies are equally bullish on their own approach. Take Inertia Enterprises, a Lawrence Livermore National Laboratory spinout, which last week unveiled its own commercial roadmap for a laser-driven fusion reactor. The company emphasized it’s the only one to have definitively demonstrated the viability of its underlying physics in a real-world experiment, rather than through theoretical work or simulations.
Or take Helion, which has raised $1.5 billion and secured a highly ambitious power purchase agreement with Microsoft to supply electricity to the tech giant by 2028. Or Pacific Fusion, which netted a staggering $900 million Series A to be doled out in milestone-based tranches. There are dozens of others — many with hundreds of millions in funding — pursuing a range of approaches that some of the field’s brightest minds consider technically feasible.
But when I mused to Rae about how exciting it is that institutional investors now appear willing to back an industry once viewed as bordering on science fiction, she was quick to correct me.
“They’re willing to bet on Commonwealth Fusion — that’s what you mean.”
At least one hyperscaler’s big bets seem to be paying off.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
Good evening. Let’s start with the news. Meta and Microsoft released their most recent quarterly earnings this evening, and Wall Street was watching to figure out if their enormous AI spending plans are paying off. We were watching because those proposals are shaping one of the most important energy stories today: the data center boom and the sharp return of electricity demand.
The returns were … mixed. Meta missed analysts’ estimates, and its profit fell 14% from the same quarter a year earlier. It increased the lower bound of how much it plans to spend on capital expenditures such as data centers this year, from $125 billion to $130 billion, but left the upper bound of $145 billion unchanged.
Microsoft, meanwhile, said its AI investments are starting to pay off. Revenue at its cloud business, which uses its data center space, increased by 43%, more than analysts expected. It spent $41 billion on capital expenses in the three months ending in June.
Meta’s stock was down 7% in after-hours trading, while Microsoft is up 8%. When Heatmap surveyed climate insiders last year, they ranked Microsoft as among the most decarbonization-friendly hyperscaler and Meta as among the worst.
Permitting odds up — thanks to Shift Key?
I do not regularly follow such things, but this afternoon I was told that the Kalshi market for “Will permitting reform become law this year?” surged to 77% today after trading for days around 50%:
I have no idea why it budged today, but perhaps what moved the market was our new episode of the Shift Key podcast (Apple, Spotify). On today’s show, I spoke with Daniel Palken, a former Capitol Hill policy staffer now at Arnold Ventures, about the current state of permitting reform negotiations in Congress. While we don’t know the exact shape of a deal yet, permitting reform is likely to be the biggest new policy for clean energy that we could get by the end of the year.
Daniel is a fantastic guide to the negotiations, and if you’re curious about the policy at all, I recommend that you listen. Here are few of my takeaways from the conversation:
1. A permitting reform deal will probably have six buckets.
They are (1) changes to the National Environmental Policy Act and the judicial review process that environmental studies face after completion; (2) reforms to the transmission process; (3) changes to the Clean Water Act; (4) a deal to make it harder for presidents to yank permits from approved projects; (5) changes to the National Historic Preservation Act, and (6) “everything else,” a grab bag of smaller fixes including to geothermal energy.
2. Wonky committee politics are shaping the deal.
The National Historic Preservation Act, for instance, is an archeological law that hasn’t been in the mix for previous reform proposals. It’s up for discussion now because Senator Mike Lee of Utah chairs the Senate Energy and Natural Resources Committee — and the NHPA is the major environmental bill under his jurisdiction. Likewise, observers think that a permitting deal has a much better shot of passing during this Congress (as compared to next year) because of an expected series of changes to committee chairs.
3. It’s way, way better to hook data centers to the power grid than run them off behind-the-meter power plants — even if they run off 100% natural gas.
Any permitting reform proposal will seek to expand the transmission system. That could have big benefits for the emissions intensity of data centers. Why? I’ll let Daniel explain:
If you look at the data centers that are hooking up off grid — when they’re not using repurposed jet engines, they’re using 20% thermally efficient gas plants. Whereas if you’re hooked up to the grid, there’s really two types of gas plants that live on the grid. There’s like 60% efficient combined-cycle gas turbines, which are most of the gas power that’s generated, and then there’s peaker [plants], which have low efficiency, but are run at capacity factors of like 5% — so from an emissions perspective, they don’t matter all that much.
So even if solar and wind didn’t exist at all, and nuclear didn’t exist, and hydro didn’t exist, it would still be a much, much cleaner option [to connect data centers to the power grid]. Like we’re talking factors of three in efficiency to connect your data center to the grid if it was purely powered by gas, which is, I think, an important point to understand.
I thought that was an interesting point, and while I’d seen some of those ideas in isolation, I’d never seen them laid out in one place. (And even if grid-scale gas plants are much more efficient than behind-the-meter plants, it’s still even better to power data centers with solar, batteries, and other clean firm power plants — which is also easier when they’re hooked up to the grid.)
I’ll stop glossing the episode and just link to it one more time. Thanks for reading.