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What happens when you can’t run and you can’t hide?
You did everything right.
You had your go-bag ready and you knew your evacuation route. You monitored the wildfire as it moved closer and closer to your home, and you kept the volume turned up on your phone so you could heed a “LEAVE NOW” notice if one came. When it finally does, jolting you awake in the middle of the night, you realize that you can smell the smoke inside. When did the fire get so close?
The power is out, so you make your way downstairs using your phone’s flashlight. You have to Google how to manually open the garage door since the electronic clicker doesn’t work (oh, so that’s what the red cord is for). Your heart is thumping, but you’ve made it, you’re in your car; you even remembered to keep it filled to half a tank in preparation. You pull out of your driveway and onto the dirt road that leads out of your rural neighborhood. The night sky ahead of you is a weird neon orange.
You have to hit your brakes when you reach the intersection at the main road. It’s completely backed up with other evacuees, their red taillights stretching ahead through the thickening smoke as far as your eye can see. Some of your neighbors are pulling their boats on trailers; there is an RV up ahead. And you can see the fire burning down the side of the hill now — toward you, toward the gridlocked traffic that isn’t moving.
Harrowing Fort McMurray wildfire escapeyoutu.be
Leaving your home is only the beginning of a wildfire evacuation. But the next step — the drive to a safe location — is usually given no more attention in preparedness guides than the reminder to “follow the directions of emergency officials.” In the best-case scenarios, where communication is clear and early and residents are prepared, that might be enough. But when communication breaks down, or fires move fast and unpredictably, traffic can reach a dangerous standstill and familiar roads can transform into death traps.
In 2015, some 20 vehicles were overcome by a fire while stuck in a traffic jam on Interstate 15 between Los Angeles and Las Vegas; on the same interstate in Utah five years later, a backup nearly became deadly as a fire burned up to the road’s shoulder and panicked travelers abandoned their cars. Fire evacuations in New South Wales, Australia, in 2020 resulted in a 10-hour backup, and Canada’s Highway 3 had bumper-to-bumper traffic earlier this month because it was the only road out of imperiled Yellowknife. In 2020, some 200 people had to be evacuated by helicopter from California’s Sierra National Forest after a fire cut off their only exit route.
And when people die in wildfires, they are often found in their vehicles. In Portugal, 47 of the 64 people killed during a 2017 forest fire were in their cars, trying to escape. At least 10 people were found dead in or near their cars after the 2018 Camp fire, the deadliest blaze in California’s history. And in Lahaina, Hawaii, this month, in what the Los Angeles Times has called “surely … the deadliest traffic jam in U.S. history,” the lack of advanced warning combined with inexplicably blocked roads led an untold number of people to perish in their cars while trying to evacuate, including a 7-year-old boy who was fleeing with his family; a man who used his last moments attempting to shield a beloved golden retriever in his hatchback; and a couple who were reportedly found in each other’s arms.
In a best-case scenario, emergency managers are able to phase evacuations in such a way that the roads don’t get backed up and residents have plenty of time to make it to safety. But wildfire is anything but predictable, and officials who call for an evacuation too soon can risk skeptical residents deciding to take a “wait and see” approach, where they only get in their car once things start to look dicey. In one 2017 study, only a quarter of people in wildfire-prone neighborhoods actually left as soon as they received an evacuation notice (other studies have found higher levels of compliance). This is the worst nightmare from an emergency management standpoint, since “evacuating at the last minute is probably the most dangerous thing you can do,” Sarah McCaffrey, one of the 2017 study’s authors, told The New Yorker.
Further complicating matters is the fact that many wildfire-prone areas are isolated or rural regions with a limited number of egresses to work with. One 2019 investigation found that in California alone, 350,000 people live in areas “that have both the highest wildfire risk designation, and either the same number or fewer exit routes per person as Paradise” — the site of the 2018 Camp fire, where backups on roads prevented many from escaping.
Evacuation traffic also doesn’t behave like the rush hour traffic we’re more familiar with. It’s “a peak of a peak,” with the congestion caused by “the sheer amount of people trying to leave and load onto the roadway at the same time in the same direction,” Stephen Wong, a wildfire evacuation researcher and an assistant professor of transportation engineering at the University of Alberta, told me. Burnovers and hazards like downed powerlines or trees can further reduce exit options, funneling all evacuees onto the same low-capacity roads. Worse, once that congestion starts to form, “you actually reduce the number of vehicles being able to go through that section,” Wong added. “So you go from 2,000 vehicles per hour [per lane], and it drops to, like, 500 vehicles per hour.”
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Households will also frequently evacuate with multiple cars — rather than leave a valuable asset behind to burn — and tow trailers, boats, and RVs. As a result, the average vehicle length increases by 3% during wildfire evacuations, one recent study that looked at the 2019 Kincade fire in California found — leading, of course, to even worse congestion. (Agonizingly, Wong’s research further uncovered that over half of evacuating households “had at least two or more spare seats available”). The Kincade study also discovered that drivers significantly slow down during wildfire evacuations — contrary to the common misconception of careening, panicked escapees — likely due to a combination of factors such as lowered visibility and more cautious driving.
Because “most [evacuation] research focuses on hurricanes and then tornadoes,” Salman Ahmad, a traffic engineer at the civil engineering firm Fleis & VandenBrink, told me, “traffic simulations — how traffic moves during a wildfire — are still lacking.” When emergency planners use computer models to calculate minimum evacuation times for their jurisdictions, for example, their assumptions can be deadly. “If you plan for an allocation considering normal traffic as a benchmark, you’re basically not making the right assumption because you need to put in that extra safety margin” to account for “the fact that people slow down,” Enrico Ronchi, a fire researcher at Lund University in Sweden and the author of the Kincade study, told me.
Wong agreed, stressing that the number of variables fire managers need to juggle is dizzying. “Evacuations are really complex events that involve human behavior, risk perceptions, communication, emergency management, operations, the transportation system itself, psychology, the built environment, and biophysical fire,” Wong said. “So we have a long way to go for evidence-based and sufficient planning that can actually operationalize and prepare communities for these types of events.”
And that’s the scary thing: A person or a community might do everything right and still be at grave risk because of all the unknowns. Evacuation alerts might not get sent or arrive too late; exit routes might become unexpectedly blocked; fires might leapfrog, via flying embers, to create new spot fires that cut off egresses. Paradise, California, famously had a phased evacuation plan in place and had even run community wildfire drills, but even the best-laid plans can unravel.
Tom Cova, a geography professor at the University of Utah who has been studying wildfire evacuations for 30 years, told me that “too many communities may be planning for the roads to be open, the wireless emergency alert systems to work, there not to be tons of kids at home that day — you can just go down the list of things that [could go] wrong and think, What’s the backup plan?” The uncomfortable truth is that we need plans B, C, and D for when evacuations fail. Because they will fail.
Take Lahaina, where a closed bypass road concentrated outbound traffic onto a single, jam-packed street. When people started to panic and abandon their cars, it ultimately further obstructed the road for everyone behind them. “It’s like a chain reaction, where each car is seeing the [people in the] car in front of them run,” Cova said. “And then you look behind you, you can’t back up. If you look to the sides, you’re stuck. And then you say, ‘We’re going into the ocean, too.’”
That improvisation ultimately saved some lives. But “it’s hard for emergency managers to order this kind of thing because what if people drowned?” Cova went on. “So you’re trading one risk for another risk.”
But the need for creative improvisation is also a conclusion that’s been reached by the National Institute of Standards and Technology (NIST), the government agency tasked with issuing guidelines and regulations for engineers and emergency responders. In new guidance released last week, NIST used the Camp fire as its case study and found “evacuation is not a universal solution,” explaining there are times when “it may be better for residents to shelter in their community at a designated safety zone” rather than attempt to drive out of town.
This is a somewhat radical position for a U.S. agency since evacuations have long been the foundation of American wildfire preparations. But the thinking now appears to be turning toward asking “what shelters do we have?” if and when a worst-case scenario arises, as Cova further explained to me. “Temporary refuge areas, high schools, churches, large parking lots, large sports fields, golf courses, swimming pools — I wouldn’t recommend using any of these things, and I wouldn’t recommend people being told to use them,” he said, “but [people] have to know what to do when they can’t get out.”
In the case of Paradise, for example, NIST reports that there were 31 such “temporary refuge areas” that ultimately saved 1,200 lives during the fire, including 14 parking lots, seven roadways, six structures, and a handful of defensible natural areas, like a pre-established wildfire assembly area in a meadow that had already burned and ended up serving as a refuge for as many as 85 people. Once established, these concentrated refuge areas can be defended by firefighters, as was the case for 150 people who memorably hunkered down to wait out the blaze in a strip mall parking lot. It’s far from a best-case scenario, but that’s still 150 people who would’ve otherwise been stuck in potentially deadly traffic jams trying to get out of town.
Temporary refuges are unplanned areas of last resort, but establishing a larger safety zone network and preemptively hardening gathering places like schools and community centers could also potentially reduce exposure on roads by shortening the distance evacuees need to travel to get to lower-hazard areas. So-called WUI fire shelters — essentially, personal fire bunkers that NIST warns against because they aren’t standardized in the U.S. but are popular in Australia — could also be explored. “That’s the direction we’re heading in with wildfire communities,” Cova told me grimly, “because we don’t seem to be able to stop the development in these areas. That means we’re forcing people into a corner where shelter is their only backup plan.”
Maybe this is difficult for you to imagine: Your community is different; a wildfire couldn’t happen here. You’d evacuate as soon as you got the notice; there’s no way you’d get stuck. You’re a good driver; you could get out without help. But as Lahaina and other “unprecedented” fires show, it’s the limits of our lived experiences that we’re up against now.
“We should think about possible scenarios that we have not seen before in our communities,” Ronchi, the Swedish fire researcher, said. “I understand that it’s a bit of a challenge for everyone because often you have to invest money for something that you have not experienced directly. But we are [living] in scenarios now in which we cannot anchor ourselves on our past experiences only.”
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The multi-faceted investment is defense-oriented, but could also support domestic clean energy.
MP Materials is the national champion of American rare earths, and now the federal government is taking a stake.
The complex deal, announced Thursday, involves the federal government acting as a guaranteed purchaser of MP Materials’ output, a lender, and also an investor in the company. In addition, the Department of Defense agreed to a price floor for neodymium-praseodymium products of $110 per kilogram, about $50 above its current spot price.
MP Materials owns a rare earths mine and processing facility near the California-Nevada border on the edges of the Mojave National Preserve. It claims to be “the largest producer of rare earth materials in the Western Hemisphere,” with “the only rare earth mining and processing site of scale in North America.”
As part of the deal, the company will build a “10X Facility” to produce magnets, which the DOD has guaranteed will be able to sell 100% of its output to some combination of the Pentagon and commercial customers. The DOD is also kicking in $150 million worth of financing for MP Materials’ existing processing efforts in California, alongside $1 billion from Wall Street — specifically JPMorgan Chase and Goldman Sachs — for the new magnet facility. The company described the deal in total as “a multi-billion-dollar commitment to accelerate American rare earth supply chain independence.”
Finally, the DOD will buy $400 million worth of newly issued stock in MP Materials, giving it a stake in the future production that it’s also underwriting.
Between the equity investment, the lending, and the guaranteed purchasing, the Pentagon, and by extension the federal government, has taken on considerable financial risk in casting its lot with a company whose primary asset’s previous owner went bankrupt a decade ago. But at least so far, Wall Street is happy with the deal: MP Materials’ market capitalization soared to over $7 billion on Thursday after its share price jumped over 40%, from a market capitalization of around $5 billion on Wednesday and the company is valued at around $7.5 billion as of Friday afternoon.
Despite the risk, former Biden administration officials told me they would have loved to make a deal like this.
When I asked Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, whether he wished he could’ve overseen something like the DOD deal with MP Materials, he replied, “100%.” I put the same question to Ashley Zumwalt-Forbes, a former Department of Energy official who is now an investor; she said, “Absolutely.”
Rare earths and critical minerals were of intense interest to the Biden administration because of their use in renewable energy and energy storage. Magnets made with neodymium-praseodymium oxide are used in the electric motors found in EVs and wind turbines, as well as for various applications in the defense industry.
MP Materials will likely have to continue to rely on both sets of customers. Building up a real domestic market for the China-dominated industry will likely require both sets of buyers. According to a Commerce Department report issued in 2022, “despite their importance to national security, defense demand for … magnets is only a small portion of overall demand and insufficient to support an economically viable domestic industry.”
The Biden administration previously awarded MP Materials $58.5 million in 2024 through the Inflation Reduction Act’s 48C Advanced Energy Project tax credit to support the construction of a magnet facility in Fort Worth. While the deal did not come with the price guarantees and advanced commitment to purchase the facility’s output of the new agreement, GM agreed to come on as an initial buyer.
Matt Sloustcher, an MP Materials spokesperson, confirmed to me that the Texas magnet facility is on track to be fully up and running by the end of this year, and that other electric vehicle manufacturers could be customers of the new facility announced on Thursday.
At the time MP Materials received that tax credit award, the federal government was putting immense resources behind electric vehicles, which bolstered the overall supply supply chain and specifically demand for components like magnets. That support is now being slashed, however, thanks to the One Big Beautiful Bill Act, which will cancel consumer-side subsidies for electric vehicle purchases.
While the Biden tax credit deal and the DOD investment have different emphases, they both follow on years of bipartisan support for MP Materials. In 2020, the DOD used its authority under the Defense Production Act to award almost $10 million to MP Materials to support its investments in mineral refining. At the time, the company had been ailing in part due to retaliatory tariffs from China, cutting off the main market for its rare earths. The company was shipping its mined product to China to be refined, processed, and then used as a component in manufacturing.
“Currently, the Company sells the vast majority of its rare earth concentrate to Shenghe Resources,” MP Materials the company said in its 2024 annual report, referring to a Chinese rare earths company.
The Biden administration continued and deepened the federal government’s relationship with MP Materials, this time complementing the defense investments with climate-related projects. In 2022, the DOD awarded a contract worth $35 million to MP Materials for its processing project in order to “enable integration of [heavy rare earth elements] products into DoD and civilian applications, ensuring downstream [heavy rare earth elements] industries have access to a reliable feedstock supplier.”
While the DOD deal does not mean MP Materials is abandoning its energy customers or focus, the company does appear to be to the new political environment. In its February earnings release, the company mentioned “automaker” or “automotive-grade magnets” four times; in its May earnings release, that fell to zero times.
Former Biden administration officials who worked on critical minerals and energy policy are still impressed.
The deal is “a big win for the U.S. rare earths supply chain and an extremely sophisticated public-private structure giving not just capital, but strategic certainty. All the right levers are here: equity, debt, price floor, and offtake. A full-stack solution to scale a startup facility against a monopoly,” Zumwalt-Forbes, the former Department of Energy official, wrote on LinkedIn.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The issue with developing that “midstream” industry, Jacquez told me, is that China’s world-leading mining, processing, and refining capacity allows it to essentially crash the price of rare earths to see off foreign competitors and make future investment in non-Chinese mining or processing unprofitable. While rare earths are valuable strategically, China’s whip hand over the market makes them less financially valuable and deters investment.
“When they see a threat — and MP is a good example — they start ramping up production,” he said. Jacquez pointed to neodymium prices spiking in early 2022, right around when the Pentagon threw itself behind MP Materials’ processing efforts. At almost exactly the same time, several state-owned Chinese rare earth companies merged. Neodymium-praseodymium oxide prices fell throughout 2022 thanks to higher Chinese production quotas — and continued to fall for several years.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate out away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The combination of whipsawing prices and monopolistic Chinese capacity to process and refine rare earths makes the U.S.’s existing large rare earth reserves less commercially viable.
“In order to compete against that monopoly, the government needed to be fairly heavy handed in structuring a deal that would both get a magnet facility up and running and ensure that that magnet facility stays in operation and weathers the storm of Chinese price manipulation,” Zumwalt-Forbes said.
Beyond simply throwing money around, the federal government can also make long-term commitments that private companies and investors may not be willing or able to make.
“What this Department of Defense deal did is, yes, it provided much-needed cash. But it also gave them strategic certainty around getting that facility off the ground, which is almost more important,” Zumwalt-Forbes said.
“I think this won’t be the last creative critical mineral deal that we see coming out of the Department of Defense,” Zumwalt-Forbes added. They certainly are in pole position here, as opposed to the other agencies and prior administrations.”
On a new plan for an old site, tariffs on Canada, and the Grain Belt Express
Current conditions: Phoenix will “cool” to 108 degrees Fahrenheit today after hitting 118 degrees on Thursday, its hottest day of the year so far • An extreme wildfire warning is in place through the weekend in Scotland • University of Colorado forecasters decreased their outlook for the 2025 hurricane season to 16 named storms, eight hurricanes, and three major hurricanes after a quiet June and July.
President Trump threatened a 35% tariff on Canadian imports on Thursday, giving Prime Minister Mark Carney a deadline of August 1 before the levies would go into effect. The move follows months of on-again, off-again threats against Canada, with former Canadian Prime Minister Justin Trudeau having successfully staved off the tariffs during talks in February. Despite those earlier negotiations, Trump held firm on his 50% tariff on steel and aluminum, which will have significant implications for green manufacturing.
As my colleagues Matthew Zeitlin and Robinson Meyer have written, tariffs on Canadian imports will affect the flow of oil, minerals, and lumber, as well as possibly break automobile supply chains in the United States. It was unclear as of Thursday, however, whether Trump’s tariffs “would affect all Canadian goods, or if he would follow through,” The New York Times reports. The move follows Trump’s announcement this week of tariffs on several other significant trade partners like Japan and South Korea, as well as a 50% tariff on copper.
The long beleaguered Lava Ridge Wind Project, formally halted earlier this year by an executive order from President Trump, might have a second life as the site for small modular reactors, Idaho News 6 reports. Sawtooth Energy Development Corporation has proposed installing six small nuclear power generators on the former Lava Ridge grounds in Jerome County, Idaho, drawn to the site by the power transmission infrastructure that could connect the region to the Midpoint Substation and onto the rest of the Western U.S. The proposed SMR project would be significantly smaller in scale than Lava Ridge, which would have produced 1,000 megawatts of electricity on a 200,000-acre footprint, sitting instead on 40 acres and generating 462 megawatts, enough to power 400,000 homes.
Sawtooth Energy plans to hold four public meetings on the proposal beginning July 21. The Lava Ridge Wind Project had faced strong local opposition — we named it the No. 1 most at-risk project of the energy transition last fall — due in part to concerns about the visibility of the turbines from the Minidoka National Historic Site, the site of a Japanese internment camp.
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Republican Senator Josh Hawley of Missouri said on social media Thursday that Energy Secretary Chris Wright had assured him that he will be “putting a stop to the Grain Belt Express green scam.” The Grain Belt Express is an 804-mile-long, $11 billion planned transmission line that would connect wind farms in Kansas to energy consumers in Missouri, Illinois, and Indiana, which has been nearing construction after “more than a decade of delays,” The New York Times reports. But earlier this month, Missouri Attorney General Andrew Bailey, a Republican, put in a request for the local public service commission to reconsider its approval, claiming that the project had overstated the number of jobs it would create and the cost savings for customers. Hawley has also been a vocal critic of the project and had asked the Energy Department to cancel its conditional loan guarantee for the transmission project.
New electric vehicles sold in Europe are significantly more environmentally friendly than gas cars, even when battery production is taken into consideration, according to a new study by the International Council on Clean Transportation. Per the report, EVs produce 73% less life-cycle greenhouse gas emissions than combustion engine cars, even considering production — a 24% improvement over 2021 estimates. The gains are also owed to the large share of renewable energy sources in Europe, and factor in that “cars sold today typically remain on the road for about 20 years, [and] continued improvement of the electricity mix will only widen the climate benefits of battery electric cars.” The gains are exclusive to battery electric cars, however; “other powertrains, including hybrids and plug-in hybrids, show only marginal or no progress in reducing their climate impacts,” the report found.
Aryna Sabalenka attempts to cool down during her Ladies' Singles semi-final at Wimbledon on Thursday.Julian Finney/Getty Images
With the United Kingdom staring down its third heatwave in a month this week, a new study warns of dire consequences if homes and cities do not adapt to the new climate reality. According to researchers at the University College London and the London School of Hygiene and Tropical Medicine, heat-related deaths in England and Wales could rise 50-fold by the 2070s, jumping from a baseline of 634 deaths to 34,027 in a worst-case scenario of 4.3 degrees Celsius warming, a high-emissions pathway.
The report specifically cited the aging populations of England and Wales, as older people become more vulnerable to the impacts of extreme heat. Low adoption of air conditioning is also a factor: only 2% to 5% of English households use air conditioning, although that number may grow to 32% by 2050. “We can mitigate [the] severity” of the health impacts of heat “by reducing greenhouse gas emissions and with carefully planned adaptations, but we have to start now,” UCL researcher Clare Heaviside told Sky News.
This week, Centerville, Ohio, rolled out high-tech recycling trucks that will use AI to scan the contents of residents’ bins and flag when items have been improperly sorted. “Reducing contamination in our recycling system lowers processing costs and improves the overall efficiency of our collection,” City Manager Wayne Davis said in a statement about the AI pilot program, per the Dayton Daily News.
Or at least the team at Emerald AI is going to try.
Everyone’s worried about the ravenous energy needs of AI data centers, which the International Energy Agency projects will help catalyze nearly 4% growth in global electricity demand this year and next, hitting the U.S. power sector particularly hard. On Monday, the Department of Energy released a report adding fuel to that fire, warning that blackouts in the U.S. could become 100 times more common by 2030 in large part due to data centers for AI.
The report stirred controversy among clean energy advocates, who cast doubt on that topline number and thus the paper’s justification for a significant fossil fuel buildout. But no matter how the AI revolution is powered, there’s widespread agreement that it’s going to require major infrastructure development of some form or another.
Not so fast, says Emerald AI, which emerged from stealth last week with $24.5 million in seed funding led by Radical Ventures along with a slew of other big name backers, including Nvidia’s venture arm as well as former Secretary of State John Kerry, Google’s chief scientist Jeff Dean, and Kleiner Perkins chair John Doerr. The startup, founded and led by Orsted’s former chief strategy and innovation officer Varun Sivaram, was built to turn data centers from “grid liabilities into flexible assets” by slowing, pausing, or redirecting AI workloads during times of peak energy demand.
Research shows this type of data center load flexibility could unleash nearly 100 gigawatts of grid capacity — the equivalent of four or five Project Stargates and enough to power about 83 million U.S. homes for a year. Such adjustments, Sivaram told me, would be necessary for only about 0.5% of a data center’s total operating time, a fragment so tiny that he says it renders any resulting training or operating performance dips for AI models essentially negligible.
As impressive as that hypothetical potential is, whether a software product can actually reduce the pressures facing the grid is a high stakes question. The U.S. urgently needs enough energy to serve that data center growth, both to ensure its economic competitiveness and to keep electricity bills affordable for Americans. If an algorithm could help alleviate even some of the urgency of an unprecedented buildout of power plants and transmission infrastructure, well, that’d be a big deal.
While Emerald AI will by no means negate the need to expand and upgrade our energy system, Sivaram told me, the software alone “materially changes the build out needs to meet massive demand expansion,” he said. “It unleashes energy abundance using our existing system.”
Grand as that sounds, the fundamental idea is nothing new. It’s the same concept as a virtual power plant, which coordinates distributed energy resources such as rooftop solar panels, smart thermostats, and electric vehicles to ramp energy supply either up or down in accordance with the grid’s needs.
Adoption of VPPs has lagged far behind their technical potential, however. That’s due to a whole host of policy, regulatory, and market barriers such as a lack of state and utility-level rules around payment structures, insufficient participation incentives for customers and utilities, and limited access to wholesale electricity markets. These programs also depend on widespread customer opt-in to make a real impact on the grid.
“It’s really hard to aggregate enough Nest thermostats to make any kind of dent,”” Sivaram told me. Data centers are different, he said, simply because “they’re enormous, they’re a small city.” They’re also, by nature, virtually controllable and often already interconnected if they’re owned by the same company. Sivaram thinks the potential of flexible data center loads is so promising and the assets themselves so valuable that governments and utilities will opt to organize “bespoke arrangements for data centers to provide their services.”
Sivaram told me he’s also optimistic that utilities will offer data center operators with flexible loads the option to skip the ever-growing interconnection queue, helping hyperscalers get online and turn a profit more quickly.
The potential to jump the queue is not something that utilities have formally advertised as an option, however, although there appears to be growing interest in the idea. An incentive like this will be core to making Emerald AI’s business case work, transmission advocate and president of Grid Strategies Rob Gramlich told me.
Data center developers are spending billions every year on the semiconductor chips powering their AI models, so the typical demand response value proposition — earn a small sum by turning off appliances when the grid is strained — doesn’t apply here. “There’s just not anywhere near enough money in that for a hyperscaler to say, Oh yeah, I’m gonna not run my Nvidia chips for a while to make $200 a megawatt hour. That’s peanuts compared to the bazillions [they] just spent,” Gramlich explained.
For Emerald AI to make a real dent in energy supply and blunt the need for an immediate and enormous grid buildout, a significant number of data center operators will have to adopt the platform. That’s where the partnership with Nvidia comes in handy, Sivaram told me, as the startup is “working with them on the reference architecture” for future AI data centers. “The goal is for all [data centers] to be potentially flexible in the future because there will be a standard reference design,” Sivaram said.
Whether or not data centers will go all in on Nvidia’s design remains to be seen, of course. Hyperscalers have not typically thought of data centers as a flexible asset. Right now, Gramlich said, most are still in the mindset that they need to be operating all 8,760 hours of the year to reach their performance targets.
“Two or three years ago, when we first noticed the surge in AI-driven demand, I talked to every hyperscaler about how flexible they thought they could be, because it seemed intuitive that machine learning might be more flexible than search and streaming,” Gramlich told me. By and large, the response was that while these companies might be interested in exploring flexibility “potentially, maybe, someday,” they were mostly focused on their mandate to get huge amounts of gigawatts online, with little time to explore new data center models.
“Even the ones that are talking about flexibility now, in terms of what they’re actually doing in the market today, they all are demanding 8,760 [hours of operation per year],” Gramlich told me.
Emerald AI is well aware that its business depends on proving to hyperscalers that a degree of flexibility won’t materially impact their operations. Last week, the startup released the results of a pilot demonstration that it ran at an Oracle data center in Phoenix, which proved it was able to reduce power consumption by 25% for three hours during a period of grid stress while still “assuring acceptable customer performance for AI workloads.”
It achieved this by categorizing specific AI tasks — think everything from model training and fine tuning to conversations with chatbots — from high to low priority, indicating the degree to which operations could be slowed while still meeting Oracle’s performance targets. Now, Emerald AI is planning additional, larger-scale demonstrations to showcase its capacity to handle more complex scenarios, such as responding to unexpected grid emergencies.
As transmission planners and hyperscalers alike wait to see more proof validating Emerald AI’s vision of the future, Sivaram is careful to note that his company is not advocating for a halt to energy system expansion. In an increasingly electrified economy, expanding and upgrading the grid will be essential — even if every data center in the world has a flexible load profile.
’We should be building a nationwide transmission system. We should be building out generation. We should be doing grid modernization with grid enhancing technologies,” Sivaram told me. “We just don’t need to overdo it. We don’t need the particularly massive projections that you’re seeing that are going to cause your grandmother’s electricity rates to spike. We can avoid that.”