So, What Does AI Really Mean for Decarbonization?

The rise of artificial intelligence and the associated expansion of data centers is driving surging demand for new power supply. Earlier this fall at the annual meeting of Princeton University’s Andlinger Center for Energy and the Environment, Jesse sat down with a panel of experts to discuss how society can meet the growing energy demands of AI while staying on track broader decarbonization efforts.

How will we power the growing demand from AI and data centers? What role can nuclear power really play? Will AI lock us into a new generation of gas power plants? Are regulators prepared for what's coming? Jesse dives into all this and more with Allison Clements, former commissioner of the Federal Energy Regulatory Commission, Matt DeNichilo, partner at energy investment firm ECP, and Lucia Tian, head of clean energy and decarbonization technologies at Google.

Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Rob is off this week.

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Here is an excerpt from the conversation:

Allison Clements: FERC, the agency, which, I was one of five commissioners, has jurisdiction over what resources sign up for and retire from participating on the grid. And over the last decade, two decades, what has happened is, as this 1.5 terawatts of generation have gotten in line, it’s just overwhelmed the interconnection system. The interconnection processes weren’t designed for anything other than central station, dispatchable, most recently gas plants, combined cycle gas plants, peaking plants, closer to load, you don’t need as much network upgrades.

There’s lots of room on the grid because there was an investment in the grid many decades ago. But now we’ve got this situation where there’s all these resources who want to sign up, and they can’t get on. In fact, this has been going on for a long time. And most of the supply resources waiting to get on today do have site control, do have the financial and commercial readiness. There’s some that we’re still clearing out from the days of the Wild West, where people would just sign up six interconnection applications and see what happened, which would cause a lot of problems for everybody else when they would drop out of those lines.

So, what do we do about it? FERC has passed a couple of different rules to clean up regional transmission planning. A comment about planning during this morning’s session that utilities plan so much — well, if we had been planning for an increasingly electrified economy 10 years ago, 15 years ago, 20 years ago, we would have a lot more transmission, a lot more space on the grid to give access to these resources.

We have taken action as an agency to try and fix that through one rule. We’ve also taken action as an agency to try and fix the interconnection lines themselves through some nuts and bolts requirements to make it harder to get through, so you don’t come until you’re ready to go. But those rules and policy changes that are very positive aren’t going to have impact for, let’s say, five years, seven years. I mean, the reality is we’re not going to be picking new transmission lines from these processes we’ve developed until at least 2029.

2024 — what do we do for the next five years, right? Even these really exciting new deals with SMR, advanced geothermal, we’re looking in the 2030 timeline. Well, the existing grid is really inefficient, and if we can use AI to improve it, that would be really, really important in validating and making this a positive cycle of affirmation.

The last thing I’ll say is, what are those inefficiencies? The lines between regions, the lines between PJM, which is the region we’re sitting in today, a grid operator, and the New York State grid operator, and the New England grid operator at the interties, the transfers, are very inefficient and they’re often counter to good economics. We have no hardware and software solutions, grid-enhancing technologies, advanced transmission technologies that can automatically double existing capacity, or existing room, extra room on the grid. We have surplus interconnection. We have the opportunity to put more resources behind existing points of interconnection and use that system more efficiently. So, the reality is to solve the power for AI, we need the AI to come back and help us do it.

This episode of Shift Key is sponsored by …

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Music for Shift Key is by Adam Kromelow.