Tech and power sector partnerships can accelerate the energy transition
Arshad Mansoor is the president and CEO of the Electric Power Research Institute. This essay is part of the Global Energy Agenda.
In 2017, Google published a groundbreaking paper titled “Attention Is All You Need.”1Ashish Vaswani et al., “Attention Is All You Need,” Advances in Neural Information Processing Systems, Proceedings, 2017, https://research.google/pubs/attention-is-all-you-need. It not only revolutionized the field of artificial intelligence but also triggered a boom in the construction of data centers worldwide. This surge in data-center demand has had profound implications for global power consumption, presenting both challenges and opportunities for the transformation of the energy sector.
Data centers’ impact on power demand
The proliferation of data centers has led to a substantial rise in global power demand. According to projections by the Oak Ridge National Laboratory, the electricity requirements for these facilities are expected to grow exponentially. This trend is particularly pronounced in the United States: The Electric Power Research Institute (EPRI) estimates that American data centers could consume up to 9 percent of electricity generation by 2030—more than double the estimated 4 percent they consume today.“2Powering Intelligence: Analyzing Artificial Intelligence and Data Center Energy Consumption,” EPRI, May 28, 2024, https://www.epri.com/research/products/3002028905.
In addition to data centers, other factors such as the onshoring of manufacturing and the electrification of industry are further driving up power consumption. This escalating demand poses a challenge for regions that are already struggling with electricity reliability, leading to delays in the retirement of coal-fired plants and the addition of new natural gas-fired generation to ensure stable supply.
High-tech commitments to low-carbon energy
Despite these challenges, the high-tech industry has been a staunch advocate for the clean energy transition. Companies like Google have set ambitious goals to achieve net-zero emissions by 2030. The increasing power demand from their data centers, however, threatens to derail these targets.
Google’s 2018 paper on 24/7 carbon-free energy (CFE)3Moving toward 24×7 Carbon-Free Energy at Google Data Centers: Progress and Insights, Google Sustainability, October 2018, https://sustainability.google/reports/24×7-carbon-free-energy-data-centers. highlighted the limitations of relying solely on renewable energy certificates and emphasized the need for true carbon neutrality, where consumption is matched with zero-carbon energy production on a 24/7 basis.
The paper laid the foundation for the current push toward 24/7 CFE, which aims to ensure that data centers and other high-tech facilities are powered entirely by low-carbon energy around the clock. While achieving this goal presents significant challenges, it also offers an opportunity for the high-tech and power industries to collaborate and drive the energy transition forward.
Navigating the path to net zero
In the short term, the increased reliance on natural gas and the delayed retirement of coal plants may seem like a setback for the clean energy transition. However, these measures are necessary to maintain grid reliability as we work toward a more sustainable energy future. The real challenge lies in accelerating the deployment of emerging carbon-free technologies such as advanced nuclear reactors, carbon capture and storage (CCS), and long-duration energy storage (LDES).
Public-private partnerships, such as technology deployment hubs, can play a crucial role in this effort. These hubs would facilitate the phased deployment of advanced energy technologies, with specific targets for LDES, small modular reactors, new large nuclear plants, and gas with CCS. By sharing the financial, regulatory, and licensing risks associated with these technologies, these collaborations can help bring them to market more quickly and at scale.
Technology deployment hubs
The concept of technology deployment hubs involves a series of phased deployments, each building on the lessons learned from previous projects. Experience suggests that it takes decades and at least ten full-scale deployments for new technologies to achieve cost reductions and supply chain efficiencies.
Just as early tech company commitments to renewable energy helped drive rapid cost decreases and widespread deployment, similar commitments today can accelerate progress on the new and emerging technologies needed to meet growing electricity demand. By adopting this phased approach, we can ensure that each deployment maximizes cost efficiencies and technological refinements, ultimately accelerating the clean energy transition.
Relighting the spark
The collaboration between the high-tech and power industries is essential for achieving our long-term clean energy goals. By working together, these sectors can drive the development and deployment of advanced energy technologies, supported by regulatory and policy frameworks that enable innovation and investment. This partnership has the potential to create a second spark in the energy transition, similar to the one ignited by Google’s early investments in renewable energy.
While the next few years may see a temporary increase in natural gas use and extended coal plant operations, these measures are necessary to ensure grid reliability during the transition. The ultimate goal is to achieve a net-zero economy. The high-tech industry’s commitment to 24/7 CFE, combined with the power sector’s expertise in energy generation and distribution, can help us reach this target more quickly.
The path to net zero is fraught with challenges, but it also presents significant opportunities for innovation and collaboration. By seizing the opportunity to accelerate the low-carbon transition through emerging partnerships between high-tech and power companies, we can ensure a sustainable and reliable energy future. Let’s not be distracted by short-term detours; instead, let’s focus on the long-term goal of achieving a net-zero economy and work together to make it a reality.
All essays
Explore the program
The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.
Image: Servers run inside the Facebook New Albany Data Center on Thursday, February 6, 2020 in New Albany, Ohio. Today, the data center began serving Facebook traffic. Facebook also plans to expand the 1.5 million square foot facility into a 2.5 million square foot campus. [Joshua A. Bickel/Dispatch]