US utilities struggling to meet demand of energy-thirsty AI

Industry leaders in the States explained the issues to audiences at an energy conference this week, underlining how data centre firms are having to go around regulated utilities in order to satisfy growing power needs. 

A myriad of regulations, court struggles and bureaucracy instigated by environmental and community organisations have prevented new power ventures from being integrated swiftly into the US grid. The stagnant state of affairs is hitting the bottom line of the big power players, such as regulated electric utilities, Reuters reports.

Talking at the AI: Powering the New Energy Era summit in Washington, KPMG financial management leader, Brad Stansberry called regulation and permissions “abysmal”.

Delays mean that data centre companies are passing up the traditional utilities, instead negotiating alternative deals with other power organisations or creating their own energy. Aligned is one such data centre, and one of the largest in its sector, with capacity hitting 2.5GW. The firm is now searching for fresh power sources after investing time into identifying and buying land that can accommodate its operational needs.

Aligned CIO, Phill Lawson-Shanks said:

“We always assumed there would be power, but obviously that assumption was woefully inaccurate, so now we’re chasing where power is.”

Lawson described how his firm are collaborating with utilities on their ventures where feasible, but that they are also pushing to employ smaller reactors or a variety of nuclear energy that is in iterative stages in the US. 

“Where we can’t, we will have to have them behind the meter,” he added.

Power firms have responded by voicing their anxieties over the electrical appetite of new platforms such as ChatGPT and other chatbots, which need around 10 times the energy of Google search and other varieties of AI.

Michael Keyser, chief at National Renewables Cooperative Organisation, said:

“I think it’s a natural outcome of that for why you see data centres and tech companies pursuing their own power purchasing now. 

Regulated power entities say drawn out bureaucratic processes within regulation are to blame for delays to the expansion of their infrastructures. The situation is exacerbated by growing requirements for green energy, such as wind or solar. 

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