October 31, 2024 • 22 mins
Unlock the secrets of global energy dynamics and discover how the rise of U.S. liquefied natural gas is reshaping the world's energy landscape. Join me, Brigham McCown, as we explore the profound shifts triggered by the significant influx of LNG from the United States, especially in the wake of the 2022 Russian invasion of Ukraine. With energy prices soaring in Europe and America evolving from an energy importer to a major exporter, we unravel the complexities of potential oversupply, economic advantages, and the strategic geopolitical roles of both the U.S. and Qatar. This episode promises to equip you with a comprehensive understanding of the evolving global energy market and the potential challenges ahead.
Amidst the surge in data center demands, particularly in the U.S. and Europe, energy consumption is set to skyrocket. Hear from Matthew Garman, CEO of AWS, who sheds light on the growing energy needs of data centers and the role nuclear power could play in filling the gaps left by wind and solar energy. As AWS invests $35 billion in Virginia's Data Center Alley, we discuss how major players like Microsoft, Ameren, and Google are seeking innovative energy solutions to support their operations. With Europe's green ambitions clashing with rising energy consumption driven by AI and data centers, we reflect on the critical need for stable, affordable power sources to ensure sustainable growth and data center viability.
Amidst the surge in data center demands, particularly in the U.S. and Europe, energy consumption is set to skyrocket. Hear from Matthew Garman, CEO of AWS, who sheds light on the growing energy needs of data centers and the role nuclear power could play in filling the gaps left by wind and solar energy. As AWS invests $35 billion in Virginia's Data Center Alley, we discuss how major players like Microsoft, Ameren, and Google are seeking innovative energy solutions to support their operations. With Europe's green ambitions clashing with rising energy consumption driven by AI and data centers, we reflect on the critical need for stable, affordable power sources to ensure sustainable growth and data center viability.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Charged Conversations, where we dig into the latest
and energy and energy related news. I'm your host, Brigham McCaw.
On this episode, we're going to take a look at
how natural gas is taking center stage, a revival of
nuclear power, and how artificial intelligence may undo the European
(00:22):
Union's plan for a greener economy. The biggest influx of
natural gas is coming and it's going to transform the
whole global market, with some analysts believing it could bring
about wider implications than previous expansions. When we talk about
shipping natural gas overseas, we're talking about converting it to
(00:45):
liquid and stuffing it on a ship, sending it across
the ocean where it's then used. This liquefied natural gas
has been a godsend for Europe after the Russian invasion
of Ukraine in twenty twenty two, with America coming to
the rescue. But the question this time around is whether
(01:05):
or not the expansion is likely lead to a state
of oversupply by the end of next year, and whether
that could even remain for several years with natural gas
prices moving cheaper, which would benefit the purchasers of American
natural gas LNG is much more expensive than US natural gas,
(01:27):
which is currently training at two dollars and twenty five
cents two and a quarter per million BTUs. Compare that
against Europe, where imported natural gas it's currently trading at
around twelve bucks per million BTUs. Part of this is
the fact of transportation, the cost of converting natural gas
(01:49):
into a liquid, putting it on a ship, sending it
across like we talked about, and then converting it back
to natural gas, stuffing it in a pipelining, sending it
on its way. But the other problem for Europe is
since twenty twenty two they've been relying on short term contracts.
Short term contracts bring you higher prices. Still, it's much
better than the height of the winter of twenty two
(02:12):
when Russia cut off gas, where natural gas was spiking
at about seventy dollars per million BTUs. Think about that
two and a quarter in the United States, twelve now
in Europe, but it was seventy at its height in
twenty twenty two. Even at twelve dollars per million BTU,
(02:34):
it's cost prohibitive because we all know that in order
to make electricity or industrial heat for furnaces, for steel factories,
for cement plants, for glass factories, for any facility, you
need a lot of energy. And if you're on the margins,
(02:55):
let's say you're making ten to fifteen percent gross profit
after all of sudden done, which is actually kind of
a rosy projection for heavy industries. Yeah, energy is expensive,
and as I've said on this program before, next to
the cost of raw materials and that of labor i e. People,
(03:18):
energy is the third most expensive component of making anything. Well,
if it's six hundred percent more than what the Americans
can do it for, who do you think is going
to have an economic advantage?
Speaker 2 (03:33):
Right us?
Speaker 1 (03:36):
Which is the whole point of having American energy dominance
around the world, being energy independent and having energy security. Well,
throughout this year, we've seen a growing course of analysts
that have started to warrant about tepid demand growth and
this booming wave after wave of export capacity brought about
(04:00):
by America's shale revolution and the fracking boom. There is
literally a pipeline of planned infrastructure and LG export facilities
that continues to flood the market. Now, it's unclear whether
all of these facilities will actually be built because, as
we'll talk about when we get to nuclear Just because
(04:21):
it's planned doesn't mean it actually ever makes it to completion.
But global LNG trade has doubled in the last decade,
growing from around two hundred and forty metric tons in
twenty fourteen to over four hundred metric tons last year.
Those are thousands to ten thousand shipments of natural gas
(04:44):
by ship each year. And we're not talking a small
boat that could cruise up and down the Mississippi or Ohio.
We're talking about ships that are six hundred to one
thousand feet long, as large as an aircraft carrier, acting
a lot of energy to take abroad. RBC, which is
the Royal Bank of Canada, has talked about global liquefication capacity.
(05:09):
That's a fancy term for how much natural gas can
we convert into liquid state and ship it each year.
They say that by the end of the decade this
is going to grow by another fifty percent, with US
and Katar holding on to their positions as the world's
largest suppliers with a combined market share of over fifty
(05:31):
percent by twenty thirty. This is really unheard of if
you think back just a couple decades, where we weren't
building energy export facilities. We were building energy import facilities
because we didn't have enough natural gas. Our energy policies
through the sixties and seventies and eighties made us sorely
(05:54):
dependent upon others. Yet again, thanks to the shale and
fracking revolution, America's energy renaissance was back now. Without us,
Europe would have darn near starved to death literally and
figuratively over the last couple of years. Also, we should
think about the fact that America has gone from an
(06:16):
ad importer to an ad exporter when we export energy products.
And I had to pause there for a minute because
I want this to resonate. It's not just energy, it's
a commodity. It's the same as selling a Ford or
a GM or a jaun Deere tractor, or a carrier,
(06:37):
furnace or air conditioning unit. We are selling something that
somebody else wants to pay us for. It reduces our
trade imbalance, brings money back into the United States, makes
us more wealthy than they would be without this trade.
I guess another way of looking at it's the same
as selling corner grain abroad. It's a product and people
(06:59):
want to buy it. Keep in mind that America also
went again from energy poverty energy scarcity into energy abundance,
where in twenty twenty four and for several years now,
we've been not only the largest producer of natural gas
in the world, but the largest producer of oil, surpassing
(07:22):
Russia and Saudi Arabia. And with the correct policies, we
can have low energy prices here at home and turn
it into a geopolitical powerhouse of literally soft and hard
power where we can help our friends and punish our
enemies moving forward, but keep in mind that Katar actually
(07:45):
shares the largest natural gas field in the world with Iran,
and other players are also out there, like Australia, have
long been met exporters. Finally, we have to see how
long Russia will remain dormant, even as it is today
increasing its own energy export capacity. Many private companies and
(08:06):
state owned entities have plans to boost capacity not only
to backstop European consumption, but also to capture what is
expected to be and now wait for this greater energy demands,
particularly in Asia. You see, and this is something else
we've talked about on the program. The world doesn't use
(08:27):
less energy. We talk about conservation and I'm not opposed
to conservation or efficiency. I think we should always try
to be as efficient as possible with our energy. We
don't waste, not want not right, get it. When I
was growing up, my parents said, don't waste that food
on your plate. Remember kids are starving in Africa. We
throw a lot of food away. We're very inefficient in
(08:48):
a lot of areas. And yes, we can be better,
but we can't save our way to prosperity. As we'll
get to and we talk about artificial intelligence. The world
continues to demand more, more and more energy. The higher
your standard of living, the more energy you use. There
(09:08):
is a direct correlation between a country's wealth and the
amount of energy it uses. Poor countries use less energy.
Rich companies countries use more energy. And world population wants
what we have, and world population continues to increase. So
demand from the Asia Pacific region, which is the biggest
(09:29):
import of LNG, is expected to grow by five to
seven percent annually. Around seventy percent of this growth is
going to stem from India, China, and South Korea. Meanwhile,
energy prices have really not seen major fluctuations despite these
escalating geopolitical tensions. Mayah No kidding, because when you have
(09:51):
energy security, you're inoculated against geopolitical conflicts.
Speaker 2 (09:58):
When you're dependent on the Mid East.
Speaker 1 (09:59):
In the Middle East is in turmoil like it is now,
your energy prices would be a heck of a lot
higher than they are now, because well, we don't need
Middle Eastern oil. I think there is a notion that
as we look forward, there will also be some very
interesting changes that will happen. All of this will know
(10:22):
more about after the presidential election, of course, but right
now it's important to also note that Europe has really
tried to eliminate Russian energy supplies, but that goal remains
more aspirational than reality, given that certain countries lack the
ability to produce or procure rather energy oil and gas
(10:43):
from other sources even if they wanted to. There simply
exists insufficient energy infrastructure ie pipelines to deliver it. And
it's a precautionary tale of what happens during periods of instability,
something political sciences have long warned Europe about, depending on
the Soviet Union slash Russia slash whoever they are today. Heck,
(11:08):
even Ronald Reagan warned about it during his time in office.
Fifty years ago. Topic two Microsoft deals signals booming demand
from data centers to power artificial intelligence. US utilities are
finally signing up concrete deals with data center operators as
the artificial intelligence wave sparks a surge and power demand
(11:33):
paving the way for higher profits in the coming quarters.
Data centers are expected to consume almost ten percent of
all the power generated in the United States by the
end of the decade. Compare that with only three percent
according to Goldman Sachs report. In twenty twenty two, Amazon
in particular goes nuclear and is going to invest more
(11:54):
than half a billion bucks to develop small modular reactors,
which is Amazon's subsidiary in cloud computing, announced they didn't
sign a deal with Dominion Energy, Virginia's utility company, to
explore the development of a small modular nuclear reactor near
Dominions existing North Anna Nuclear Power Station AWS is a
(12:18):
massive and increasing need for clean energy is it expands
into services.
Speaker 2 (12:22):
Of generative AII.
Speaker 1 (12:24):
The agreement is also part of Amazon's path to what
they're calling zero carbon emissions. That's right, nuclear power is
considered a net zero carbon emitter. Okay, sure, is there
waste from nuclear power plants. Yes, and that's something a
lot of people point to. And do we need a
permanent depository in the United States for nuclear waste? Absolutely,
(12:49):
But if we actually took all of the nuclear waste
that has occurred from power generation in this country from
nineteen sixty whatever, say a sixty seven, sixty nine forward
to today, we could stick it all on a football
field and it would be less than ten feet high.
Speaker 2 (13:09):
It's not really that much.
Speaker 1 (13:11):
So Amazon is going to spend that half a million
dollars in nuclear power, announcing three part projects from Virginia
to Washington State. Well, we're talking about SMRs. I think
it's important to know that it's an advanced type of
nuclear reactor with a very small footprint that allows it
to be built closer to the grid. In theory, they
(13:34):
have faster construction times than traditional reactors, allowing them to
come online sooner. You can also pair them in parallel,
so they're fit to expand exponentially as power where demand rises.
What makes SMRs so interesting is like a car, and okay,
(13:56):
let's be fair, they're bigger than a car, but they
will be built the same so once one is licensed,
you can simply copy it over and over again. That
substantially reduces the time and cost to deploy to market,
something the nuclear energy industry has struggled with mightily, since
(14:18):
no two reactors in the United States are actually carbon
copies of another. So this will hopefully change that. And
as we know our Amazon is the latest large tech
company to buy into nuclear power to fuel the growing
demands from data center. Google also announced that it will
purchase power from an SMR developer, Cairo's Power, and Constellation
(14:41):
Energy is restarting Three Mile Island.
Speaker 2 (14:44):
Yes, you heard it.
Speaker 1 (14:45):
Right, three Mile Island. Not the Damage reactor, but the
one sitting next to it to power Microsoft Data centers.
Now it's not the same as the Damage reactor, but
it's the one right next door that wasn't damaged, restarting
technolology from the seventies to power Microsoft data centers. Matthew Garman,
(15:05):
the CEO of AWS, said, we see the need for
gigawatts of power in the coming years and there's simply
insufficient supply and there won't be enough wind and solar
power to be able to meet the needs. So going
nuclear is a great opportunity. So Virginia is currently home
to half of the data centers in the US, and
(15:28):
in particular that northern Virginia area outside of Washington, d
C has been dubbed Data Center Alley, the bulk of
which is in Louden County. In fact, it's estimated that
seventy percent of the world's Internet traffic travels through Data
Center Alley each day. Virginia Governor Glenn Younkin released a
statement that said small modular nuclear actors will play a
(15:51):
critical role in positioning Virginia as a leading nuclear innovation hub.
AWS plans to invest another thirty five billion by twenty
forty to establish multiple data center campuses across Virginia. According
to Governor Ynkin, these SMRs will be directly powering the grid,
so they'll go to power everything that's part of the
data centers, but everything that's plugged into the grid will benefit.
(16:16):
Speaking of deals like Amazon, here are just a few
others that have occurred so far this year that I've
been able to track down. Constellation Energy sign an exclusive
deal with Microsoft for three mile island check amern signed
a supply deal with a data center with a power
capacity of two hundred and fifty megawatts, and received an
(16:39):
expansion commitment for more beyond that for additional data center
loads in Missouri and Illinois. Alliant Energy says it has
executed multiple power deals with data centers, but it hasn't
really disclosed the details. Exellon Energy says it's in the
engineering phase of more than five gigawats of data center capacity.
(17:02):
American Electric Power AEP has signed letters of intent for
up to fifteen gigawatt of data centers by the end
of the decade. Excel Energy has opened a new or
is opening a new data center in Minnesota, expected to
come online next summer. Entergy has looking at the AWS
(17:24):
facility of Mississippi, and Pinnacle West Capital says it has
more than four thousands of megawatt committed to data customer centers,
with more on the way. And AES says that it's
signed agreement with Google for three hundred and ten megawatts
to support its Ohio data centers, and it previously announced
(17:45):
partnership with Google and signed a fifteen year purchase agreement
for almost a gigawatt in Texas. Talent Energy gigawatt data
center for Amazon's campus in Pennsylvania.
Speaker 2 (18:00):
See where I'm going with that and the last I
could keep going.
Speaker 1 (18:02):
But then next era's renewable segment saw arise of three
gigawatts worth of renewables and storage projects, including nuclear and
Google's demands for power centers. You get where I'm going, right,
We need more and more and more energy. So this
brings us to point three of today. The AI boom
(18:25):
has thrust Europe between power hungry data centers and.
Speaker 2 (18:29):
Its environmental goals.
Speaker 1 (18:31):
Europe's transition to greener energy has all been predicated on
two things, one getting rid of fossil fuels and two
reducing its power requirements. You see, Europe realized a long
time ago that solar and winder greats when the sun
is shining or the wind is blowing. But in order
(18:52):
to really pull this off, they needed to reduce the
amount of power that's needed. And if you've gone to Europe,
you know that air conditioning air con as it's called
over there, is more about conditioning the air than it
is cooling the air, trying to pull humidity out of
the air, and it doesn't work very well. If you've
(19:15):
ever traveled down the hotels inside of Europe and you
think the hallways are dimly lit, yeah they are right
for a reason. You got to put your key card
in when you get into your hotel room, or none
of the lights come on.
Speaker 2 (19:27):
That's to keep you from using energy.
Speaker 1 (19:30):
All of this has been built on this false premise
that we're going to use less energy, and as we've
already found out, we don't use less energy.
Speaker 2 (19:38):
We use more.
Speaker 1 (19:39):
And AI and data centers have been a very inconvenient
problem for those who want to solve or get to
net zero by reducing energy. It could come at a
substantial cost to Europe's decarbonization goal, as specialized chips used
in firms like in Video expected to result in energy
(20:02):
more and more energy use in these power hungry data centers.
High powered AI chips require extremely dense computing power. They
produce an exponential percent more heat that ultimately requires colder
water to still be able to support reliable cooling of
(20:23):
the chips. And this boom and artificial intelligence is ushering
in an environmentally conscious shift and how data centers operate.
There's a lot of pressure right to use less and okay,
chip manufacturers are trying to figure out how to cool
chips or how to use less energy, but it's not
(20:43):
just as even though the individual chips require a lot
more energy.
Speaker 2 (20:48):
Data centers as a whole are literally.
Speaker 1 (20:51):
Exploding in size and number everywhere, exponentially increasing what we need.
These high power chips, also known as graphics processing units
or GPUs, their type of AI, and they can consume
a lot. AI consume one hundred and twenty kilowatts of
energy in just three x three foot section of a
(21:16):
data center, So think about this in a three x
three cube and a data center, you're using the same
amount of power that you typically need and around twenty
homes it's extremely dense. So energy efficiency is very high
on the European Commission's agenda as it seeks to reach
(21:38):
its three goal of reducing energy consumption by twelve percent
in the next four years. But the truth is energy
consumption from data centers could rise by thirty percent by
twenty thirty and the advent of AI is expected to
continue boosting that number two to three times in some countries.
(22:00):
So the bottom line is that European Union energy officials
have been talking about ways of approaching this over time
and again they're stuck on efficiency. But what we realize
is you're going to need more energy or data centers
(22:22):
are going to go elsewhere. Industry is going to go elsewhere.
Economic growth is going to go to the places that
are stable, that have a solid workforce, and that have
energy security, what we define as the unlimited availability.
Speaker 2 (22:46):
Of accessible, reliable, and affordable energy.
Speaker 1 (22:49):
Until next time, you've been listening to charge conversations at
Joe Strucker Production.
Speaker 2 (22:54):
I'm Brigham account
Welcome to Charged Conversations, where we dig into the latest
and energy and energy related news. I'm your host, Brigham McCaw.
On this episode, we're going to take a look at
how natural gas is taking center stage, a revival of
nuclear power, and how artificial intelligence may undo the European
(00:22):
Union's plan for a greener economy. The biggest influx of
natural gas is coming and it's going to transform the
whole global market, with some analysts believing it could bring
about wider implications than previous expansions. When we talk about
shipping natural gas overseas, we're talking about converting it to
(00:45):
liquid and stuffing it on a ship, sending it across
the ocean where it's then used. This liquefied natural gas
has been a godsend for Europe after the Russian invasion
of Ukraine in twenty twenty two, with America coming to
the rescue. But the question this time around is whether
(01:05):
or not the expansion is likely lead to a state
of oversupply by the end of next year, and whether
that could even remain for several years with natural gas
prices moving cheaper, which would benefit the purchasers of American
natural gas LNG is much more expensive than US natural gas,
(01:27):
which is currently training at two dollars and twenty five
cents two and a quarter per million BTUs. Compare that
against Europe, where imported natural gas it's currently trading at
around twelve bucks per million BTUs. Part of this is
the fact of transportation, the cost of converting natural gas
(01:49):
into a liquid, putting it on a ship, sending it
across like we talked about, and then converting it back
to natural gas, stuffing it in a pipelining, sending it
on its way. But the other problem for Europe is
since twenty twenty two they've been relying on short term contracts.
Short term contracts bring you higher prices. Still, it's much
better than the height of the winter of twenty two
(02:12):
when Russia cut off gas, where natural gas was spiking
at about seventy dollars per million BTUs. Think about that
two and a quarter in the United States, twelve now
in Europe, but it was seventy at its height in
twenty twenty two. Even at twelve dollars per million BTU,
(02:34):
it's cost prohibitive because we all know that in order
to make electricity or industrial heat for furnaces, for steel factories,
for cement plants, for glass factories, for any facility, you
need a lot of energy. And if you're on the margins,
(02:55):
let's say you're making ten to fifteen percent gross profit
after all of sudden done, which is actually kind of
a rosy projection for heavy industries. Yeah, energy is expensive,
and as I've said on this program before, next to
the cost of raw materials and that of labor i e. People,
(03:18):
energy is the third most expensive component of making anything. Well,
if it's six hundred percent more than what the Americans
can do it for, who do you think is going
to have an economic advantage?
Speaker 2 (03:33):
Right us?
Speaker 1 (03:36):
Which is the whole point of having American energy dominance
around the world, being energy independent and having energy security. Well,
throughout this year, we've seen a growing course of analysts
that have started to warrant about tepid demand growth and
this booming wave after wave of export capacity brought about
(04:00):
by America's shale revolution and the fracking boom. There is
literally a pipeline of planned infrastructure and LG export facilities
that continues to flood the market. Now, it's unclear whether
all of these facilities will actually be built because, as
we'll talk about when we get to nuclear Just because
(04:21):
it's planned doesn't mean it actually ever makes it to completion.
But global LNG trade has doubled in the last decade,
growing from around two hundred and forty metric tons in
twenty fourteen to over four hundred metric tons last year.
Those are thousands to ten thousand shipments of natural gas
(04:44):
by ship each year. And we're not talking a small
boat that could cruise up and down the Mississippi or Ohio.
We're talking about ships that are six hundred to one
thousand feet long, as large as an aircraft carrier, acting
a lot of energy to take abroad. RBC, which is
the Royal Bank of Canada, has talked about global liquefication capacity.
(05:09):
That's a fancy term for how much natural gas can
we convert into liquid state and ship it each year.
They say that by the end of the decade this
is going to grow by another fifty percent, with US
and Katar holding on to their positions as the world's
largest suppliers with a combined market share of over fifty
(05:31):
percent by twenty thirty. This is really unheard of if
you think back just a couple decades, where we weren't
building energy export facilities. We were building energy import facilities
because we didn't have enough natural gas. Our energy policies
through the sixties and seventies and eighties made us sorely
(05:54):
dependent upon others. Yet again, thanks to the shale and
fracking revolution, America's energy renaissance was back now. Without us,
Europe would have darn near starved to death literally and
figuratively over the last couple of years. Also, we should
think about the fact that America has gone from an
(06:16):
ad importer to an ad exporter when we export energy products.
And I had to pause there for a minute because
I want this to resonate. It's not just energy, it's
a commodity. It's the same as selling a Ford or
a GM or a jaun Deere tractor, or a carrier,
(06:37):
furnace or air conditioning unit. We are selling something that
somebody else wants to pay us for. It reduces our
trade imbalance, brings money back into the United States, makes
us more wealthy than they would be without this trade.
I guess another way of looking at it's the same
as selling corner grain abroad. It's a product and people
(06:59):
want to buy it. Keep in mind that America also
went again from energy poverty energy scarcity into energy abundance,
where in twenty twenty four and for several years now,
we've been not only the largest producer of natural gas
in the world, but the largest producer of oil, surpassing
(07:22):
Russia and Saudi Arabia. And with the correct policies, we
can have low energy prices here at home and turn
it into a geopolitical powerhouse of literally soft and hard
power where we can help our friends and punish our
enemies moving forward, but keep in mind that Katar actually
(07:45):
shares the largest natural gas field in the world with Iran,
and other players are also out there, like Australia, have
long been met exporters. Finally, we have to see how
long Russia will remain dormant, even as it is today
increasing its own energy export capacity. Many private companies and
(08:06):
state owned entities have plans to boost capacity not only
to backstop European consumption, but also to capture what is
expected to be and now wait for this greater energy demands,
particularly in Asia. You see, and this is something else
we've talked about on the program. The world doesn't use
(08:27):
less energy. We talk about conservation and I'm not opposed
to conservation or efficiency. I think we should always try
to be as efficient as possible with our energy. We
don't waste, not want not right, get it. When I
was growing up, my parents said, don't waste that food
on your plate. Remember kids are starving in Africa. We
throw a lot of food away. We're very inefficient in
(08:48):
a lot of areas. And yes, we can be better,
but we can't save our way to prosperity. As we'll
get to and we talk about artificial intelligence. The world
continues to demand more, more and more energy. The higher
your standard of living, the more energy you use. There
(09:08):
is a direct correlation between a country's wealth and the
amount of energy it uses. Poor countries use less energy.
Rich companies countries use more energy. And world population wants
what we have, and world population continues to increase. So
demand from the Asia Pacific region, which is the biggest
(09:29):
import of LNG, is expected to grow by five to
seven percent annually. Around seventy percent of this growth is
going to stem from India, China, and South Korea. Meanwhile,
energy prices have really not seen major fluctuations despite these
escalating geopolitical tensions. Mayah No kidding, because when you have
(09:51):
energy security, you're inoculated against geopolitical conflicts.
Speaker 2 (09:58):
When you're dependent on the Mid East.
Speaker 1 (09:59):
In the Middle East is in turmoil like it is now,
your energy prices would be a heck of a lot
higher than they are now, because well, we don't need
Middle Eastern oil. I think there is a notion that
as we look forward, there will also be some very
interesting changes that will happen. All of this will know
(10:22):
more about after the presidential election, of course, but right
now it's important to also note that Europe has really
tried to eliminate Russian energy supplies, but that goal remains
more aspirational than reality, given that certain countries lack the
ability to produce or procure rather energy oil and gas
(10:43):
from other sources even if they wanted to. There simply
exists insufficient energy infrastructure ie pipelines to deliver it. And
it's a precautionary tale of what happens during periods of instability,
something political sciences have long warned Europe about, depending on
the Soviet Union slash Russia slash whoever they are today. Heck,
(11:08):
even Ronald Reagan warned about it during his time in office.
Fifty years ago. Topic two Microsoft deals signals booming demand
from data centers to power artificial intelligence. US utilities are
finally signing up concrete deals with data center operators as
the artificial intelligence wave sparks a surge and power demand
(11:33):
paving the way for higher profits in the coming quarters.
Data centers are expected to consume almost ten percent of
all the power generated in the United States by the
end of the decade. Compare that with only three percent
according to Goldman Sachs report. In twenty twenty two, Amazon
in particular goes nuclear and is going to invest more
(11:54):
than half a billion bucks to develop small modular reactors,
which is Amazon's subsidiary in cloud computing, announced they didn't
sign a deal with Dominion Energy, Virginia's utility company, to
explore the development of a small modular nuclear reactor near
Dominions existing North Anna Nuclear Power Station AWS is a
(12:18):
massive and increasing need for clean energy is it expands
into services.
Speaker 2 (12:22):
Of generative AII.
Speaker 1 (12:24):
The agreement is also part of Amazon's path to what
they're calling zero carbon emissions. That's right, nuclear power is
considered a net zero carbon emitter. Okay, sure, is there
waste from nuclear power plants. Yes, and that's something a
lot of people point to. And do we need a
permanent depository in the United States for nuclear waste? Absolutely,
(12:49):
But if we actually took all of the nuclear waste
that has occurred from power generation in this country from
nineteen sixty whatever, say a sixty seven, sixty nine forward
to today, we could stick it all on a football
field and it would be less than ten feet high.
Speaker 2 (13:09):
It's not really that much.
Speaker 1 (13:11):
So Amazon is going to spend that half a million
dollars in nuclear power, announcing three part projects from Virginia
to Washington State. Well, we're talking about SMRs. I think
it's important to know that it's an advanced type of
nuclear reactor with a very small footprint that allows it
to be built closer to the grid. In theory, they
(13:34):
have faster construction times than traditional reactors, allowing them to
come online sooner. You can also pair them in parallel,
so they're fit to expand exponentially as power where demand rises.
What makes SMRs so interesting is like a car, and okay,
(13:56):
let's be fair, they're bigger than a car, but they
will be built the same so once one is licensed,
you can simply copy it over and over again. That
substantially reduces the time and cost to deploy to market,
something the nuclear energy industry has struggled with mightily, since
(14:18):
no two reactors in the United States are actually carbon
copies of another. So this will hopefully change that. And
as we know our Amazon is the latest large tech
company to buy into nuclear power to fuel the growing
demands from data center. Google also announced that it will
purchase power from an SMR developer, Cairo's Power, and Constellation
(14:41):
Energy is restarting Three Mile Island.
Speaker 2 (14:44):
Yes, you heard it.
Speaker 1 (14:45):
Right, three Mile Island. Not the Damage reactor, but the
one sitting next to it to power Microsoft Data centers.
Now it's not the same as the Damage reactor, but
it's the one right next door that wasn't damaged, restarting
technolology from the seventies to power Microsoft data centers. Matthew Garman,
(15:05):
the CEO of AWS, said, we see the need for
gigawatts of power in the coming years and there's simply
insufficient supply and there won't be enough wind and solar
power to be able to meet the needs. So going
nuclear is a great opportunity. So Virginia is currently home
to half of the data centers in the US, and
(15:28):
in particular that northern Virginia area outside of Washington, d
C has been dubbed Data Center Alley, the bulk of
which is in Louden County. In fact, it's estimated that
seventy percent of the world's Internet traffic travels through Data
Center Alley each day. Virginia Governor Glenn Younkin released a
statement that said small modular nuclear actors will play a
(15:51):
critical role in positioning Virginia as a leading nuclear innovation hub.
AWS plans to invest another thirty five billion by twenty
forty to establish multiple data center campuses across Virginia. According
to Governor Ynkin, these SMRs will be directly powering the grid,
so they'll go to power everything that's part of the
data centers, but everything that's plugged into the grid will benefit.
(16:16):
Speaking of deals like Amazon, here are just a few
others that have occurred so far this year that I've
been able to track down. Constellation Energy sign an exclusive
deal with Microsoft for three mile island check amern signed
a supply deal with a data center with a power
capacity of two hundred and fifty megawatts, and received an
(16:39):
expansion commitment for more beyond that for additional data center
loads in Missouri and Illinois. Alliant Energy says it has
executed multiple power deals with data centers, but it hasn't
really disclosed the details. Exellon Energy says it's in the
engineering phase of more than five gigawats of data center capacity.
(17:02):
American Electric Power AEP has signed letters of intent for
up to fifteen gigawatt of data centers by the end
of the decade. Excel Energy has opened a new or
is opening a new data center in Minnesota, expected to
come online next summer. Entergy has looking at the AWS
(17:24):
facility of Mississippi, and Pinnacle West Capital says it has
more than four thousands of megawatt committed to data customer centers,
with more on the way. And AES says that it's
signed agreement with Google for three hundred and ten megawatts
to support its Ohio data centers, and it previously announced
(17:45):
partnership with Google and signed a fifteen year purchase agreement
for almost a gigawatt in Texas. Talent Energy gigawatt data
center for Amazon's campus in Pennsylvania.
Speaker 2 (18:00):
See where I'm going with that and the last I
could keep going.
Speaker 1 (18:02):
But then next era's renewable segment saw arise of three
gigawatts worth of renewables and storage projects, including nuclear and
Google's demands for power centers. You get where I'm going, right,
We need more and more and more energy. So this
brings us to point three of today. The AI boom
(18:25):
has thrust Europe between power hungry data centers and.
Speaker 2 (18:29):
Its environmental goals.
Speaker 1 (18:31):
Europe's transition to greener energy has all been predicated on
two things, one getting rid of fossil fuels and two
reducing its power requirements. You see, Europe realized a long
time ago that solar and winder greats when the sun
is shining or the wind is blowing. But in order
(18:52):
to really pull this off, they needed to reduce the
amount of power that's needed. And if you've gone to Europe,
you know that air conditioning air con as it's called
over there, is more about conditioning the air than it
is cooling the air, trying to pull humidity out of
the air, and it doesn't work very well. If you've
(19:15):
ever traveled down the hotels inside of Europe and you
think the hallways are dimly lit, yeah they are right
for a reason. You got to put your key card
in when you get into your hotel room, or none
of the lights come on.
Speaker 2 (19:27):
That's to keep you from using energy.
Speaker 1 (19:30):
All of this has been built on this false premise
that we're going to use less energy, and as we've
already found out, we don't use less energy.
Speaker 2 (19:38):
We use more.
Speaker 1 (19:39):
And AI and data centers have been a very inconvenient
problem for those who want to solve or get to
net zero by reducing energy. It could come at a
substantial cost to Europe's decarbonization goal, as specialized chips used
in firms like in Video expected to result in energy
(20:02):
more and more energy use in these power hungry data centers.
High powered AI chips require extremely dense computing power. They
produce an exponential percent more heat that ultimately requires colder
water to still be able to support reliable cooling of
(20:23):
the chips. And this boom and artificial intelligence is ushering
in an environmentally conscious shift and how data centers operate.
There's a lot of pressure right to use less and okay,
chip manufacturers are trying to figure out how to cool
chips or how to use less energy, but it's not
(20:43):
just as even though the individual chips require a lot
more energy.
Speaker 2 (20:48):
Data centers as a whole are literally.
Speaker 1 (20:51):
Exploding in size and number everywhere, exponentially increasing what we need.
These high power chips, also known as graphics processing units
or GPUs, their type of AI, and they can consume
a lot. AI consume one hundred and twenty kilowatts of
energy in just three x three foot section of a
(21:16):
data center, So think about this in a three x
three cube and a data center, you're using the same
amount of power that you typically need and around twenty
homes it's extremely dense. So energy efficiency is very high
on the European Commission's agenda as it seeks to reach
(21:38):
its three goal of reducing energy consumption by twelve percent
in the next four years. But the truth is energy
consumption from data centers could rise by thirty percent by
twenty thirty and the advent of AI is expected to
continue boosting that number two to three times in some countries.
(22:00):
So the bottom line is that European Union energy officials
have been talking about ways of approaching this over time
and again they're stuck on efficiency. But what we realize
is you're going to need more energy or data centers
(22:22):
are going to go elsewhere. Industry is going to go elsewhere.
Economic growth is going to go to the places that
are stable, that have a solid workforce, and that have
energy security, what we define as the unlimited availability.
Speaker 2 (22:46):
Of accessible, reliable, and affordable energy.
Speaker 1 (22:49):
Until next time, you've been listening to charge conversations at
Joe Strucker Production.
Speaker 2 (22:54):
I'm Brigham account
Popular Podcasts
NFL Daily with Gregg Rosenthal
Gregg Rosenthal and a rotating crew of elite NFL Media co-hosts, including Patrick Claybon, Colleen Wolfe, Steve Wyche, Nick Shook and Jourdan Rodrigue of The Athletic get you caught up daily on all the NFL news and analysis you need to be smarter and funnier than your friends.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com