During National Clean Energy Week, Lisa Jacobson, president of the Business Council for Sustainable Energy (BCSE), led a panel discussion about how artificial intelligence (AI) is impacting the energy industry. She opened the conversation by stating that “AI is changing how we generate, message, manage, deliver, and serve our customers with energy services. Improving forecasting, grid performance, and resource efficiency is critical. We need access to affordable, reliable, and clean power and a regulatory system that’s built for speed.”
Yvonne McIntyre, vice president of federal affairs at Pacific Gas and Electric Company (PG&E), whose service territory encompasses more than 70,000 square miles and serves 60 million customers, acknowledged that the electricity industry is experiencing data center-driven load growth after a relatively stagnant 40 years. PG&E is rising to meet the moment; last year’s cluster study for data center projects successfully advanced 18 applications to bring 1.4 gigawatts of new interconnection online in the next few years, and this year’s cluster study resulted in 21 more applications.
With this new infrastructure investment, the company is working to ensure that the projects are built quickly and that the cost is shared across its customer base. Over the summer, the California Public Utilities Commission granted partial approval for an interim rule that will streamline grid connections, rather than handling transmission-level applications from data centers and electric vehicle charging stations on a case-by-case basis. The company also projects that by spreading its fixed costs across a bigger customer base, for every gigawatt of new demand from the data centers, its other electric customers will save up to 2% on their monthly bills.
Joel Yu, senior vice president of policy and external affairs at Enchanted Rock, a flexible power solution provider, explained that a behind-the-meter generation strategy provides grid operators with additional tools to utilize load flexibility derived from technologies such as solar panels or batteries to address contingencies like load oscillations. “A lot of these loads are going to have to cite behind-the-meter resources, distributed resources, to provide that critical 500 hours a year, 1,000 hours a year, to both supplement or complement the renewable portfolio that the system is building out, but also to mitigate the transmission overload issues that come with interconnecting a large load,” he said.
Going forward, Yu is optimistic: “I think the demand is there. There’s a lot of work to be done still on opening up the regulatory pathways, working with utilities and state regulators to enable that flexibility to be used the way it needs to be right now.” He highlighted examples among Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs), with PJM Interconnection and the Southwest Power Pool examining their programs for non-capacity backed load or high-impact large load (HILL). On the state level, he pointed out Texas Senate Bill 6, which was passed by the legislature over the summer to provide new operating requirements for large power users during periods of high grid stress.
Photo Courtesy The Pew Charitable Trusts
Laura Lightbody, Director of Energy Modernization at The Pew Charitable Trusts, explained that the company is modernizing the grid and integrating clean energy sources to address the rise of AI. She notes that she has seen the same language being used in red, blue, and purple states: “If we actually strip their names and their party affiliations from them, you really get the same quote,” with states eager to advance policies to help constituents who are facing high costs. A recent executive order from Arizona Governor Katie Hobbs (D), which focuses on cutting costs and building a diverse portfolio of energy resources, bears a striking resemblance to the energy abundance initiative spearheaded by Utah Governor Spencer Cox (R), for example.
A significant amount of movement is actually occurring at the state level, rather than at the federal level. Lightbody highlighted advanced transmission technologies as a solution that can be deployed far faster than putting up new transmission lines, enabling the grid to bring projects out of the interconnection queue and online. Sixteen states have already passed regulations or policies that require utilities to use these software and hardware solutions in their planning and toolboxes.
Ewelina Czapla, government affairs and public policy manager at Google, said it is not lost on Google or any company involved in the AI space that “there is potentially trillions of gains to GDP to be had.” She added, “We’ve consistently seen economic growth paired with energy demand throughout U.S. history… and we’re seeing that sort of reemerge here with this AI opportunity.” At the same time, it is crucial for the country to be a global leader in the AI race against competitors like China and Russia.
Czapla listed several factors that have contributed to the U.S. being such a technological success, particularly seen in Silicon Valley. The formula, as she laid it out, is that “if you have economic and political stability, you have available, readily available, reliable and cheap electricity. You’re going to see that kind of industrial commercial investment happen. And that’s really what’s underpinning quite a lot of this AI infrastructure in the U.S. and infrastructure decisions broadly.”
In addition to the beneficial regulatory structure and available financing that are already in place, it is also essential to have power at home. That includes building data centers, which consume more power than the loads that have come online in past decades, and which will simultaneously spur the needs of domestic manufacturing supply chains. For example, by 2027, Google will have nine manufacturing facilities in the U.S. that produce components for its technical infrastructure. Enhanced transmission will be key to all of this, with grid-enhancing technology implementing AI as a tool to improve the efficiency of existing lines in the short term, and permitting reform as an essential long-term strategy. Additionally, in each market where companies like Google enter, they have a duty to do so responsibly.
