April 1st, 2024 – The upsurge in demand for energy to power data centers, therefore the amount of the latter required to fuel the ongoing AI revolution could lead to a “golden era” for natural gas, according to executives. Managers’ belief, strongly supported by data, is that renewable energy sources and batteries won’t be enough to cope with the soaring energy needs, and that fossil fuels will still play a crucial role in the energy landscape.
The energy issue is widely controversial since the US Government is still providing incentives to developers of clean energy with the aim of bringing the carbon emissions of the electricity grid to zero; but at the same time, it looks like those won’t be able to bear the AI growing needs in the future and some sort of reliance on carbonized fuels must be part of the game.
Leading figures of investment companies have reportedly expressed their optimism as for the need for gas of the tech giants, as Toby Rice, the chief executive of EQT who affirmed “it will not be done without gas” or Doug Kimmelman, ECP founder and senior partner who described gas as the only cost-efficient energy generation capable of providing the constant energy flow required by such big technology companies to power the AI boom.
S&P Global Commodity Insights predict that the expansion plans of giants, like Microsoft or Google, will together consume almost a tenth of US power demand, by 2035, up from 4.5% in 2025; also, the International Energy Agency estimates that demand of energy coming from data centers will increase to 1000TWh by 2026, which means that the increase would be equivalent to Germany’s total power demand.
Producers aim to satisfy future tech giants’ needs through sale of their gas, on the other hand, technology leaders have already set goals to use certified green electricity only in their incoming operations: such contrast makes it difficult to forecast the outcomes of the AI revolution, but S&P head of Power and Renewables Xizhou Zhou expressed the group’s optimism for gas-fired power generation to fall and green energy to soar by the end of the decade.
Author: Ilaria Savignoni