How imminent is a worldwide electricity outage? Amidst an escalating demand for power, the United States confronts a concerning deficit in energy supply."
Who is Germán & Co?
From Puerto Octay, overlooking Llanquihue Lake in southern Chile, the setting for Gaspar Antillo's film Nobody Knows I'm Here, I try to examine the mind of my friend and colleague, Germán Toro Ghio.
'In the divine vineyard, you choose your own path is a beautiful metaphor.'
As we make our way along the journey of life, some of us choose to travel in the fast lane in vehicles with sleek engines and plush seats, while some of us prefer slower speeds and budget-friendly tolls on scenic routes. Some of us endure crowded buses with loud music or navigate challenging terrains, facing harsh weather conditions and wildlife.
Germán’s stories feature individuals who have chosen unconventional paths in the journey of life: some of them use elevators, rappel down cliffs, or fly in contraptions. His explorations endlessly take his viewers on exciting adventures, from the unease of a Moscow hotel to the excitement of jungle escapades in Nicaragua, from brilliantly-lit worlds pulsing with electricity to dark worlds immersed in infinite blackouts.
Finally, Germán tantalizes us with an eclectic mix in his creative pot, leaving us eager for more of his daily works. His narratives enrich and untangle the most complex history by shedding light on experiences beyond the battlefields and palaces.
Juan Forch
*Juan Forch is a political scientist, filmmaker, writer, publicist and the co-creator of the influential "NO" political campaign, a significant milestone in the history of political communication. His unique creations have inspired an Oscar-nominated film by Pablo Larraín featuring Gael García Bernal, solidifying his legacy as a political marketing mastermind. Notes from the editor:
The looming possibility of a widespread blackout is becoming increasingly concerning as the strain on the power grid continues to escalate…
Many will say how crazy this is... But the truth is not...
In the 2021 Electricity Market report from the International Energy Agency (IEA) warns of a significant increase in global electricity consumption. And this stark warning from the IEA came eight months before the Soviet gas squeeze left Europe in a serious supply restriction crisis, and the most severe damage to the economy... Last week came another warning to this effect from the Washington Post...
The truth is that the market is currently being overlooked, necessitating a closer examination of its requirements to provide the necessary adaptability to accommodate the increasing prevalence of renewable energy sources.
Regulatory frameworks need to be updated and adjusted to the current surge in energy demand to facilitate a seamless transition to emerging technologies. Achieving a successful market transition requires a delicate balance between sustainability, reliability, and affordability.
Furthermore, it is becoming increasingly evident that there is a need to strike a balance between sustainability, reliability, and affordability. Otherwise, it will be challenging to manage the transition to incorporate the new technologies effectively.
Finally, how can we assess the severity of the prolonged delays in permitting processes that hinder the acceleration of market transition? If the signs are not taken seriously, we will be left uninformed.
In December 2023, Energy Central celebrated top contributors in the Energy & Sustainability Network at the 'Top Voices' event. Winners were featured in 6 articles, demonstrating community recognition. The platform enables professionals to share their work, interact with colleagues, and collaborate with influencers. Congratulations to the 2023 Top Voices: David Hunt, Germán Toro Ghio, Schalk Cloete, and Dan Yurman for demonstrating their expertise. - Matt Chester, Energy Central
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"Imagine a crystal-clear river flowing through the creation of a vast and boundless sustainable park that stretches to every corner of the world. This analogy perfectly captures AES's remarkable efforts in the global energy industry...
Image by Germán & Co via Shutterstock...“The 2021 Electricity Market report presents a comprehensive analysis of the current scenario, revealing the alarming rise in the global demand for power.
"Electricity demand globally is growing faster than the expansion of renewable energy sources, leading to a significant increase in the use of fossil fuels for electricity generation. According to a recent report by the International Energy Agency (IEA), there will be a 5% increase in electricity demand in 2021, with almost half of this demand being met by fossil fuels, especially coal. The trend of increasing global electricity demand poses a threat of record-high carbon dioxide emissions from the power sector in 2022.
Although renewable energy sources such as hydropower, wind, and solar photovoltaic are expanding rapidly, they require support to meet the increasing demand, resulting in a notable increase in coal power usage. The report predicts that global electricity demand will increase by almost 5% in 2021 and 4% in 2022, mainly due to the global economic recovery.
Most of this growth is expected to come from the Asia Pacific region, particularly China and India. Despite the significant growth of renewable energy sources, they are only projected to meet approximately half of the expected increase in global electricity demand over the next two years. It is predicted that fossil fuel-based electricity generation will meet 45% of the additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest.
This will result in a projected increase of 3.5% in carbon emissions from the electricity sector in 2021 and 2.5% in 2022, reaching an all-time high. The report emphasizes the significance of investing in clean energy technologies, especially renewables and energy efficiency, to shift towards a sustainable path and reach net-zero emissions by mid-century.
Amid explosive demand, America is running out of power...
WP Story by Evan HalperVast swaths of the United States are at risk of running short of power as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation's aging power grid.
In Georgia, the demand for industrial power is surging to record highs, with the projection of new electricity use for the next decade now 17 times higher than it was only recently. Arizona Public Service, the largest utility in the state, is also struggling to keep up. It projects that it will run out of transmission capacity before the end of the decade unless significant upgrades are made.
Northern Virginia requires several large nuclear power plants to support the new data centers that are planned and under construction. Texas, where electricity shortages are already routine on hot summer days, faces the same dilemma.
The soaring demand is sparking a scramble to extract more energy from an aging power grid while compelling commercial customers to take extraordinary measures to secure energy sources, such as constructing their own power plants."
When you look at the numbers, they are staggering," said Jason Shaw, chairman of the Georgia Public Service Commission, which regulates electricity. It makes you scratch your head and wonder how we ended up in this situation. How were the projections so far off? "This has created a challenge like we have never seen before."
A significant factor behind the skyrocketing demand is the rapid innovation in artificial intelligence, which is driving the construction of large warehouses of computing infrastructure that require exponentially more power than traditional data centers. AI is also a part of the significant expansion of cloud computing.
Tech companies such as Amazon, Apple, Google, Meta, and Microsoft are actively searching across the nation for locations to build new data centers, while many smaller companies are also looking for suitable sites.
The proliferation of crypto mining, where currencies like Bitcoin are transacted and minted, drives the growth of data centers. This is putting new pressure on an overtaxed grid—the network of transmission lines and power stations that distribute electricity across the country. Bottlenecks are mounting, causing delays for both new energy generators and clean energy providers, as well as large consumers, in getting connected.
The situation is sparking battles across the nation over who will pay for new power supplies, with regulators worrying that residential ratepayers could be stuck with the bill for costly upgrades. It also threatens to stifle the transition to cleaner energy as utility executives lobby to delay the retirement of fossil fuel plants and bring more online. The power crunch imperils their ability to supply the energy needed to charge the millions of electric cars and household appliances required to meet state and federal climate goals.
According to the International Energy Agency, the nation's 2,700 data centers consumed more than 4% of the country's total electricity in 2022. Its projections show that by 2026, they will consume 6 percent. Industry forecasts show that data centers are consuming a larger share of U.S. electricity in the coming years. This trend is occurring as demand from residential and smaller commercial facilities remains relatively stable, due to the continuous improvement in efficiencies of appliances and heating and cooling systems.
Data center operators are eager to connect to regional electricity grids, while the Biden administration's industrial policy is attracting companies to build factories in the United States at a pace not seen in decades. Manufacturers of "clean tech," such as solar panels and electric car batteries, are attracted by lucrative federal incentives.
According to the Electric Power Research Institute, a research and development organization, companies announced plans to build or expand more than 155 factories in this country during the first half of the Biden administration. Since the early 1990s, factory construction has accounted for a significant portion of U.S. construction spending, according to the group.
Utility projections for the power they will need over the next five years have nearly doubled. According to a review of regulatory filings by the research firm Grid Strategies, growth is expected.
Chasing power previously, companies tried to locate their data centers in areas with significant internet infrastructure, a large pool of tech talent, and attractive government incentives. But these locations are becoming crowded.
Communities with little connection to the computing industry now find themselves in the middle of a land rush, with data center developers flooding their markets with requests for grid hookups. Officials in Columbus, Ohio; Altoona, Iowa; and Fort Wayne, Indiana, are being aggressively courted by data center developers.
However, the power supply in some of these secondary markets is already running low, pushing developers further out, in some cases into cornfields, according to JLL, a commercial real estate firm catering to the tech industry.
Grid Strategies warns in its report that "there are real risks that some regions may miss out on economic development opportunities because the grid can't keep up
.""Across the board, we are seeing power companies saying,
'We do not know if we can handle this; we have to audit our system; we have never dealt with this kind of influx before,'" said Andy Cvengros, managing director of data center markets at JLL. "Everyone is now chasing power."
They are willing to look everywhere for it.
"We saw a quadrupling of land values in some parts of Columbus and a tripling in areas of Chicago," he said. "It is not about the land." It is about access to power. Some developers, he said, have had to sell the property they bought at inflated prices at a loss after utilities became overwhelmed by the rush for grid hookups.
Rethinking Incentives It is all happening simultaneously, and the energy transition is leading a large number of Americans to depend on the power grid to power vehicles, heat pumps, induction stoves, and all kinds of other household appliances that used to be fueled by fossil fuels. Much clean energy is also needed to create the green hydrogen championed by the White House.
Developers are rushing to build plants that can produce this powerful zero-emissions fuel, enticed by generous federal subsidies.
Planners are increasingly concerned that the grid will not be green or powerful enough to meet these demands.
Soaring power consumption is already causing delays in the closure of coal plants in Kansas, Nebraska, Wisconsin, and South Carolina.
In Georgia, the state's primary power company, Georgia Power, stunned regulators when it recently revealed how wildly inaccurate its projections were, attributing the discrepancy to data centers.
The demand has prompted Georgia officials to reconsider the state's policy of offering incentives to attract computing operations. These operations generate few jobs but can boost community budgets through the hefty property taxes they pay. The top leaders of Georgia's House and Senate, both Republicans, are advocating for a temporary halt in data center incentives.
Georgia regulators are currently investigating ways to safeguard ratepayers while also guaranteeing an adequate power supply to meet the demands of the state's highly valued new occupants: clean-technology companies.
Factories supplying the electric vehicle and green energy markets have been rushing to locate in Georgia, largely due to promises of affordable and dependable electricity.
When the data center industry began looking for new hubs, "Atlanta was like, 'Bring it on,'" said Pat Lynch, who leads the Data Center Solutions team at the real estate giant CBRE. "Now Georgia Power is warning of limitations."
Utility shortages in the face of these data center demands are occurring in almost every market. Utility wires in Atlanta. Georgia regulators aim to safeguard ratepayers while also guaranteeing an adequate power supply for the state's most valued new occupants: clean-tech companies.
A similar dynamic exists in another region: the Pacific Northwest. In Oregon, Portland General Electric recently doubled its forecast for new electricity demand over the next five years, citing data centers and "rapid industrial growth" as the drivers.
The power crunch disrupted the plans of Michael Halaburda and Arman Khalili, long-time data center developers. Their latest project involves converting a mothballed tile factory in the Portland area. The two were under the impression only a couple of months ago that they would be fine with obtaining the electricity needed to run the place.
The power company then informed them that a "line and load study" would be required to determine if it could provide the facility with 60 megawatts of electricity, approximately the amount necessary to power 45,000 homes.
Going off the grid The Portland project that Halaburda and Khalili are developing will now be powered largely by off-the-grid, high-tech fuel cells that convert natural gas into low-emission electricity.
The technology will be supplemented by whatever power can be secured from the grid. The partners have decided that for their next project in South Texas, they will not rely on the grid at all. Instead, they will drill thousands of feet into the ground to extract geothermal energy.Halaburda sees the growth as beneficial for the country and the economy.
"But no one took into consideration where this is all going," he said. "In the next couple of years, unless there is a real focus on expanding the grid and making it more robust, we are going to see opportunities fall by the wayside because we can't get power to where it is needed.
“Companies are increasingly turning to off-the-grid experiments as their frustration with the logjam in the nation's traditional electricity network mounts.
Microsoft and Google are among the companies hoping that energy-intensive industrial operations can ultimately be powered by small nuclear plants on-site. Microsoft even utilized AI to streamline the cumbersome process of obtaining plant approvals.
Microsoft has also signed a deal to purchase power from a company that is working on developing zero-emissions fusion power. However, going off the grid presents significant regulatory and land acquisition challenges. For example, the type of nuclear plants envisioned still needs to be operational in the United States. Fusion power does not yet exist.
The big tech companies are also exploring ways AI can help make the grid operate more efficiently. According to Google, they are developing platforms that can shift computing tasks and their associated energy consumption to times and locations where carbon-free energy is available on the grid during peak power demand. However, meeting both their zero-emissions pledges and their AI innovation ambitions is becoming increasingly complicated as the energy needs of their data centers grow.
"These problems are not going away," said Michael Ortiz, CEO of Layer 9 Data Centers, a U.S. company aiming to circumvent the bottleneck by constructing facilities in Mexico.
"Data centers will need to become more efficient, and we must utilize cleaner sources of energy, such as nuclear power. “Officials at Equinix, one of the world's largest data center companies, have been experimenting with fuel cells as backup power. However, they remain hopeful that they can continue to rely on the power grid as their main source of electricity for new projects.
The logjam is already pushing officials overseeing the clean-energy transition at some of the nation's largest airports to look beyond the grid. The energy required to charge fleets of electric rental vehicles and ground maintenance trucks alone is immense. An analysis shows that electricity demand will double by 2030 at the Denver and Minneapolis airports. By 2040, they will need more than triple the electricity they are using now, according to the study commissioned by the car rental giant Enterprise, Xcel Energy, and Jacobs, a consulting firm.
"Utilities are not going to be able to move quickly enough to provide all this capacity," said Christine Weydig, Vice President of Transportation at AlphaStruxure, a company that designs and operates clean-energy projects. "The infrastructure is not there." Different solutions will be needed. Airports are considering significantly expanding the utilization of clean-power "microgrids" that they can construct on-site.
The Biden administration has prioritized easing the grid bottleneck, but it is politically fraught and limited in federal powers. Building the transmission lines and transfer stations requires extensive land acquisitions, thorough environmental reviews, and negotiations to determine cost responsibilities.
The process runs through state regulatory agencies, and fights between states over who bears the cost and where power lines should be placed routinely hinder and delay proposed projects. The number of new transmission lines installed in the United States has significantly decreased since 2013, when 4,000 miles were added. Now, the nation struggles to bring online even 1,000 new miles a year.
The slowdown has real consequences not just for companies but also for the climate. A group of scientists, led by Princeton University professor Jesse Jenkins, warned in a report that by 2030, the United States risks losing out on 80% of the potential emission reductions from President Biden's signature climate law, the Inflation Reduction Act, if the pace of transmission construction does not pick up dramatically now.
The proliferation of data centers increases pressure on states to approve new transmission lines, complicating the task. Officials in Maryland are protesting a $5.2 billion infrastructure plan designed to transmit power to large data centers in Loudoun County, Virginia. The Maryland Office of People's Counsel, a government agency that advocates for ratepayers, criticized grid operator PJM's plan as "fundamentally unfair." The agency argued that the plan could result in Maryland utility customers bearing the cost of power transmission to data centers that Virginia actively pursued and is using to generate significant tax revenue.
In Texas, a dramatic increase in data centers for crypto mining is sparking a debate over whether they are a costly burden on an overtaxed grid. An analysis by the consulting firm Wood Mackenzie found that the energy required by cryptocurrency operations seeking to connect to the grid would amount to a quarter of the electricity consumed in the state during peak demand. Unlike data centers operated by big tech companies like Google and Meta, crypto miners typically do not invest in renewable energy projects to provide sufficient zero-emission energy to the grid for their operations.
The result, as stated by Ben Hertz-Shargel, the author of the Wood Mackenzie analysis, is that the energy consumption of cryptocurrencies poses a threat to Texas' capacity to support other energy-intensive activities crucial for fostering innovation and economic development.
These activities include the operation of factories producing zero-emission green hydrogen fuel and industrial charging stations facilitating the electrification of truck and bus fleets.
After decades of readily available power, regulators and utility executives across the country are generally not empowered to prioritize which projects get connected. It is first come, first served, and the line is growing longer.
To address the issue, some states have enacted laws to safeguard the access of crypto mining to significant power resources."Lawmakers need to consider this," Hertz-Shargel emphasized when discussing the allocation of an increasingly limited power supply. There is a risk that strategic industries may face challenges when trying to establish themselves in those states.