Artificial intelligence demand spurs energy innovation as power usage soars
Energy experts recognize the need for additional power sources and are turning to new technology and infrastructure to meet demand.
“As an industry, we are investing approximately $1.1 trillion in our infrastructure over the next five years to ensure we meet this need and demand,” said Exelon CEO Calvin Butler.
In 2024, data centers consumed approximately 1.5% of global electricity use, and demand continued to grow. Consumption forecasts for this year show that data centers are expected to become the world’s fifth largest energy consumer, with usage falling between the amounts consumed by Japan and Russia.
Exelon is one of the largest electric utility holding companies in the United States. It owns and operates the electrical grid infrastructure that provides electricity to homes and businesses.
“We are a pure transmission and distribution company. So my responsibility every day is to operate a safe, reliable and resilient grid. So I am your pipes and wires. I do not control the generation,” Butler said. “What we see in the PJM footprint is that supply costs have increased by 645% since 2024.”
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Engineers are working at the Commonwealth Fusion Systems facility as the company develops fusion technology that could provide a new source of carbon-free electricity for the power grid.
To keep up with the demand for artificial intelligence (AI), companies are getting creative.
Commonwealth Fusion Systems, based in Devens, Massachusetts, is working to add reliable power to the grid 24/7 through fusion energy, the power source of the sun and stars.
“When you take light nuclei like hydrogen and put them together and release energy in the process. That energy is released in the form of heat, which you can then convert into electricity,” said Brandon Sorbom, co-founder and chief scientific officer of Commonwealth Fusion Systems.
The company’s new studies show that some in the scientific community are optimistic about fusion for commercial use.
Commonwealth Fusion Systems estimates that the ARC fusion power plant could produce 50 times more power than it consumes, and that each location could generate enough electricity to power a small city for a full year, using only as much fuel as a pickup truck could carry. The articles were co-authored by 58 scientists from major universities of technology with the support of public-private partnerships and programs.
“We think one of these plants could power approximately 280,000 American homes,” Sorbom said. “It releases approximately 10 million times more energy per weight of chemical energy through reaction.”
Fusion still has a lot of uncertainty. MIT researchers estimate that fusion could provide 10 percent to 50 percent of electricity, but the institution’s forecast suggests it won’t come to fruition until 2100. Other scientists say that if any power plants reach the grid, it is expected to be an expensive process.
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Commonwealth Fusion Systems’ planned ARC fusion power plant is a commercial-scale facility designed to produce carbon-free electricity to help meet growing energy demand from AI and data centers. (Commonwealth Fusion Systems)
“The biggest challenge we’re facing right now is actually the integration piece of the system. So we’re building this complex commercial system for the first time,” Sorbom said. “It’s kind of like there’s this big dance we’re doing right now: putting all the pieces in at the right time and in the right order and putting them together in a way that we know when we turn the machine on, it’s going to perform exactly as modeled.”
Rather than adding new energy, some companies are moving data centers to locations where less power is needed.
“The Nordics are rich, stable, have well-educated populations, business-friendly, great regulations and great fiber connections. There’s also plenty of energy; it’s green and cheap,” said Philippe Sachs of AI infrastructure founder Nscale. “There’s not a lot of competing industrial demand. So they’re probably the best markets in the world with data centers.”
Nscale creates, owns and operates infrastructure for data centers in the Nordic countries. The company buys Nvidia chips to rent to customers and provides cloud services and other artificial intelligence services. Sachs is the company’s head of Europe, Middle East and Africa and global affairs.
“I think we started with a thesis around power and power scarcity, and we realized that in the age of artificial intelligence, it’s important that you’re in the most attractive power markets, and there’s probably no more attractive place for that than the Arctic Circle,” Sachs said.
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A technician works on fusion energy equipment at Commonwealth Fusion Systems, one of several companies developing technologies aimed at meeting growing global demand for electricity. (Commonwealth Fusion Systems)
Scandinavian countries have abundant land and green energy. The cool climate also reduces the amount of energy required to cool the hardware.
“Given that the weather is cold for many months of the year, we can use the heat generated by the servers to heat homes. Thus, we can create a local ecosystem that is extremely efficient compared to other markets,” said John Wernvik of Sweden-based EcoDataCenter.
EcoDataCenter designs, builds and operates data center buildings, then brings in the customer’s hardware and keeps it running efficiently.
“We work with the largest technology companies in the world and meet their computing needs and are building the runway in terms of data center capacity here in Sweden,” said Wernvik, the company’s head of external affairs and sustainability.
The market in Norway is particularly heating up; 50% of the country’s territory is located above the Arctic Circle. It also has the lowest energy prices in Europe.
“You don’t have a huge industrial demand for this power, especially less than in the United States, which favors the Arctic Circle,” Sachs said. he said. “In some places, like Northern Norway, where our data centers are, the grid isn’t even connected to the population center in the South, where the capital Oslo is located. So there’s no reason why what you do there should affect electricity prices in the big cities.”
Commonwealth Fusion Systems hopes to have a viable nuclear fusion reactor by the early 2030s. (Commonwealth Fusion Systems)
The Nordic countries are home to approximately 134 existing data centers, with 71 expected to come online in the near future.
“AI computing requires a lot of energy, and energy is a large part of the cost of running these large-scale systems, and doing this efficiently in a sustainable way is of course extremely beneficial for our customers,” Wernvik said. “Over the last 24 months, we have seen an exponentially increasing number of data center builds being announced across the Nordic countries that also want to leverage these foundations.”
The construction costs of Arctic data centers are quite high. According to data center consulting firm Turner and TownsendScandinavian capitals Oslo, Stockholm, Helsinki and Copenhagen are among the 11 countries with the highest construction costs.
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“Many companies building data centers in Scandinavian countries that have not built data centers before are often delayed,” Wernvik said. “It’s a complex thing to deal with the weather conditions and seasonal changes that we’re going to have over the next 12 months. So if you’re coming in from outside to build, it’s definitely a challenge.”
Despite the challenges of adapting to increasing energy demand, companies around the world are working to find a solution.
“There’s a really strong relationship between energy use and quality of life,” Sorbom said. “You want to find ways to produce more energy overall and do it cleanly and safely.”
