Are the world power grids sustainable enough to handle the Herculean energy needs of technologies of the future?

IS THE WORLD RUNNING OUT OF ELECTRICITY?? 

A power grid is a complex network that constitutes the generation,  transmission and distribution of power to consumers. It is a life line for  seamless functioning of the society. However, today the global power  girds sustainability and longitivtiy is endangered by the impending  demand generated by new age technologies. It is predicted by IEA that  by 2040 the would will need to add or revamp 80 million km of grids  (equivalent to the capacity present today) to to achieve electricity  security and achieve its environment climate targets.  

The developed world is encountering the challenge of old power  infrastructure to meet the need for electrification of transportation (widespread shift to EVs), factories etc, incorporation of renewable  sources of energy to the power grid, augmenting power of power  hungry artificial intelligence, blockchain, hydrogen production and  more. Around 70% of transmission line in the United States are older  than 25 years. In Europe 40% of the power grid is 40 years old or more.  

There is dearth of and long lead times for basic gird equipments and  raw materials (like copper- rising prices) or energy infrastructure eg: transmission wires, transformers, electrical wires, cables and more for  creating, modifying or renovating the power grids. According to an  article in FT the demand for high voltage cables has been on rapid rise,  between 2015-20 only $3 billion projects were awarded per year  however that figure had skyrocketed to $11 billion in 2022. According to Massimo Battaini (CEO of Prysmian- into the business of production of  electrical cables- European firm) the value of new orders will be more than $20 billion dollars, he also mentions that the company is booked  till FY 26/27 suggesting investments being made in the space. While  the European Union’s power/national grid is very much integrated between borders there are multiple projects that are on hold due to  shortage in basic grid equipments as discussed above.  

So what is driving the incessant need for power? 

AI and Blockchain- Data Centres 

Innovation and advancements in AI play a major factor leading to  enormous need for power as the computing infrastructure needed to  support AI is very different from the traditional data centres.  Furthermore crypto- mining and blockchain are creating demand for  data centres as well. According to IEA there are around 2700 data  centres in the US that enervate 4% of total electricity (2022) and is  believed to increase to 6% by 2026. It is believed that information and communication technologies will consume around 8000 TwH  (electricity and power) by 2030.  

It is predicted that AI may consumes ten times more power by 2026. A  search on ChatGPT commands 10 times electricity v/s one google  search. Training a model like chatGPT and the machine learning behind  it is astronomically energy intensive. Considering ChatGPT caters to  200 million requests per day, it is devouring more than half million kWh  of electricity. Alex de Vries suggests if google incorporates AI in every search, its energy consumption would rise 29 billion kWh every year  (more than energy consumed in Croatia, Guatemala and Kenya).  

Nvidia’s (the famous chip maker that is bolstering the AI wave) H100  GPUs consumes as much as 700 W of power equal to or more than the  consumption of an average American household. At the moment we are  exploring AI at its nascent stages which still requires Herculean  amounts of power to support it. Once we reach the level of AGI  (artificial general intelligence) i.e. AI’s ability to mimic humans and  cognitive skills, this will lead to an astronomical surge in demand for  more enhanced and upgraded versions of GPUs and chips and power.  Mr Huang had shared his views on AGI implying they this may become  a reality in a time frame of 5 years or more.  

It is believed if Nvidia sells a total of 3.5 million H100 GPUs by 2024  they will devour approx 13,000 GwH of electricity per year. This would  equate to the power consumption of countries such a Lithuania,  Georgia.  

Intertwining renewable energy into the power grid— decarbonisation initiatives. 

Global investments in the power gird has been static however huge  investments have been made in renewable energy and its capacity  expansion. Thus there is a huge queue of renewable projects waiting to  get connected to the gird. In addition the shortage of grid equipment  hampers the transition to clean energy. 

SO WHAT IS THE REASON FOR THIS? 

As mentioned above the power girds of the developed world are aging  and are in dire need for upgradation to work with the new evolving  sources of energy. Solar and wind farms are located in remote areas far  from the actual grid that makes it difficult to connect the two together.  There is a huge need for build up of transmission lines that can connect  the solar and wind farms to the grid. However this a very costly and  time consuming process and involves a plethora of regulatory related  and bureaucracy issues that hinders the timeline of projects.  

In order to accommodate the intermittency of the supply of solar and  wind power, grids have to become flexible to manoeuvre the supply and  demand and avoid power outages to reach to the end users at the right  place and right time. So one of the solution is storage of the energy  however there is more work and research to be done on this area. 

In addition the adoption of green hydrogen will face obstacles until renewable energy is able to find its way into the power grid to propel  the use case of green hydrogen.  

Electrification of vehicles and other transportation, homes, industries and more.  

According to an article by CNBC there is an urgency to ramp up the  power grid in order to support the surge in electric vehicles on the  streets in the coming years. There is an acute need for high voltage  transmission lines, transformers and distribution lines. Elon Musk has  warned about a possible shortage in transformers by 2025 due the berserk amplifying power of AI and constant innovations in it wanting  more energy and power. Since there is a scarcity of energy it will  become difficult to create charging stations and spots that could  support the upsurge in EVs.  

Rapid industrialisation in the United States and becoming energy self sufficient (both Europe and United States). 

Since the aftermath of the covid- 19 crisis, the Russia- Ukraine war and  unfavourable relations with China, the US has been favouring re-shoring  critical activities back to its home county to become self-sufficient and  self-reliant in the future. There has been a boom in the industrial  activities in US such as production of electrical equipments,  semiconductors, computer chips, EVs and EV batteries and much  more. According to data from Enerdata China consumes twice as much  energy to compared to the US and has the power grid capacity to do  so. Thus suggesting that bringing back and building widespread  manufacturing factories in the US will challenge an already collapsing  old power gird.  

Given the transformational changes occurring in the geopolitical  landscape the developed world wants to become energy independent by bolstering renewable energy projects. Consider the case of EU, to  achieve self-sufficiency at the power and energy front, the European  Union will have bear the cost of 2 trillion euros (mentioned in a study). 

To conclude the world is witnessing a reality check with regards to the  condition of their power grids. Whilst the world went gaga over the rapid advancements in AI and debate about its impact on businesses,  individuals and the world, people failed to foresee the urgency of  updating the power grids and expanding their capacity in order to  support the rapidly changing world. Without an updated power grid and  requisite infrastructure, clean energy transition will be delayed as  countries around the world pledge to decarbonise their economies.

(Disclaimer: The opinions expressed within this article are personal opinions of the author. The facts and opinions appearing in the article are views of the author in general and the author does not hold any legal responsibility or liability for the same.)