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Data centers require electricity.
And as we have talked about before, total electricity consumption by US data centers is forecasted to reach somewhere between 6.7 - 12% of total consumption by 2028 (figure from the US Department of Energy). Last year, Goldman Sachs also estimated that data center power demand would grow 160% by 2030.
I kind of wonder if these numbers might be understated — given our current AI bubble — but whatever the case may be, we're going to need a lot more electricity going forward. There's no such thing as a wealthy, low-energy nation.
Given all of this, I'm struggling to understand why the US would move to cancel what would have been the largest solar project in North America. Esmeralda 7, which was to be located on 62,300 acres of federal land to the north-west of Las Vegas, was expected to be a 6.2 gigawatt project — enough to power nearly 2 million homes.
Instead, the Department of the Interior seems to be determined to accelerate fossil fuel projects, and help China maintain its clear dominance in renewables. I guess that makes sense in some world if you think renewal energy projects are a "scam."
Cover photo by American Public Power Association on Unsplash
I never used to listen to very many podcasts. But lately I've started doing it while heading to/from meetings, either in the car or on the train. This past week I listened to a Bankless podcast talking about crypto and AI, and one of the arguments that was made was that it's probably a safe bet to assume that we're going to need dramatically more compute and electricity in the future.
This seems obvious enough. If you recall, there's no such thing as a wealthy, low-energy nation. If you're a wealthy country, you consume a lot of energy. And that's why Build Canada recently argued that we need a kind of energy revolution. By 2050, it's likely Canada will have 2-3x the electricity demand that we have today. So today I thought I would share a few related charts.
Here's electricity production by source across the world. Coal dominates.
Solar energy's share of total US electricity generation was only about 3.9% as of 2023. So it's not powering all that much today. However, the cost of PV modules continue to come down and installed capacity is growing very quickly. Here's an excerpt from a recent post by Brian Potter about solar energy:
By some metrics, solar PV has been deployed faster than any other energy source in history, going from 100 terawatt-hours of generation to 1,000 terawatt-hours in just 8 years, compared to 12 years for wind and nuclear, 28 for natural gas, and 32 for coal. In the US, solar PV projects are by far the largest share of planned new electrical generation capacity.
And here's a chart:
Looking at renewables more closely, we again see that wind and solar are making a run for it. And if you consider that solar is one of the fastest growing energy sources, it's not inconceivable that it will start to become a more dominant source in the near term. In the US, solar PV projects make up the largest share of new planned generation capacity.
But the US is not winning this race today. Right now it's China. (Chart below sourced from here.) They have the largest cumulative solar capacity, followed by the EU, and then the US. That said, coal still forms a dominant part of China's energy mix, and the country continues to construct coal-fired power plants to meet its short-term energy needs.
It's unfortunate that Canada is not on this list. That needs to change.
Cover photo by Benjamin Jopen on Unsplash
It's also interesting to look at which US states have the highest "capacity factors." The average for the entire US is 23%, which means that, on average, solar panels produce 23% of what they would if the sun were shining 24 hours a day. You might also think that the "sunshine state" would be one of the highest. But in fact, the top states are Utah and Arizona:
I'm highly interested in solar and we want to deploy it as much as we can on our projects going forward. If you're also interested in solar and want to learn more, Brian's post is an excellent place to start.
Images: Construction Physics
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