What happens when electricity, not GPUs, becomes the scarcest AI input?

The rapid expansion of artificial intelligence is driving a significant surge in energy consumption and reshaping the technology landscape. A primary concern highlighted across multiple sources is the escalating demand for power required to fuel AI development. xAI's decision to purchase and relocate an overseas power plant to the United States to support its vast GPU infrastructure exemplifies this intense power need. Pennsylvania's Governor has reportedly expressed worries about the state’s electrical grid’s capacity to handle the escalating demands of AI infrastructure, prompting discussions of potential grid strain and even possible exits. This rapid growth is exposing a critical imbalance: power generation isn't keeping pace with the burgeoning needs of the AI sector. Nvidia remains the dominant force in AI hardware, deploying its most advanced chips, including the Grace Blackwell Ultra, to power significant AI infrastructure. While Nvidia leads, AMD and Intel are actively developing next-generation CPUs, with AIDA64 preparing support for AMD’s Zen 6 and Intel’s Wildcat Lake. Intel is currently facing challenges, including layoffs and potential closure of its Fab 28 facility in Israel, signaling a period of restructuring within the company. Asus is celebrating 30 years in the graphics card business, marking a significant milestone in the industry’s evolution. Beyond CPUs and GPUs, innovation continues across the chip development sphere. IBM is focusing its new Power11 chips on AI and ransomware defense. GlobalFoundries has acquired MIPS, a move likely geared towards incorporating RISC-V and AI intellectual property into its offerings. The emergence of tools like the Snapmaker U1’s four-color tool changer demonstrates advancements in 3D printing technology. The overall situation reveals a complex interplay of factors. The relentless pursuit of AI innovation is pushing the limits of existing infrastructure, particularly in power generation and grid capacity. This is impacting major players, leading to strategic shifts like acquisitions and layoffs, while simultaneously accelerating the development of new hardware and software solutions. Resolving the power supply bottleneck will be crucial to sustaining the continued advancement of artificial intelligence.

The Bernalillo County Board of Commissioners voted 5-0 to approve Administrative Resolution AR 2025-98, adding a proposed 345 kilovolt transmission line on the county's west side and upgrading an existing 115 kV line to 345 kV in the county electric facility plan.

Alberta’s Bold AI Strategy Faces Grid Capacity Hurdles Alberta is aggressively pursuing a strategy to establish itself as a leading hub for artificial intelligence (AI) data centers, capitalizing on its abundant natural gas resources. However, the province’s ambitions are clashing with a significant challenge: the current electrical grid struggles to accommodate the surging demand for power. The situation has sparked debate about Alberta’s approach to attracting major tech investment. The sheer scale of the projected demand is staggering. Twenty-nine data center projects are currently requesting access to over 16,000 megawatts of power, dwarfing Alberta’s typical peak consumption. To manage this influx, the Alberta Electric System Operator (AESO) has initially allocated 1,200 megawatts through 2028, prioritizing projects demonstrating financial stability and community support. This initial allocation is drawing criticism. Many believe that 1,200 megawatts is insufficient to lure the large, transformative tech companies like Microsoft, Amazon, and Meta that are essential to Alberta's broader AI ambitions. Voices from various stakeholders are questioning the AESO’s approach, expressing concerns about Alberta's ability to compete globally. The Alberta government supports the AESO’s current strategy, framing the 1,200-megawatt distribution not as a hard cap, but as a starting point. AESO CEO Aaron Engen defends the staged approach, emphasizing the importance of maintaining grid reliability and avoiding the perception of “picking winners and losers.” However, First Nations leaders, including Chief Tony Alexis of the Alexis Nakota Sioux Nation, contend that the limited allocation will deter significant investment. Paul Poscente, an investment advisor to the Alexis Nakota Sioux Nation, urges AESO to reconsider its distribution model to accommodate larger “anchor” projects. Capital Power LP (CPX-T) shares this perspective, believing the allocation hampers Alberta’s competitiveness. A key tension lies in balancing immediate needs with long-term scalability. While AESO prioritizes a phased approach, critics argue that Alberta requires “anchor tenants” to drive the AI industry forward. The province’s preference for data centers to self-generate power further complicates matters, as this process is time-consuming and potentially puts Alberta at a disadvantage in the global race. The central question becomes: how can Alberta balance the desire for responsible grid management with the urgency to attract substantial foreign investment? The potential economic consequences of slowing down AI infrastructure development remain a significant concern.

ERCOT Grid Faces Growing Supply-Demand Gap: Ascend Analytics Warns of Volatility A new analysis from Ascend Analytics highlights a widening disparity between electricity demand and supply within the Texas power grid (ERCOT), potentially leading to increased market volatility and periods of scarcity. The findings, released May 28, 2025, suggest a significant divergence in forecasts for peak electricity demand. Ascend anticipates a peak load of 119 GW by 2030, a considerably lower projection compared to ERCOT’s current forecast of 208 GW and a revised estimate of 138 GW. Initial relief from rising solar and energy storage capacity is expected in 2025-2026, temporarily mitigating the risk of power shortages. However, Ascend predicts a substantial decrease in reserve margins starting in 2027, signaling the onset of potential scarcity conditions. The ERCOT market is likely to experience cyclical patterns, fluctuating between years of high demand and years of lower demand, influenced by unpredictable weather patterns and uncertainty surrounding new power generation installations. A key factor impacting long-term energy development is the anticipated phaseout of Inflation Reduction Act (IRA) clean energy tax credits in the 2030s. This phaseout is expected to raise the effective cost of renewable energy projects and consequently slow their deployment. Furthermore, Ascend’s analysis suggests a shift in battery technology, with 4-hour duration batteries becoming increasingly economically favorable over 2-hour batteries within the next 1-2 years, driven by the rising value of longer-duration energy storage solutions during periods of scarcity. "ERCOT continues to undergo rapid change, and supply additions will have a difficult time keeping up with demand growth...expect a volatile market with boom years and bust years, and forward markets that reflect this asymmetric price risk," stated Brent Nelson, Managing Director of Markets and Strategy at Ascend Analytics. Ascend Analytics is a leading provider of market intelligence for the energy sector, with their insights utilized in over $50 billion in project financing assessments. They assist energy stakeholders in strategic planning, risk management, and adaptation to the evolving energy landscape. To delve deeper into these findings, Ascend Analytics is hosting a webinar on Thursday, May 29, 2025, at 11:00 AM MT. Details and registration can be found at https://www.ascendanalytics.com/blog/ercot-market-outlook-power-generation-resources-assemble/?utm_medium=email&utm_source=mailchimp&utm_campaign=ercot%20webinar%202025&utm_content=ercot%202025%20webinar%20mailchimp

A proposed data center in Delaware City, Delaware, has sparked controversy among residents and officials, raising concerns about the strain it could put on the local power grid and electricity rates for residential and commercial customers. With an estimated 1.2 gigawatt-hours of energy demand per hour, the facility would require significant upgrades to existing infrastructure, potentially leading to increased costs for consumers. The project has raised questions about how to address these concerns, including exploring alternative solutions such as a separate electricity rate class or on-site power generation, and the key players are now weighing in with their perspectives on the matter.

New Jersey faces escalating energy costs, a situation largely attributed to the practices of PJM Interconnection, the regional grid operator responsible for delivering electricity to multiple states. A coalition of organizations is calling on Governor Murphy to advocate for significant reforms within PJM to alleviate the financial burden on residents and businesses, potentially saving consumers over $400 annually. Current projections indicate energy bills could surpass $2,000 per year if present procedures remain unchanged. Critics point to several issues within PJM’s operations. A significant backlog exists in the interconnection queue, delaying the integration of renewable energy projects like solar, wind, and battery storage. This delays cost reductions and the transition to cleaner energy sources. The "Reliability Resource Initiative" is viewed as favoring natural gas and coal facilities, effectively prioritizing fossil fuel projects over renewable alternatives. Concerns regarding transparency are also prevalent, with PJM’s governance structure lacking adequate representation from state and community stakeholders, and voting processes not being publicly accessible. Allegations of market manipulations further complicate the situation, suggesting unfair advantages for certain energy providers. To address these concerns, the coalition is requesting Governor Murphy’s intervention to prompt specific changes at PJM. These demands include modernizing governance through increased state and community representation and public voting processes, accelerating renewable energy interconnection studies with a mandatory 150-day timeline, ensuring equitable evaluation of all energy technologies, and planning for future grid capacity needs, particularly driven by increased demand from industries like AI data centers. Improved interregional transmission planning is also a key priority. The broader implications extend beyond finances. Rising energy costs disproportionately impact vulnerable communities already experiencing the effects of climate change. Furthermore, high energy expenses are seen as a deterrent to business growth and retention within New Jersey. A modernized and resilient grid is also essential for ensuring reliability in the face of extreme weather and the ongoing challenges of climate change. The call for reform is supported by 17 organizations representing diverse interests across New Jersey.

Pennsylvania state Representative Rob Matzie is raising concerns about the rapid expansion of data centers in Northern Virginia and its potential impact on Pennsylvania's energy resources. The sheer scale of data center construction just across the Maryland border is unprecedented, driven by the region’s attractiveness for tech companies and a growing demand for cloud services. Matzie highlights that this explosive growth places increasing strain on the PJM Interconnection, the regional grid that serves both Virginia and Pennsylvania. He worries that Virginia’s push for renewable energy sources, while laudable, might exacerbate the situation if not carefully managed and coordinated. The increased electricity demand from these massive data centers, coupled with a transition to green energy, could lead to reliability issues and potentially higher energy costs for Pennsylvania residents. Matzie urges a collaborative approach between Pennsylvania and Virginia to assess the grid's capacity and ensure a stable energy supply for both states, emphasizing the need for proactive planning and investment in infrastructure to meet the evolving energy landscape. He specifically calls for a thorough examination of the grid's limitations and the potential for increased reliance on fossil fuels to compensate for the intermittent nature of renewable sources.

The rapid expansion of data centers across the 13-state region served by PJM, the grid operator, is prompting grid operators to explore strategies to manage escalating power demands, with potential rate volatility concerns for consumers. In an effort to address the situation, PJM is considering options such as allowing large consumers to develop their own power generation capabilities or temporarily suspending electricity consumption during peak demand periods, but critics argue that these proposals may not be enough and advocate for stricter measures, including segregating large consumers from the standard capacity market and incentivizing renewable energy adoption.

Texas is experiencing a rapid growth in massive data centers, driven by the increasing demand for cloud storage and streaming services, with Digital Realty's campus near Dallas being a significant example. Behind the scenes, these facilities operate 24/7, housing servers that power essential online services, including email and artificial intelligence, while maintaining strict security protocols to safeguard sensitive information. The centers are highly energy-intensive, consuming up to 100 megawatts of power equivalent to supplying electricity to around 10,000 homes, raising concerns about the grid's capacity to meet projected demand by 2030, with data centers potentially accounting for a significant portion of the state's growing energy needs.

New Jersey homeowners are experiencing a noticeable rise in their monthly electricity bills, a trend largely attributed to the burgeoning demand from data centers. A recent report by the New Jersey Policy Perspective, authored by Alex Ambrose, sheds light on the underlying causes and the strain on the state's electrical infrastructure. The situation is complicated by the role of PJM, the regional transmission organization responsible for managing electricity distribution across New Jersey and several neighboring states. The core issue stems from a widening gap between electricity supply and demand. Data centers, with their massive energy requirements, are rapidly expanding in New Jersey, placing significant pressure on the power grid. Simultaneously, older power plants are being phased out, diminishing the available electricity supply. This imbalance, coupled with challenges within the regional transmission organization, is driving up costs for consumers. The current structure struggles to effectively accommodate the increased load. A critical factor exacerbating the problem is a concerning number of delayed generation projects. Currently, a staggering 85 generation projects are experiencing setbacks, further hindering efforts to bolster the electricity supply and meet the escalating demand. These postponements compound the existing supply shortage and contribute to the upward pressure on electricity prices for New Jersey residents. Addressing these delays is crucial to stabilizing the situation. The report highlights the need for greater scrutiny of PJM's operational procedures.

Maryland, along with neighboring states Delaware and Illinois, is facing growing pressure to balance the economic benefits of attracting new data centers with the financial burden they impose on electricity consumers. As cloud computing and digital services surge, the proliferation of data centers is straining the region's power grid, driving up costs for ratepayers, and prompting lawmakers to push for reforms targeting PJM Interconnection, the regional grid operator. The coalition argues that PJM's practices unfairly shift costs onto consumers and favor data center developers, who are increasingly requesting "bring your own generation" agreements that could further complicate grid operations and require infrastructure adjustments.

As the 2026 midterm elections approach, New Jersey's electricity crisis is emerging as a pivotal issue in the governor's race, with both candidates vying to address rising prices that have jumped by nearly 22% over the past year. The causes of this surge are complex, including increased demand from new data centers and grid capacity shortages, but experts point to a combination of factors, including lengthy approval processes, inadequate supply, and PJM's control over energy additions. With differing proposals for reducing costs and increasing renewable energy, candidates Jack Ciattarelli and Mikie Sherrill are poised to make the affordability crisis a central campaign issue in the state's gubernatorial election.

South Africa is not short on ambition or potential when it comes to energy reform. The country’s renewable energy market is maturing. Investment appetite is increasing and policy shifts, like the recent Electricity Regulation Act, indicate focused commitment to achieving a more competitive, sustainable and competitive energy market. However, one obstacle remains a hindrance to this momentum - transmission.

California possesses a significant opportunity to substantially expand its electricity generation capabilities by optimizing the use of existing transmission infrastructure, according to a recent report from UC Berkeley. The concept, termed “surplus interconnection,” focuses on harnessing the unused capacity within current transmission lines to connect new power generation projects. This strategy avoids the substantial costs, lengthy timelines, and complex permitting processes associated with building entirely new transmission lines. The UC Berkeley report highlights that California’s interconnection capacity has been significantly underutilized. By connecting new generation sources, likely renewable energy projects like solar and wind farms, and potentially energy storage facilities, to the grid at locations with available capacity, the state could potentially unlock an additional 52 gigawatts of generation capacity. This figure represents nearly double the state's present generation capacity. The regulatory framework supporting this approach is informed by FERC Order 2222, which permits interconnection even for projects that are not the highest priority, provided there's unused capacity on existing lines. While the potential benefits are substantial, successful implementation hinges on several key factors. The California Independent System Operator (CAISO) will need to effectively manage the increased electricity flow, and careful grid stability assessments and potential upgrades might be required. Furthermore, CAISO's prioritization process for interconnection requests must be transparent and equitable to ensure fair access for all developers. While CAISO recognizes the promise of this approach, they stress the need for thorough planning and evaluation. Some industry observers remain cautious, citing ongoing grid limitations and operational complexities. This innovative approach to electricity generation offers a pathway to accelerate California's progress toward its ambitious renewable energy targets, reduce grid congestion, and achieve significant cost savings by sidestepping the expense and delays of new transmission line construction.

The explosive growth of artificial intelligence is creating an unprecedented surge in electricity demand, posing a significant challenge to existing power infrastructure. Training complex AI models and operating the massive data centers that support them require vast amounts of energy, potentially rivaling the output of major hydroelectric facilities for a single data center. This escalating demand is placing considerable strain on power grids nationwide, highlighting the urgent need for increased energy generation capacity. Among the potential solutions, nuclear power is emerging as a particularly attractive option. Its ability to generate power consistently, 24 hours a day, 7 days a week, aligns perfectly with the continuous operational requirements of AI-powered data centers. However, the development of new nuclear facilities is currently hampered by lengthy and expensive permitting processes. The administration is actively working to streamline these regulations through executive actions aimed at accelerating project approvals. The concentration of data centers in specific regions, like Northern Virginia, further exacerbates the problem, leading to localized grid congestion and delays. While nuclear power offers a promising path forward, experts agree that a diverse energy mix – incorporating renewable sources like solar alongside nuclear – is crucial for ensuring a resilient and sustainable power supply. Rising electricity prices for consumers (as detailed elsewhere) underscore the broader implications of this growing demand. Further information on nuclear power initiatives and general energy sector news can be found through Fox Business.

Ontario's electricity grid faced significant pressure this summer as a heat wave drove demand to its second-highest peak since 2013, reaching nearly 25,000 megawatts on Monday, according to the Independent Electricity System Operator (IESO). As temperatures soared, residents and businesses relied on cooling systems, exacerbating the surge in demand. The IESO is actively working to manage peak demands and ensure a reliable power supply as Ontario's electricity demand is expected to increase dramatically by 75% by 2050, driven by the increasing electrification of devices and systems.

By Peter Asmus Today, there are more than 8,000 data centers worldwide that consume roughly 1 to 2% of the global energy use. Over half of all data centers in the world have been deployed in the Unite...

Alberta faces a challenge in its pursuit of becoming a major data center hub. The provincial government aims to attract $100 billion in data center investment over the next five years, a move intended to spur job creation and economic growth. However, the Alberta Electric System Operator (AESO) has implemented a temporary power limit of 1,200 megawatts (MW) for data center projects, raising concerns among potential investors, including major tech companies like Meta and Amazon, and four First Nations. This limit arises from an unprecedented surge in demand, with 29 proposed projects totaling over 16 gigawatts (GW) seeking grid connections. AESO justifies the restriction as necessary to safeguard the reliability and affordability of electricity for all Albertans, First Nations, and existing industries, prioritizing power allocation to the most advanced projects. The government maintains that the 1,200 MW limit is not a permanent cap and emphasizes that data center development should not compromise Alberta's established energy needs, while simultaneously working to develop a long-term capacity framework. Four First Nations, led by Chief Tony Alexis of Alexis Nakota Sioux, are actively seeking involvement as investors within Alberta's burgeoning data center industry. They envision Alberta as a potential global data center hub and believe the power limit is a significant deterrent for investors, risking missed opportunities. These First Nations see the data center sector as a pathway to valuable training programs and lasting prosperity for their communities. Strategic advisor Paul Poscente highlights the necessity for Alberta to be able to accommodate "hyper-scalers" and establish a framework that actively draws them in. The situation involves multiple stakeholders with distinct positions. The Alberta government seeks data center investment while ensuring a stable and affordable energy supply, currently developing a long-term framework. AESO manages the electricity grid and imposed the short-term limit to maintain stability and prioritize advanced projects. The First Nations desire investment opportunities, expressing concern that the power limits discourage investment. Potential investors, like Meta and Amazon, are considering Alberta but are hesitant due to the imposed power restrictions. At its core, the conflict revolves around Alberta's ambition to become a data center leader and the current constraints of the electricity grid. The 1,200 MW power limit is a visible manifestation of this conflict. Resolution necessitates a balance between economic expansion and ensuring grid stability and affordability.

GridCARE launches with $13.5M to solve AI data center power access delays, unlocking hidden grid capacity to speed deployment and cut energy costs.

The PJM Interconnection, a critical hub for power distribution across 13 states and Washington, D.C., is facing significant strain due to growing demand from rapidly expanding data centers and a slow process for connecting new renewable energy projects. To address this challenge, researchers are exploring the potential of "Surplus Interconnection Service" (SIS), which involves repurposing existing unused transmission capacity to facilitate faster integration of new solar, wind, and energy storage projects into the grid, with estimates suggesting SIS could support up to 153 gigawatts of new renewable energy development in the PJM region.

Texas anticipates a record-breaking period of electricity demand this summer, influenced by intense heat and the expanding need for power from data centers and air conditioning. ERCOT, the organization responsible for managing the state's power grid, forecasts a peak demand reaching 87,500 megawatts. This figure would eclipse the previous high of 85,464 megawatts set in August 2023 and is considerably higher than the 74,650 megawatts recorded in 2021. A significant factor driving this increase is the growing presence of data centers supporting artificial intelligence and cloud storage solutions. Projections indicate these facilities will require over 22,000 megawatts by 2030, a substantial rise from the anticipated 2,400 megawatts next year. Cryptocurrency operations are also contributing to the heightened electricity needs, although their contribution is expected to be less significant in the coming years. Despite the escalating demands, ERCOT believes the grid will be capable of meeting the required energy needs, thanks to expansions in solar power generation and battery storage technology. However, the highest risk for potential grid stress is anticipated in August, particularly after 9 p.m. when solar energy production decreases. ERCOT forecasts suggest Texas summers will continue to be exceptionally hot, with six of the ten hottest summers occurring within the last decade. The organization anticipates sustained growth in energy consumption as the state's population increases and summers become more intense, necessitating continuous adaptation of the power grid.