Last week, we blogged about increasing tension between AI growth and the associated energy demands. Interestingly, others are beating that drum too. This week, thousands of people in the energy industry descend on Houston for the annual CERAWeek (one of the world’s largest energy conferences/events). Daniel Yergin, vice chairman of S&P Global and author of the Pulitzer Prize-winning book The Prize: The Epic Quest for Oil, Money & Power, gave Bloomberg a sneak peek at some of his planned comments/themes of the week. Here is one snippet:
What are you fundamentally concerned about in regards to electricity — that there won’t be enough?
The surge in electricity demand that’s coming with aspects of the energy transition, and not only the energy transition but data centers, AI. Is the capacity going to be there? That used to be a developing world question. Now it’s also a developed world question. It’s the capacity to move electricity from where it’s generated to where it’s needed, but also inflation and supply chain issues have affected some of the rollout of renewables even though the scale continues to grow. We saw last year coal consumption increased globally. A big question is the role of natural gas in terms of a complement to wind and solar. That’s going to be much discussed at the conference.
Clearly, the current trajectory of AI worries even those in the energy industry. The more companies rely on AI, the more doing so may conflict with corporate climate (and other ESG) goals and commitments. This isn’t an issue about offsetting emissions, it is about availability of electricity – renewable and otherwise – and how that impacts Scope 2 emissions for everyone. Every company planning on Scope 2 reductions over the next few years should keep a close eye on this.
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