Enchanted Rock’s VP of Policy, Joel Yu, recently joined an expert panel on artificial intelligence (AI) and the energy transition at the Business Council for Sustainable Energy (BCSE)’s Annual Membership Meeting in Washington, DC. Among the many perspectives shared during the discussion, one thing was abundantly clear – the challenge calls for a paradigm shift: collaboration over competition.

Utilities, data center operators, and distributed energy resource (DER) providers have traditionally operated in well-defined siloes, but the pressing issues of gridlock and capacity shortages require all parties to work toward collaborative solutions. A collective approach will not only foster innovation but also align with the flexible strategies that are crucial for securing 24/7 power for data centers and many other power-intensive industries.

The AI-Energy Nexus

The rapid growth of AI and cloud computing has triggered a dramatic increase in the size and power demands of data centers, leading to substantial challenges in securing reliable electricity. On top of that, utilities expect power needs to double by 2028, with many areas projected to face shortages in generation, transmission, and distribution capacity. Commonly referred to as “power gridlock,” it poses a critical issue for all consumers of power – big and small. The dilemma has become a serious focal point for data centers, which are now being built on an unprecedented scale with power requirements reaching 10x what they were for a new data center just a few years ago.

Previously, efficiency gains from the transition to cloud environments masked the rising data center power demand and fostered the idea that minimal new investment in transmission and generation was needed. However, as AI accelerates along with the development of massive training models and intensive inferencing, the power requirements of data centers are skyrocketing. Additionally, the industry is shifting from designs focused on lower-density chips to multi-hundred-megawatt data centers that accommodate more powerful GPUs, significantly increasing power per square foot. Across the country, this drive toward rapid development of energy-intensive facilities is outpacing the infrastructure needed to support them. This transformation in the industry presents a critical opportunity for utilities, data centers, and DER providers to innovate to meet these escalating demands through scalable approaches.