The world needs more power, and fast.
Fortunately, thousands of the most influential minds in power generation are gathering this week in Dallas, Texas to meet the moment. Power producers, utilities, EPCs, consultants, OEMs, and large-scale energy users are conglomerating at POWERGEN International, where the industry is meeting to figure out how to affordably support electric load growth while remaining mindful of decarbonization mandates.
AI: a problem and a solution
The proliferation of artificial intelligence (AI) is one of the chief drivers of load growth, necessitating the construction of power-sucking data centers in areas where the grid cannot necessarily support the addition of a huge load.
Marc Spieler is the senior managing director of global business development at NVIDIA, an accelerated computing platform company once best known for making chips for computer gaming. In his keynote address Tuesday morning, Spieler argued it’s next to impossible to accurately predict how much power we will need, even in the short term.
“We know it will continue to increase. How much? I think that’s still to be determined,” Spieler told the POWERGEN audience. “We basically know things are moving up and to the right.”
One thing is certain- companies like NVIDIA cannot succeed without the support of the power industry.
“We’re dependent on feedstock, and the feedstock for AI is data and electrons,” Spieler quipped. “And the power generation industry is critical to driving AI.”
Spieler believes AI solves more problems than it creates. As it becomes more economically viable on a cost-per-watt basis, he expects the technology to solve all sorts of issues plaguing his peers.
“There are more problems than people,” he noted, underscoring a need for virtual agents to augment the sector’s workforce. Spieler anticipates smart technology will eventually be embedded at the grid edge, via smart reclosers, turbines, transformers, and more.
“We’ve seen a 100,000x improvement in energy over the last 10 years,” NVIDIA’s director of global business development boasted. “Our Blackwell chip has superior performance to a $100 million supercomputer built a decade ago.”
While Spieler anticipates capital costs to increase over the next few years, he thinks AI can be leveraged to help keep electricity prices flat(ish) for ratepayers. AI can improve operational efficiency across sectors, increasing production, lowering costs, decreasing risk, expediting outcomes (making better decisions, faster), decreasing carbon footprint, and improving the customer and employee experience.
Spieler insisted to POWERGEN attendees that AI can change the way people work and interact with suppliers and customers, allowing them to access information much faster and actually work on solving problems rather than wasting time trying to understand them. He said energy companies are already “leveraging AI to augment today’s workforce” in myriad ways, including data science and predictive AI, computer vision, physics ML, generative AI, robotics, digital twins, OT security, and distributed edge AI.
“Accelerated computing is sustainable computing,” Spieler concluded. “And you need to embrace AI or risk falling behind.”
data center development at scale
Chris Crosby is tired of reading headlines about how data centers are inherently bad.
“They throw the baby out with the bath water,” the CEO of Compass Datacenters said on POWERGEN’s keynote stage.
Compass supplies some of the largest technology companies in the world, serving 30-40 megawatts (MW) of IT load at each of its sites around the world. “We make power outlets for a living, at scale,” Crosby joked. “Just big ones.”
Crosby believes data centers can be a grid resource rather than a liability to reliability. Compass builds redundant generation capacity at each of its data centers, using primarily HVO fuel (but looking to expand into natural gas). By working with regulators, Compass and similar companies can make data centers serve society as a grid resource by bringing transmission into needy communities and aiding local grids during moments of critical need.
“We believe all data centers of scale should be connected to the grid at the highest voltage possible,” Crosby argued. “We dont believe it’s right to sit behind it and then slam our load on the grid when we need it.”
“We think data centers can help transform the grid,” he added. We think we are the tip of the spear.”
Compass Datacenters’ CEO also believes construction at scale will be crucial to success. Compass focuses on designing its sites with the understanding that there might be some moving, changing, and swapping out of components as technology improves. Technology like AI, which Crosby sees as a useful tool.
“AI is awesome. The way it’s going to impact all of our lives is massive,” he told POWERGEN International.
The “winners,” as he calls them, will be companies that can leverage such tools while establishing key partnerships with utilities and equipment companies. Working with utilities can be particularly frustrating, as many aren’t overly familiar with the data center space.
“Utility companies have to stop with all the engineering preferences to make growth effective,” Crosby recommended. “At the end of the day, things really aren’t all that different.”
Time is of the essence, Crosby concluded, saying the nation-state race between the U.S. and China to develop AI singularity “is very real.”
“We can’t keep up with the demand. Nobody can,” he admitted. “It is a fascinating time.”
reliability in southeast texas
Entergy Texas serves about one million people in four Gulf states. Its service territory is the southeast chunk of Texas outside of ERCOT (they’re in MISO). Entergy is a vertically integrated utility, meaning it owns and operates generation, poles and wires, all the way down to the customer.
“That allows a look at the whole value chain,” argued Eli Viamontes, the CEO of Entergy Texas.
Entergy Texas has more than $2 billion in planned transmission investments on its plate, and the utility is seeking regulatory approval on about half a dozen other projects over the next six months.
“We are well on our way to double our load demand in a decade,” Viamontes predicted. Entergy is one of the fastest-growing utilities in the country, supporting a rapidly expanding industrial area that has grown by nearly 9% in just five years in addition to a fast-growing residential area.
“We need a 40% increase in generation capacity in five years,” he calculated. “We have an issue here.”
Growth projections are higher than they were even just last year, but it’s not all about building power generation for Entergy, Viamontes said at POWERGEN. As an electricity provider, Entergy must take many factors into account including safety, reliability, and sustainability. They came up with STEP Ahead (the Southeast Texas Energy Plan) to address growing demand by providing a diverse mix of generation sources to strengthen the grid while maintaining reliability and keeping costs down. Other goals include building sufficient 24/7 dispatchable power, ‘all-of-the-above’ generation, routing power to where it’s needed, and protecting the grid from extreme weather.
all of the above
Richard Voorberg, the North American president of Siemens Energy was the last speaker of Tuesday’s POWERGEN keynote. He began by addressing what he deemed the “800-pound gorilla in the room,” politics.
“Hopefully there’s no tomatoes out there,” he joked.
It’s no secret that policy changes at the state and federal level play a role in power generation. Look no further than gas turbines.
“Gas turbines were dead in 2022,” Voorberg told the audience, revealing the large gas turbine market in the U.S. was just one customer not too long ago. “We will never get a regulator to approve gas turbines ever again in our state,” he recalls a colleague saying.
And now?
“Frankly, we can’t make enough gas turbines to support this market. What a difference a few years make.”
Voorberg, like many of his peers, adheres to an “all-of-the-above” energy policy.
“We can’t just choose winners and losers in this market. We need all areas,” he implored. “And we can’t ramp up the grid fast enough, so we need technology to do the most with what we have.”
Whether we like it or not, oil and gas are necessary to support dispatchable power, he said, noting Siemens Energy is well positioned to take advantage of the Trump Administration’s recent lifting of the U.S. ban on LNG exports.
Siemens Energy isn’t giving up on sustainability and many of its renewable projects are mostly on track, despite Trump’s distaste for some forms of generation. “Nobody is stopping,” Voorberg noticed. “Everybody is maybe pausing a bit, in the wait-and-see mode on the wind side.”
Siemens Energy has a larger stake in offshore wind than any other company in the world. Voorberg expects new policy edicts to change some decisions his company makes, but not everything.
“Will we see new projects on the wind side (in the U.S.) in the near future? Probably not,” he admitted, allowing for the fact that some onshore projects will likely still be built.
We need the power, after all, no matter whose load growth projection you believe.
“Should we stop trying to look into the future? No, we have to continue to look at it, we just have to understand we’re not very good at it,” Voorberg joked. AI may help with that, but in the meantime, companies like Siemens Energy need to remain flexible.
Voorberg ended his keynote with a call to action, asking POWERGEN attendees to go out and “scream from the rooftops” for people to come to the table and work together.
“This isn’t a situation where our market is going great and it’s a time to step back and not invest,” he implored. “We need to make sure we’re supporting the industry and it goes forward in a proper manner. Together, that’s our responsibility.”
