AI and EVs Are Forcing the US Update Its Power Grid

By: Anneken Tappe · June 07, 2024 · Reading Time: 3 minutes

New technologies like artificial intelligence and electric vehicles are already leading to higher demand for electricity, weighing on America’s stretched power grid. Now the White House is taking steps to increase power line capacity and bring the grid into the 21st century.

Energy Overhaul

In October, the U.S. Department of Energy launched a near $3.5 billion program to boost America’s grid. Companies like Algonquin Power (AQN) and Dominion Energy (D) have already received grants to enhance power distribution.

This is key, because while electricity is needed for all the modern luxuries of charging technology and EVs, as well as for powering the data centers allowing advances like AI, we also still need electricity to turn on the lights and run our air conditioning in the hot summer months. An overstretched grid is more likely to have outages that hamper all of those things.

Some companies are installing dynamic line rating sensors, which optimize the distribution of electricity to increase overall capacity. Others are exploring replacing existing power lines with high-performance wires. Wide adoption of these wires could nearly quadruple transmission capacity by 2035, according to a report by UC Berkeley and grid transformation nonprofit GridLab.

The White House is also working to limit regulatory hurdles for new transmission lines in an attempt to enhance the grid’s efficiency without committing to longer and pricier large-scale transmission projects.

Power Surge

Energy consumption remained relatively stagnant over the past two decades, but that is changing quickly. In 2022, data centers accounted for as little as 1% of global energy demand. But the recent AI-fueled boom is expected to push that to as much as 20% by 2030.

But electrification is putting U.S. infrastructure through the ringer. In the past decade, the U.S. has generated a little more than 4 trillion kilowatt-hours (kWh) of electricity per year, according to the Energy Information Administration , while data nonprofit USAFacts calculates that widespread EV adoption could require nearly 2 trillion kWh in additional power — 50% more than current production.

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