Solar is growing faster than any electricity source as Big Tech seeks clean energy for data centers

Published

3 months ago

June 19, 2024

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Aerial view of the Oberon Solar O&M farm on March 24, 2024 in Ector County, Texas. In 2023, Texas led the nation in solar installations on its power grid, surpassing California for its second consecutive year.

Brandon Bell | Getty Images

Solar is booming in the United States as power demand surges, outpacing the growth of any other electricity source and disproving claims that the energy transition is a failure.

The energy transition from fossil fuels has faced substantial criticism from leaders in the oil and gas industry, who have argued that renewables still represent a fraction of power generation despite decades of investment. Renewables also face reliability problems, they say, when the sun is not shining or the wind not blowing.

To be sure, solar remains a small portion of total electricity generation in the U.S., standing at just 3.9% of the nation’s power mix in 2023 compared to the 43% share held by natural gas, according to the Energy Information Administration, the statistical unit within the Department of Energy.

And renewables face substantial logistical challenges in connecting to an aging power grid that is not prepared for the level of new demand the U.S. is facing after a long period of little growth.

But leaders in the clean energy industry argue that the sector is reaching a turning point, particularly as Big Tech firms such as Amazon and Microsoft seek clean energy to power data centers that are the backbone of the Internet and artificial intelligence applications. The economic argument for renewables has also strengthened, they say, as the price of solar modules and batteries has fallen.

“They are cheaper, they are clean and quite frankly easier to site, so the future is going to be renewable energy,” said Andrés Gluski, CEO of AES Corporation, a power company that has signed large power agreements with the likes of Alphabet’s Google unit and Amazon. AES operates both renewable and gas-powered plants.

Amazon, Microsoft, Meta Platforms and Google alone represented 40% of the demand for large, utility-scale solar projects in the U.S. over the past five years, according to a May research note from investment bank UBS. Renewable demand from these companies, which are all committed to 100% clean energy, is poised to climb — artificial intelligence requires 10 times more electricity than the typical Google search, according to UBS.

Solar is forecast to make up 58% of new electricity generation installed in the U.S. in 2024, according to an estimate from the Department of Energy. A record 36 gigawatts of solar is scheduled to be added to the grid this year, nearly double last year’s increase, while battery storage will more than double to 14.3 gigawatts.

Just 2.5 gigawatts of natural gas, by contrast, is expected to be installed in the U.S. in 2024, coming in at just 4% of the 62.8 gigawatts of total planned power additions and the lowest number in 25 years.

“We’re seeing this kind of surge in demand for clean power,” said Joseph Rand, energy policy researcher at Lawrence Berkeley National Laboratory. “We’ve seen the economics of wind and solar, for example, become very competitive and very attractive to the point where in many parts of the U.S., those are the cheapest forms that … can generate a unit of electricity.”

Historic power usage

The U.S. is facing a historic wave of electricity demand. As geopolitical tensions encourage protectionism, manufacturing is moving back to the U.S. with the support of the CHIPS and Science Act, which aims to increase domestic semiconductor production, the building block of the digital economy.

Though electric vehicle adoption slowed at the end of 2023, a record 1.2 million car buyers went electric last year, 7.6% of the U.S. vehicle market — up from 5.9% in 2022, according to Kelley Blue Book.

And Big Tech is building out energy intensive data centers to support the artificial intelligence revolution. In 2023, data centers representing three gigawatt hours of electricity were under construction in the top eight U.S. markets, a 46% increase over 2022, according to real estate services firm CBRE.

As these trends collide, electricity demand could surge 20% by 2030 after more than a decade of stagnation, according to an April analysis by Wells Fargo. Data centers are expected to make up 8% of U.S. electricity consumption by the end of the decade — more than double their current share, Goldman Sachs said in April.

Explosive power demand poses a challenge to the Biden administration’s goal of converting the U.S. power grid to 100% clean electricity by 2035.

“The demand growth and the electrification is all kind of a Catch 22 because the more demand you have, the harder it is to decarbonize,” said Ryan Sweezey, principal analyst for North America power and renewables at the energy consulting firm Wood Mackenzie.

Solar vs. natural gas

Natural gas producers are betting that they are better positioned than renewables to meet the demand, particularly from data centers. They argue that gas is cheap, abundant, quickly deployable and above all reliable. Though a fossil fuel, gas is also playing a role in the energy transition by displacing dirtier coal plants, according to the gas industry.

“The primary use of these data centers is big tech and I believe they’re beginning to recognize the role that natural gas and nuclear must play,” Richard Kinder, executive chairman of Kinder Morgan, one of the nation’s largest natural gas pipeline operators, told analysts on the company’s first quarter earnings call in April.

“They, like the rest of us, realize that the wind doesn’t blow all the time, the sun doesn’t shine all the time, that the use of batteries to overcome the shortfall is not practically or economically feasible,” Kinder said.

Saudi Aramco CEO Amin Nasser effectively declared the transition away from fossil fuels a failure during a March energy conference in Houston, saying wind and solar supply under 4% of the world’s energy. Two-thirds of emissions reductions in the U.S. were due to the transition to gas from coal, Nasser said.

Massive backlog

Dan Shugar, the CEO of Nextracker, pushed back against the argument that natural gas will be the biggest beneficiary of data center power demand. Nextracker is a leading U.S. solar firm, building systems that allow panels to track to the position of the sun, improving the efficiency of solar power plants.

Shugar pointed to the massive number of renewable projects in the U.S. seeking connection to the power grid. Nearly 2,500 gigawatts of solar, wind and battery projects were requesting connection in 2023, almost double the entire installed capacity of the current U.S. power plant fleet, according to an analysis by Lawrence Berkeley National Laboratory.

There were just over 1,000 gigawatts of solar power seeking grid connection last year, nearly 14 times more than the 79 gigawatts of natural gas that is in the power queue, according to Lawrence Berkeley.

Solar demand is rising as the power source has become cost competitive with natural gas in areas. Solar for large utility projects costs $29 to $92 per megawatt hour of electricity, while combined cycle gas plants cost between $45 to $108, according to a June analysis by financial advisory firm Lazard.

The costs rise for solar with battery storage, however, to between $60 to $210 per megawatt hour, though tax credits under the Inflation Reduction Act can push those prices down to $38 to $171, the Lazard analysis found.

“There’ll be some gas, but we believe based especially on the data published by the DOE, the predominant energy source for these data centers is going to be renewable energy,” Nextracker’s Shugar told CNBC in an interview. The tech companies developing data centers have “very serious sustainability goals and don’t want their power coming from fossil,” the CEO said.

“The short story is we see data centers becoming an increasingly significant demand driver for renewables both from [an] aggregate demand standpoint as well as an environmentally preferred source of energy,” Shugar said.

The grid isn’t ready

The U.S. could achieve 90% clean electricity by 2035 if about 1,400 gigawatts of wind and solar capacity are deployed, according to a series of reports published by the University of California Berkeley’s Goldman School of Public Policy and GridLab.

While the current backlog of renewables would surpass that threshold, getting those projects authorized for connection to the grid and building out the physical transmission lines pose substantial challenges. Only 20% of projects seeking connection to the grid between 2000 and 2018 were actually completed, according to Lawrence Berkeley.

The rate by which renewables are deployed would need to at least triple to achieve 90% clean electricity over the next decade, said Amol Phadke, senior scientist at the Goldman School and Lawrence Berkeley.

But it is taking longer to build power plants after their initial application. For plants that came online in 2023, it took about five years from the initial application for grid connection until construction was finished, said Rand, the Lawrence Berkeley analyst. In 2008, it took just two years, he said.

The bottleneck for projects applying to connect to the grid should ease later this decade, said Sweezey, the Wood Mackenzie analyst. Building out transmission, on the other hand, is more challenging because the infrastructure requires complex permitting across multiple state, local and federal agencies, he said.

“It’s kind of a maze, a labyrinth of a process,” Sweezey said. “We need to start proactively planning to deliver large scale transmission lines” to demand centers, he said. Historically, most utilities haven’t done this type of planning, focusing instead on near-term reliability issues, the analyst said.

Batteries are essential

The other challenge that renewables face is generating enough power to meet demand when sun and wind conditions are not at their peak. Batteries are key to solving this problem by collecting power during peak weather conditions and dispatching the energy later in the day when it is most needed.

Right now, most lithium ion batteries on the market typically store four hours of power though this varies depending on the project. This is not enough to provide reliable power for the entire day, analysts say. Batteries that can store eight hours or more of power are needed on a commercial scale, they say.

A fully renewable electric grid is not possible today because banks of longer duration batteries are not currently cost effective, said Reid Ramdathsingh, senior renewables and power analyst at the consulting firm Rystad Energy.

“You’re going to have so much downtime on the batteries that it’s a lot of wastage in terms of the cost,” Ramdathsingh said. “It all comes down to the actual pricing and getting that return on the investment.”

But executives at Fluence, one of the leading battery providers for utility-scale projects in the U.S., see the economics becoming more favorable as energy demand rises. Fluence was launched by AES Corporation and Siemens in 2018.

John Zahurancik, president of Fluence’s Americas region, said batteries are about 20 times cheaper than they were in the early 2000s. Batteries face a declining value curve in which each hour of storage is less valuable than the previous hour, Zahurancik said. But as energy demand increases, the value of each additional hour should rise, eventually making longer duration batteries more cost effective, he said.

“A lot of this is not so much a technology breakthrough needed, it’s been the economics of scale,” Zahuranick told CNBC. “We’ve been steadily driving costs out of systems that we’ve deployed.”

In California, for example, solar energy represented more than 50% of the state’s power supply from 7:45 a.m. until 5:25 p.m., peaking at about 18 gigawatts or 64% of supply around 1 p.m., according to Grid Status, which tracks major U.S. grids in real time. Batteries were a top three energy source from 7:25 p.m. until shortly before 9:20 p.m., peaking at about 6 gigawatts or 20% of supply at 8:25 p.m.

“You can do it 100% with renewables, you just need a whole lot more renewables,” AES CEO Gluski said of meeting power demand. “I do agree that we’re going to need natural gas to shore up … renewables until batteries become ubiquitous and cheap enough to make up for that,” he added.

AES has signed agreements to provide renewable power around the clock to some tech companies running data centers.

One example is an agreement AES signed with Google in 2021 to power its Virginia data center campus with 90% carbon-free energy on an hourly basis using wind, solar, hydro and battery storage resources.

While natural gas will act as a bridge fuel, the CEO said he’s not seeing tech companies, for example, asking for new fossil fuel plants to power data centers.

“All of them want to be part of an energy transition,” Gluski said. “I don’t see anybody saying build me gas and coal plants to power my data centers.”

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Bidirectional charging may be required on EVs soon due to new CA law

Published

5 hours ago

September 29, 2024

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Bidirectional charging may be required on EVs soon due to new CA law

Chevy 2024 Silverado EV lease — Photo: GM

It’s an exciting week for grid resiliency-lovers in California, as Governor Gavin Newsom followed up his earlier smart grid law and signed another law this week which may require bidirectional charging on EVs in the future – though the law has no hard timeline attached, so it may be a while before we see this happen.

Bidirectional charging refers to the capability of electric vehicles to not just take electricity from the grid to charge, but to output electricity in various forms, whether this be vehicle-to-load (plugging in devices, like the 1.8kW capability on the Kia Niro EV), vehicle-to-home (like Ford’s “Intelligent Backup Power” system), or vehicle-to-grid (like the Nissan Leaf is capable of).

While these applications may seem like a party trick, widespread use of bidirectional charging could lead to huge benefits for efficiency, grid resiliency, and enable much greater penetration of renewable electricity generation.

Most electric grids don’t really have trouble meeting the regular everyday needs of electricity consumers, it’s when big spikes happen that things get difficult. Either on a hot day when everyone is using air conditioning, or a day when electricity generation is curtailed for some reason or another, that’s when things get difficult.

And as climate change makes temperatures hotter, California’s grid is often overtaxed on the hottest summer days, which are becoming more numerous. Even worse, methane-burning fossil gas peaker plants are the highest-polluting form of electricity California consumes, and these are currently used at peak times in order to deal with high demand.

One solution to this problem is adding energy storage to the grid which can be dispatched when needed, and which can fill up when the grid is oversupplying electricity. This helps to balance out supply and demand of electricity and make everything a little more predictable.

This is why there has been a push for grid-based storage like Tesla megapacks, which represent a large source of rapidly-dispatchable energy storage.

But there’s another source of grid-connected batteries out there which was right under our nose the whole time: electric cars.

EVs, which are mostly connected to the internet anyway, could be used as a distributed energy storage device, and even called upon to help provide electricity when the grid needs it. We already see this happening with Virtual Power Plants based on stationary storage, but if cars had V2G, theoretically cars could contribute in a similar way – both saving the grid, and perhaps making their owners some money along the way via arbitrage (buying electricity when its cheap and selling it when its expensive).

The problem is, not many automakers have included V2G capabilities in their cars, and in the cars that do have it, not many manufacturers have made V2G-capable equipment, and the ones who have built it haven’t seen that many customers who are interested in spending the extra money to upgrade their electrical systems with V2G-capable equipment.

So there needs to be something to jumpstart all of that, and California thinks it might just have the thing.

New CA law might require bidirectional charging… eventually.

The idea started in 2023 when state Senator Nancy Skinner introduced a bill which would require EVs to have bidirectional charging by 2027.

As this bill made its way through the legislative process, it got watered down from that ambitious timeline. So the current form of the bill, which is now called SB 59, took away that timeline and instead gave the California Energy Commission (CEC) the go-ahead to issue a requirement whenever they see it fit.

The bill directs the CEC, the California Air Resources Board, and the California Public Utilities Commission to examine the use cases of bidirectional charging and give them the power to require specific weight classes of EVs to be bidirectional-capable if a compelling use case exists.

The state already estimates that integrating EVs into the grid could save $1 billion in costs annually, so there’s definitely a use case there, but the question is the cost and immediacy of building those vehicles into the grid.

The reason this can’t be done immediately is that cars take time to design, and while adding bidirectional charging to an EV isn’t the most difficult process, it also only really becomes useful with a whole ecosystem of services around the vehicle.

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A recent chat Electrek had with DCBEL, making bidirectional chargers simpler for consumers

Even Tesla, which for years has touted itself a tech/energy company and sold powerwalls, inverters, solar panels and so on, is still only gradually trickling its bidirectional Powershare feature out onto its vehicles.

And that ecosystem has been a bit of a hard sell so far. It’s all well and good to tell someone they can make $500/year by selling energy to the grid, but then you have to convince them to buy a more expensive charging unit and keep their car plugged in all the time, with someone else managing its energy storage. Some consumers might push back against that, so part of CEC’s job is to wait to pull the trigger until it becomes apparent that people are actually interested in the end-user use case for V2G – otherwise, no sense in requiring a feature that nobody is going to use.

Electrek’s Take

Given all of these influences, we wouldn’t expect CA to require bidirectional charging any time soon. But it still gives the state a powerful trigger to pull if other efforts, like the recently-signed smart grid law, turn out not to be enough as California works to, grow, clean up, and make its grid more affordable all at the same time.

But having the force of law behind it could turn V2G into less of a parlor trick and more into something that actually makes a difference the way us EV nerds have been dreaming of for decades now (true story: Electrek once turned down Margot Robbie for an interview and instead talked to some engineers about V2G for an hour).

So, telling manufacturers that California may start mandating bidirectional charging soon means that those manufacturers will perhaps start taking V2G more seriously, particularly given the size and influence of CA’s car market. Even if the CEC doesn’t make it a requirement, the threat of it eventually becoming one means that EV-makers will probably start getting ready for it regardless.

There’s no real point to a single person discharging their car into the grid, but when millions of cars are involved, you could work to flatten out the famous “duck curve,” which describes the imbalance between electricity supply and demand. We hear a lot about “intermittency” as the problem with wind and solar, and grid storage as the solution to that, so being able to immediately switch on gigawatt-hours worth of installed storage capacity would certainly help to solve that problem. And we hope this law helps us get just a little closer to that potential future.

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Industry first: Komatsu reveals power agnostic 320 ton haul truck

Published

10 hours ago

September 28, 2024

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Industry first: Komatsu reveals power agnostic 320 ton haul truck

Komatsu Reveals Power-Agnostic 930E Hauler – for Diesel, Electric, Hydrogen

Japanese equipment giant Komatsu dropped its new, 320-ton Power Agnostic 930E mining truck at MinsExpo trade show in Las Vegas, calling it a future-ready solution that can run on diesel, hydrogen, or pure electric power.

Komatsu continues to develop alternative engine technology with the release of its first commercial rigid-frame dump truck with a “power agnostic” platform for running on diesel, hydrogen, or even battery electric power.

That’s because the platform is designed around the concept of a modular powertrain. The design not only gives the Komatsu assembly line an easy way to build diesel, BEV, and hydrogen fuel cell rigid haulers on the same line, but also enables customers to upgrade from diesel to battery electric or hydrogen down the road, if and when whatever logistical obstacles that are preventing them from running an electric or hydrogen solution today are overcome.

“This platform enables mining companies to start with conventional diesel engines and gradually transition to cleaner energy sources as needed, including utilization of trolley assist for diesel or as one of the future dynamic charging solutions for battery trucks to reduce fuel consumption and emissions,” reads Komatsu’s press material. “Whether adopting battery technology, hydrogen fuel cell technology or a combination of energy systems, the Power Agnostic 930E provides the infrastructure and adaptability necessary to meet evolving sustainability goals.”

Potential customers got a sneak peek at the concept truck, which they were apparently allowed to test at Komatsu’s Arizona proving grounds ahead of MineExpo (I wasn’t invited). The first pre-production Power Agnostic 930E prototype will make its way to Sweden in the coming months, where it will be put to work alongside other electric Komatsu machines in Boliden’s Aitik copper mine, one of the largest such operations on the European continent.

Electrek’s Take

Komatsu Power Agnostic 930E; via Komatsu.

Converting gas and diesel-fueled cars to electric at scale is a concept that’s fraught with problems. Far too many to list here, in fact. But heavy equipment?

Everything from excavators to loaders to heavy trucks are already built to be powertrain agnostic, and manufacturers will often offer the same basic vehicle with Cummins, Detroit Diesel, or Volvo Pentapower, so there’s a degree of openness baked into those systems already. Komatsu is just taking that to the next level by adding a modularity of energy storage (fuel tanks, hydrogen cells, or battery packs) to the mix. And, if the project is successful, it could be the first of many.

SOURCE | IMAGES: Komatsu; Equipment World.

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isinwheel has an electric ride for everyone – check out these 6 standouts

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15 hours ago

September 28, 2024

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isinwheel has an electric ride for everyone – check out these 6 standouts

isinwheel’s terrific personal EVs “bring all the things you want closer to you.” Whether it’s an electric scooter, an e-bike, or an e-skateboard, the three things you’re guaranteed to get no matter which you choose are fun, safety, and affordability.

We’re taking a closer look below at six of isinwheel’s personal EVs – could one of these be your next electric ride?

isinwheel S9Pro commuting electric scooter

Meet the isinwheel S9Pro, the best value-for-money electric scooter that zips you through your day at speeds up to 19 mph with a range of 19 miles – perfect for your daily commute.

The S9Pro‘s powerful 350W motor delivers a smooth, efficient ride without breaking the bank. With a lightweight, foldable aluminum frame, it’s easy to carry, store, and even pop into your car trunk or onto public transport. Plus, the quick one-step folding mechanism makes it the ultimate on-the-go companion.

You can find the S9Pro on Amazon here.

isinwheel S10Max long-range electric scooter

The isinwheel S10Max is your ultimate high-performance ride, powered by a beastly 1000W motor that conquers any terrain with ease. With an impressive range of up to 37 miles, you can enjoy long-distance adventures without worrying about recharging.

The S10Max‘s all-terrain 10-inch off-road tires, paired with dual shock absorption, provide unbeatable grip and stability whether you’re cruising through city streets, on country paths, or on muddy trails.

You can find the S10Max on Amazon here.

isinwheel GT2 off-road electric scooter

Unleash your adventurous side with the isinwheel GT2. With a powerful 1000W motor, it rockets up to 28 mph, effortlessly conquering steep hills and challenging landscapes for a thrilling ride every time.

Its 11-inch off-road tires are built for all terrains, whether you’re cruising through the city or tackling rugged countryside paths. Plus, with four advanced shock absorbers, every ride is smooth and stable, no matter where your journey takes you. Get ready to ride the GT2 and experience performance like never before!

You can find the GT2 on Amazon here.

isinwheel M10 electric commuter bike

The isinwheel M10 electric commuter bike blends style with power. Crafted from lightweight, rust-resistant aluminum alloy, this sleek ride weighs just 47 pounds, making it easy to carry and tough enough to last.

With a professional 35-speed transmission, the M10 adapts to your every need, whether you’re accelerating, cruising downhill, or conquering steep inclines. With a 500W motor capacity, a top speed of 20 mph, 374 Wh battery capacity, and four hours of charging time, it’s the perfect blend of performance and convenience for your daily commute!

You can find the M10 on Amazon here.

isinwheel U1 folding electric bike

Say hello to the versatile isinwheel U1! With folding handlebars, pedals, and a height-adjustable seat, it’s perfect for easy storage and transport. The U1’s 500W motor comes with a smart chip that instantly adapts to give you that extra boost when you hit an incline, face a headwind, or carry more weight.

The U1 has a top speed of 18 mph, 280 Wh of battery capacity, and three hours of charging time. Whether you’re zipping through city streets or tackling hills, the U1 has you covered with power and portability.

You can find the U1 on Amazon here.

Check out isinwheel’s V8, V6 and V10 electric skateboards

The isinwheel V8 electric skateboard is your ticket to thrilling rides, featuring a top speed of 28 mph and a range of up to 12 miles. Its removable, detachable batteries allow for quick swaps, so you can extend your adventure with ease. Choose from four riding modes and let the gorgeous ambient lights make you stand out, whether you’re cruising in daylight or lighting up the night. With its powerful dual 540W motors and regenerative braking system, the V8 delivers a ride that’s as exhilarating as it is stylish.

The V8 is isinwheel’s first-gen electric skateboard, and we’ve also taken it to the next level. The V6 is perfect for teens and beginners, and the high-performance V10 is for those who crave more power. But we’re not stopping there – this September, we’re launching the V6 PRO, the ultimate cool ride for young skaters and newbies. Stay tuned; it’s going to be epic!