Axios Generate

October 16, 2024
🗞️ Good morning! We've got a newsy 1,092 words, 4 minutes.
🚨 Situational awareness: DOE plans to loan Aspen Aerogels $671 million to build a Georgia plant for making components that thwart EV battery fires.
- Meanwhile, DOE announced a $861M loan guarantee for solar and storage projects in Puerto Rico.
🎶 This week in 1991, hip-hop innovators Digital Underground dropped the album "Sons of the P," which provides today's intro tune...
1 big thing: Amazon goes big on small reactors
☢️ Amazon is looking to next-generation nuclear plant designs to power its expanding portfolio of data centers, as AI helps to drive up energy demands.
Why it matters: The new commitments — along with other companies' recent announcements — show a surge of interest in small modular reactors to prevent burgeoning AI computing tasks from torpedoing climate goals.
Driving the news: Amazon announced today it signed an agreement with the regional utility Energy Northwest in Washington state to invest in developing four SMRs at its Columbia Generating Station in Richland, Wash.
- Energy Northwest would build, own and operate these reactors, which provide about 320 megawatts to start.
- The project would potentially increase to 12 reactors producing 960 megawatts. This would be enough electricity to power 770,000 homes, according to Amazon.
- The electricity provided to the grid would also help power Amazon's operations. Amazon Web Services is one of the top cloud computing services worldwide.
By the numbers: Via its Climate Pledge Fund, the company also announced today that it led a $500 million investment round in SMR reactor and fuel company X-energy, which would design and build the reactors used in the Energy Northwest project.
- The aim, Amazon said, is to help bring more than 5 gigawatts of new nuclear energy projects onto the grid during the next 15 years.
- The funding is part of a C-1 round in X-energy that includes other investors, including Ken Griffin, CEO of Citadel.
What they're saying: "I think what Amazon is doing is completely new and different and transformative to the sector," X-energy CEO Clay Sell told Axios.
- He said the investments will help accelerate SMR deployment in ways that power purchase agreements, which several tech companies have signed, won't do.
The intrigue: These agreements come in addition to a memorandum of understanding that Amazon has signed to explore an SMR project at Dominion Energy's North Anna station in Virginia that would supply at least 300 megawatts of power.
- Dominion and other utilities across the country are considering their options for how to get more electrons onto the grid quickly to keep up with rising energy demands from data centers, EVs, the electrification of homes and businesses and new manufacturing facilities.
Separately, Dominion laid out a new integrated resource plan yesterday that shows low-carbon sources, including nuclear, meeting about 80% of its new energy demand during the next 15 years, and new natural gas plants at 20%.
Zoom out: Amazon's announcements come during the same week that its cloud computing rival Google announced a more limited deal to purchase energy from SMRs that startup Kairos Power plans to start bringing online by 2030.
2. ⚡ Get ready for the "age of electricity"

The world is entering a new era increasingly dominated by electricity, the International Energy Agency said.
Why it matters: Electricity use has grown at twice the pace of overall energy demand over the last decade, with China leading the way, IEA's new "world energy outlook" finds.
- Faster growth looms as the world moves toward EVs, wider use of AC and other appliances, and electrification of commercial buildings and industries.
🧮 Stunning stat: The agency sees electricity demand rising six times faster than overall energy consumption between 2023 and 2035.
What they're saying: IEA boss Fatih Birol, in a statement, said the "Age of Coal" and "Age of Oil" have defined energy history.
- "[W]e're now moving at speed into the Age of Electricity, which will define the global energy system going forward and increasingly be based on clean sources of electricity."
Threat level: While renewables are surging, overall "clean" sources of power haven't kept pace with power demand growth.
- As a result, global CO2 emissions from electricity jumped 20% from 2010-2023.
🔭What's next: Under nations' current policies, IEA sees expansion of "clean" sources — including renewables and nuclear — outpacing power consumption increases by 20% by 2030.
- But much faster increases are needed for a climate-friendly, "net zero" pathway.
3. 🖼️ The big picture from the new energy outlook
These huge annual IEA outlooks are a choose-your-own-adventure, so here are a few other parts that initially caught my eye:
🌡️ Without stronger policies, IEA sees the world blowing past Paris Agreement goals, warming 2.4°C (4.32°F) above preindustrial levels by 2100.
🗳️ There's "more near-term uncertainty than usual" on policy, with countries representing half of global energy demand holding 2024 elections.
📊 Despite resilient demand and increasing use, IEA is sticking to its controversial projection that demand for coal, oil and gas will all peak by 2030.
📈 IEA sees global CO2 emissions finally peak in the "coming years," but current policies are too weak to begin a "meaningful decline."
🥴 IEA expects very meager growth in CO2 capture under today's policies, but it's much more meaningful if nations implement their existing climate pledges. Check out page 163 for details.
4. 🎉 Bonus: data center reality check


One more big thing from the IEA report: It's doing yeoman's work to put the data center boom in context.
Why it matters: The world's thousands of data centers can strain local power markets, especially because they're often bunched together.
- But looking globally, they're a "relatively small share of overall electricity demand growth to 2030" under today's policy and tech trends.
Yes, but: There's a considerable uncertainty band in both directions — after all we're talking about the future!
- Still, nothing in IEA's range of estimates changes the underlying conclusion that they're a small part of the demand growth pie.
The bottom line: AI is turbo-charging data center power needs, but keep the wider picture in mind.
5. 💬 Quote of the day: federal finance edition
"Our standards haven't changed. What has changed is the urgency from our applicants. It used to be that when we asked them questions, it took them a month to get back to us. Today, it takes 24 hours. When we get our answers faster, we can process deals faster."— Jigar Shah, head of the Energy Department's loan office, speaking to Axios Pro's Alan Neuhauser
Why it matters: The loan office is a pillar of federal "clean" project finance, but it could be pared back if Donald Trump wins the presidency.
Unlock the whole interview, and if you need smart, quick intel on climate tech deals for your job, get Axios Pro: Deals
6. 🧮 Number of the day: 8.9%
That's fully electric vehicles' record share of the U.S. auto market in Q3, per new Cox Automotive data that also shows record absolute volumes.
Why it matters: While growth has slowed, it remains significant — Q3 sales were up 11% over the same period in 2023.
- Incentives and discounts are playing a role, but more broadly, new models and improved charging infrastructure will keep pushing sales higher, the analysts said.
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🙏 Thanks to Chris Speckhard and Chuck McCutcheon for edits to today's edition, along with the brilliant Axios Visuals team.
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