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Data centers are driving the clean-energy conversation at CERAWeek

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Mar 20, 2024
A photo of the Agora section of the CERAweek conference in Houston, where attendees talk or listen to a nearby panel discussion beneath pink and purple lights.

The conference floor at CERAWeek in Houston. Photo: Alan Neuhauser/Axios

The need to supply power-hungry data centers with low-carbon energy colored virtually every climate-tech conversation during the first two days of the CERAWeek energy conference in Houston.

Why it matters: The U.S. has suddenly entered a new age of energy scarcity, where companies will have to fight for the electrons they'll need to power their businesses.

Flashback: Two years ago, CERAWeek occurred on the heels of Russia's invasion of Ukraine — prompting a sudden new focus on energy security.

  • Last year was marked by uncertainty: markets had dramatically cooled, and the Biden administration hadn't yet implemented main provisions of the Inflation Reduction Act.

The latest: The bulk of the IRA is in place, climate technologies have matured even from last year — and data centers have brought new urgency to the green-energy build-out.

  • Slow and steady growth in energy demand has been replaced by a sudden spike in consumption, further compounded by electric vehicles and the move to "electrify everything."

"Every investor is talking about data centers," Tim Heidel, CEO of power line startup Veir, tells Axios.

  • "The urgency of demand growth is going to drive a ton of investment."

Big picture: Now investors want to know about bottlenecks.

In conference hallways, panels, and cocktail receptions, investors and founders say they're watching for any signal that Congress may finally speed permitting for the pipelines, transmission and other projects that would supply such electricity.

Meanwhile, funders and founders are paying attention to financing for first-of-a-kind energy projects.

  • Convincing a lender to bankroll a new type of factory remains a challenge. But investors tell Axios they're seeing movement behind closed doors, albeit slowly, as banks and businesses have gotten more familiar with various types of green tech.

Lastly, investors are watching corporations and utilities: a purchase order from a risk-averse Fortune 500 can signal that a sector or startup has evolved from risky venture investment to a mature-ish company.

  • "You're going to start seeing the more thoughtful companies coming in earlier to be able to access the energy they need," Michael Kearney, general partner at Engine Ventures, tells Axios.
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