Illustration: Natalie Peeples/Axios
The energy industry's policy wish list is piling up in the face of skyrocketing power demand from AI, electrification and chips manufacturing, Nick writes.
Why it matters: Energy companies are fretting a lot about demand right now.
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- They want a permitting overhaul that makes it easier to build transmission and policies to keep the lights on as the grid becomes more distributed.
Nick's been interviewing execs and listening to testimony central to this evolution. Here's what they say …
Ben Fowke, interim CEO of American Electric Power Co., thinks utilities will have to spend "hundreds of billions of dollars" to keep up with power demand driven by AI data centers.
- That means it's time for Congress "to think bigger and more comprehensively" about grid policy, he told Senate ENR on Tuesday.
- He also offered a pretty stark message to the GOP in an election year: "Repealing the Inflation Reduction Act would make it more costly to serve growing demand."
Jim Murphy, president of Invenergy, told Nick that AI and electrification are "really pushing the need for an all-of-the-above energy policy."
- "Transmission is the key to the puzzle," he said.
- He's skeptical that advanced nuclear reactors are the answer: "The length of time necessary to develop and construct nuclear is still many, many, many years."
Barry Powell, head of Siemens' North American electrical products business, told Nick that data center water use will "become another major political topic" in the next decade.
- That's because AI chips run hotter than those in conventional data centers.
- On the energy side, he said, "Over time, you're gonna see a lot more localized generation."
Scott Harden, CTO of Schneider Electric, is also betting on a more distributed future grid. But he sees policy challenges to deploying the AI-infused grid management tech that his company develops for utilities.
- The North American Electric Reliability Corp.'s infrastructure standards — the security guidepost for utilities — don't allow for those systems to be deployed virtually on the cloud.
- "That has to change, and I think it will."
- And Harden thinks utilities should be able to make customers pay for digital tools "in the same way that they would if they were going to invest in a peaker plant."
Scott Gatzemeier, a vice president at Micron, said his company chose central New York to develop an enormous chip factory for easy access to a nuclear power plant.
- Elsewhere, lagging transmission development could curb investment.
- "A federal permitting process that adds two decades to a much-needed transmission project and adds hundreds of millions of dollars to the cost is not a federal permitting process that is aligned with the U.S. government's goals," he told senators.
