CIO OPINION
Utility-scale batteries are emerging as a viable short-term energy storage medium to level grid load , especially in periods of high demand , like for air conditioning during heat waves . However , batteries are expensive , and while large scale installations can provide hyperscale levels of power , they can only do it for short periods of time .
The reality is that in the short term , increased data centre use will lead to increased CO 2 emissions to generate the needed power .
Source : Power Shortages Will Restrict Generative AI Growth and Implementation by Gartner a type of generation over a period of time , like a year , and dividing it by the maximum rated power a given installation can produce . Wind and solar have relatively low CUFs – around 25 % for solar and 35 – 40 % for wind .
This means that while renewables are an essential contributor of power to a wide ranging grid where power peaks during the day , they cannot be depended on to provide the type of power needed for data centre operation . This is also one of the primary reasons some data centres are instilling dedicated microgrids or hybrid solutions to allow for on-site generation during periods when renewable power is not available .
This , in turn , will make it more difficult for data centre operators and their customers to meet aggressive sustainability goals relating to CO 2 emissions . Longer term , new technologies for improved battery storage , like sodium ion batteries , or clean power , like small nuclear reactors , will become available and help achieve sustainability goals . p
Data centres that demand huge amounts of power can be built far faster than power utilities can expand their capacity .
Near-term plans for data centre administrators supporting Generative AI workloads
• By 2026 , half of new data centre construction will have dedicated on-site power generation capabilities to supplant grid power if necessary .
• Power shortages will limit growth of new data centres for Generative AI and other uses starting in 2026 .
• As demand for electricity exceeds supply , electricity prices will increase until a new supply-demand balance is achieved .
• Sustainability goals will be negatively affected as new fossil fuel plants will be required for reliable electricity supply .
• The number of new data centres , and growth of large language models , will be governed by availability of power to run them .
• The potential for power shortages is higher in regions with significant concentrations of data centres .
• More attractive locations for new data centres may be found in regions with few data centres .
• These areas are more likely to have the potential for surplus power available .
• Some data centre providers are working with power suppliers to lock in guaranteed supplies on long-term purchase agreements .
• Expect the cost of power to operate data centres to increase significantly as data centre operators use economic leverage .
• Increased power costs will be passed on to AI , Generative AI product and service providers as well .
• Regional power costs are likely to fluctuate significantly in areas with large concentrations of data centres competing for available power .
• Short-term power shortages are likely to continue for years .
• New power transmission , distribution and generation capacity takes years to come on line and will not alleviate current problems .
• Sustainability targets relating to reducing CO 2 emissions for the near term , three to five years will likely be missed if plans call for rapidly increasing data centre use , especially for compute-heavy Generative AI applications .
• Longer-term green alternative ways to generate power will become available , but these will take years to come to fruition .
• Adopting Generative AI applications that require less compute power will help meet sustainability goals .
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