Britain’s National Grid recently announced plans to invest $1.75 billion for a 35% stake in US energy platform Joulent, a decision driven by a desire to plug further into the market for developing power infrastructure for AI data centers.
In its corporate pitch, Joulent sets out its goal to help “remove power constraints to enable the next chapter of American innovation and US re-industrialization in the AI era”. Joulent’s Across-the-Meter’ offerings are positioned as providing scalable baseload power that is co-located with customer demand while eventually connecting to the grid. The firm contends that this approach enables rapid scaling to multi-gigawatt campuses.
Back on the other side of the Pond, National Grid is looking to the new partnerships to bolster its own data center connection push. According to CEO Zoe Yujnovich:
In the UK, over the next five years, we expect to connect up to 35 gigawatts of new generation to our transmission network. We also expect to connect 19 gigawatts of new demand. That includes demand from homes, businesses, transport, data centers and industrial customers. These are large numbers. But put simply, the U.K. needs more network capacity and National Grid has a central role in delivering it.
Our task is not just to build new infrastructure, but to get more from the assets we already have, using technology and innovation to unlock capacity as efficiently as possible. As power demand continues to evolve, we’re also exploring new ways to support large energy users with reliable and integrated solutions.
Hence the reason National Grid Ventures has taken its stake in Joulent.
The National Grid deal should help fund Joulent’s first project, a 2.67-gigawatt gas-fired facility in West Texas developed in a 50/50 partnership with Chevron, which will supply a Microsoft-operated data center campus under a 20-year power purchase agreement.
Local complexities
National Grid is aware that alongside the pressing need for power to expand data center infrastructure there is also the complication at times of resistance from residents to such operations being set up in their backyard as well as global concerns around environmental impact.
Chair Paula Reynolds admits that in some places there is a strong antipathy towards seeing infrastructure built out. National Grid is very aware of that, she insists, but adds:
One of the overlays that exists around this question of data centers is the tension between growth prosperity and the needs of an advanced society because these data centers, at the end of the day, they’re for all of us in our progressed way of life through advanced computing. And the fact that all of these data centers are not going to end up being fueled by renewables is an area of great consideration on the part of all the parties. I mean, you do see the great technology companies that always said they would try to be 100% renewables, recognizing that the speed of advanced computing requires data centers and that renewables are not the only answer.
But the reality is, she goes on:
Nobody wants to see renewables not used in this environment, nor do we expect that it can all be done with renewables…One of the challenges that we have in operating these grids today is the fact that we have high aspirations in all the jurisdictions to try to be as close to 100% renewable as we can be. But when we’re talking about renewables, nuclear is very far down the road still in terms of new nuclear, even in this country as we have nuclear coming on.
So when we talk about renewables, it’s wind, solar, and then batteries to store some of the patterning. And what we really see as we look at these grids is even though we have many hours of the year where we can rely much more on renewables, we can’t rely on them 24 hours a day, and the fact is the data centers tend to be more 24 hours a day because we compute 24 hours a day.
There are technological solutions that can alleviate some of this challenge, she suggests, citing the example of Emerald AI, a tool used in data centers to figure out how to optimize demand so that they can take advantage of the patterning that reduces cost to everybody by exploiting the use of what is available at certain times of day:
What we see is even as the grid struggles in the aggregate around renewables versus non-renewables, there are tools coming into effect to try to mitigate some of that. So we are great believers as a company in the fact that actually computing will help us find some of the answers to this.
But we don’t live in a perfect world, and we do see the necessity of advanced computing in the UK and the US. I mean, we are free societies and a lot of our issues around security are tied up in our ability to have advanced computing, so we believe in it from that perspective. We believe in it from the perspective of ultimately job growth and prosperity in our economies. And what we believe is that technology will be part of the mitigant of the complexity that comes from the fact that we don’t live in a perfect world, and we can’t simply rely on 100% renewables.
Resistance
For its part, National Grid is working with the authorities to work out where best to situate data centers, ideally where there is already infrastructure on which to build, such as former power plant sites that have been de-commissioned where the transmission infrastructure is still in place. Reynolds says:
We have urged government that to the extent that they want to expedite some of these connections, these locations would be better. So I’d like to think that we are influencers of that, but obviously not our decision to make.
She adds:
But I will go on to say that there are parts of the country that have hosted infrastructure for very long periods of time. And there has been a broad understanding in these communities about the fact that this infrastructure is in service of the entire country. And we realize that when we come into new areas that have not hosted infrastructure that there is more sensitivity and there’s not the same acceptance and understanding. So we try to come in with empathy to how it feels when you are being asked for the first time to have our infrastructure come through your area.
Ultimately it comes back to the question of a greater good, she suggests, citing a conversation she had with a local official who, when asked by people what his view on data center expansion is, would tell them that, ‘We need data centers because of you and me’. Reynolds concludes:
I think what we can say is we need data centers because of everybody, but you don’t need it for this because you are managing to navigate in the society with all of the technology…We need to be cautious about the future, but we need to provide for the future
My take
A difficult circle to square. The National Grid stance that renewables are not an option 100% of the time is pragmatic. While not endorsing the bizarre ‘evil windmills’ narrative coming out of the White House these days, it’s certainly the case that arguing for total dependency on such sources of energy is, sadly, just not viable if the true societal and economic potential of AI is to be captured.