“I sell here, Sir, what all the world desires to have – power”
Matthew Boulton
This will be a discussion about the increasing electricity demands made by A.I. initiatives, their associated data centers, and the tremendous land requirements these will require, but we will take a circuitous route to get there – no pun intended (maybe a slight pun intended).
In ancient Rome, the god Janus presided over all beginnings and all endings, whether abstract or concrete, sacred or profane. The month of January is cleverly named in his honor as its calendar position allows it to simultaneously look back toward the last year and forward to the new. In the city of Rome, the gates of the building dedicated to his honor were opened in times of war and closed in times of peace. Those gates being closed were said to be a good omen as they would trap the peace inside, while their opening would symbolically allow the return of Rome’s citizens to their martial and civic duties.
The doors of the Three Mile Island Nuclear Generating Station hold much the same significance to modern-day energy observers. Commissioned in 1974, it was the site of America’s worst nuclear disaster when Unit No. 2 suffered a partial meltdown on March 28, 1979. While there were no deaths or injuries caused by the event, and while the surrounding landscape was spared what could have been a devasting ecological disaster, the event caused the plant’s second generating unit to cease operations immediately thereby halving the potential output of the power station. Unit No. 1 continued in use until it too was eventually decommissioned in September of 2019 as it had become too expensive to operate given the value of the electricity that could be produced and sold.
This was much the same story at nuclear-generating facilities around the nation. Because of onerous and costly permitting processes, it takes a very long time to bring online a new unit at an existing facility and an even longer time to propose, permit, and build an entirely new facility. While the Vogtle Unit Nos. 3 and 4 were just brought online this year at the Alvin W. Vogtle Electric Generating Plant in Georgia, it had been eight (8) years since the previous newest unit had been brought into service – the Watts Bar Unit No. 2 at the Watts Bar Nuclear Plant in Rhea County, Tennessee. Before that, it had been a long time since any additions were made to the nation’s nuclear generating capacity (See Figure 1). As it now stands, nuclear power provides approximately 95.8 GW or twenty percent (20%) of the nation’s commercially available electricity. This electricity is produced at ninety-three (93) operating commercial reactors, the vast majority of which came online between 1970 and 1990.
Figure 1 – U.S. Nuclear Power Capacity Additions
Nuclear generating plants of this type dwarf the output of smaller, more conventionally powered generating plants. Utility-scale solar and wind farms will usually produce between two and three hundred megawatts (200 – 300 MW) of electricity and most natural gas combined-cycle plants have a capacity range of between six and seven hundred megawatts (600 – 700 MW) per block. By contrast, the average nuclear-generating plant will produce sixteen hundred megawatts (1.6 GW) of power. When it was initially decommissioned, Unit No. 1 at Three Mile Island was by itself producing approximately four percent (4%) of all power used in the state of Pennsylvania.
The story of the past several decades was of the decommissioning of America’s nuclear-generating facilities and their replacement by natural gas and non-hydro renewable facilities. Owing to the advancing age of the nation’s nuclear power plants and the cost required to keep them generating electricity in an efficient and competitive manner, this cycle will continue over the next several decades. But for every rule, there must be an exception, and this is no different. On September 20, 2024, Constellation Energy, the operator of Three Mile Island, announced that it had signed an agreement with Microsoft to recommission and restart Unit No. 1 and begin generating electric power there within the next several years. Microsoft, for its part, agreed to buy twenty years’ worth of power from the plant. Of interest here is why Microsoft needs the same amount of power that used to supply four percent of Pennsylvania’s total power needs. For the next twenty years, the total electrical output of Three Mile Island Nuclear Generating Station will power Microsoft’s A.I. data centers. The realization of just how much power is needed by just one company’s A.I. program, albeit a large, industry leader, should be enough to give one pause. The scale and scope involved in the shift to an A.I.-focused world and associated economy is unlike anything the previous three decades have seen.
After a period of increasing demand between the end of the Second World War and the mid-1990’s when Americans bought refrigerators, electric home appliances, televisions, computers, air conditioners, and ever-larger houses, the electric demand chart presented as Figure 2 shows a flattening of the demand curve as greater efficiencies canceled out any new demand placed on the market. It took the better part of five decades for the nation’s electricity demand to rise from one terawatt hour (1TWh) to four terawatt hours (4TWh) at which level it generally plateaued for the next three decades. Forecasts now call for that curve to begin to climb once again as America seeks to decarbonize its existing grid and electrify as much as possible in the coming decades. While there will be many sources of demand growth, from electric cars and ever-increasing digitization in the home and automation at work, the greatest new demand on the system will be from data centers; and specifically, from data centers tied to traditional and generative A.I.
Figure 2 – U.S. Historical and Forecasted Electricity Demand
The next few decades will likely see either a return to the linear growth of the post-war period or, if the more optimistic forecasts are correct, a period of exponential growth. At present, the nation and its infrastructure cannot accommodate this sort of growth. While it is true that in the nation’s utility interconnection queues sit proposed projects with enough generative power to double that already in existence, the reality is that only about five percent (5%) of the projects in the various queues ever actually succeed in getting built (For a more in-depth discussion on the general topic of the utility interconnection queue process and status please see a previous blog post – The Value in Patience: The Interconnection Queue Process).
Even if we get the interconnection process sorted, the nation’s transmission and delivery system is woefully unprepared to transport that amount of power between the generators and the demand sources. Many of the nation’s utilities have started requiring that the developers of a proposed project under review agree to also fund and construct the necessary upgrades to grid infrastructure prior to gaining a Generator Interconnection Agreement. The associated costs, which can be quite onerous, are being passed on to the rate payers in the form of higher electricity bills. As the number of projects continues to grow and as the associated costs continue to mount, decisions will have to be made as to exactly which groups or entities must shoulder the primary financial burden to decarbonizing and modernizing the nation’s grid. For while it is possible to make a competent argument as to why a residential rate payer would benefit from a decarbonized grid and domestic data center capability greater than that found in China, Russia, or Iran, there comes a point where rate payers shoulder too much of the initial financial input required allowing large tech and data companies to prosper from the new found upgrades.
There is no doubt that A.I. has the potential to change almost every facet of our lives, but that discussion is beyond the scope or purpose of this blog. Instead, this discussion will focus on how the rapid adoption and evolution of A.I. will affect and be affected by the acquisition of land suitable for siting the as yet unbuilt power generating plants that will fuel its existence. All power generating plants required space, some more so than others. That land does not exist in a vacuum, but somewhere within the borders of the United States. Further, as it is in the best interests of communities and landowners for land to be put to some productive use, it is likely that the land needed to site new generating plants is already being used for some other purpose. Removing it from that purpose and the damage that might cause must be weighed in the effort to produce as much power as possible over the next few decades. What is more necessary to the security and stability of the nation, the three hundred megawatts that can be generated on a 3,500-acre solar farm or 3,500 acres of corn, soybeans, wheat, or cattle? Does a company’s desire to create and run A.I. bots to streamline their protocols and workflows matter more than preventing or reducing price inflation in the meat or cereal aisle? Is it fair to ask all utility rate payers, residential as well as corporate, to fund the required generation capacity and transmission increases and grid modernization when it will likely be the tech companies and businesses that reap the most reward from their evolution? These are questions that companies, individuals, government planners, and ethicists will have to consider over the next few decades.
At present, the grid sources its power from a combination of nuclear, coal, natural gas, and hydro and non-hydro renewables. Over the coming decades it is not expected that any of those sources will be completely removed from the grid, but their percentage input will likely change. Figure 3 provides a visualization as to the various sources that have powered the U.S. grid in the past, at present, as well as providing forecasts out to the year 2050. Over time the contributions from coal and nuclear sources will continue to diminish while natural gas and non-hydro renewables will become the predominant sources of power. It would be difficult to entirely remove either coal or nuclear power as the former offers the lowest price point per kWh and the latter represents likely the most efficient large-scale means to produce electric power. But the fact remains that the required expansion necessary to continue to fuel this nation’s economic growth over the next 30 years will be one of constructing more natural gas, solar, and wind generating plants.
Figure 3 – Sources of U.S. Electricity Generation
The various methods of power generation each require a different amount of land in order to permit their efforts. The renewable industry requires an immense amount of acreage in order to generate electric power. A three hundred megawatt (300 MW) wind farm will make headlines by requiring over thirty thousand acres (30,000 ac.) but this is misleading as each individual turbine occupies less than an acre of land when situated and the remaining acreage under lease can still be simultaneously utilized for many other purposes. On average, a utility-scale solar farm requires 7 acres of land for every one megawatt of power generated. A three hundred megawatt (300MW) solar farm would therefore require just over 2,000 usable acres of land on which to generate electricity. Added to this must be the necessary road and access point infrastructure, space for inverters, green buffers, drilling set-asides, connecting lines, and whatever linear right-of-way is needed to connect the generating station with the existing grid. When one factors in all of this a large utility-scale solar farm can take up as much as 3,000 to 3,500 acres of land. While a coal-powered plant (250 to 400 acre generating stations) and natural gas-powered plant (30 acre generating station) require far less acreage on which to be situated, one must not forget the necessary elements of resource production and transportation such as mines, wells, gathering stations, processing stations, storage yards, and pipelines which are required to produce and transport the coal or gas burned at the power plant. On average, a nuclear generating station requires fifty acres (50 ac.) of land to generate one thousand megawatts (1,000 MW) of electricity, but for obvious reasons, this generating site is then surrounded by a safe, set-off zone of one square mile bringing the total land set aside to approximately seven hundred acres (700 ac.) for each plant.
Each of these types of generating stations are best situated near the population and industrial centers they will eventually serve. The farther electricity must travel between its place of generation and its eventual demand center the more money which must be spent on minimizing the loss of electrons through transmission. This reality sets up a situation wherein prime acreage that would otherwise have been used to grow crops, raise livestock, automate vast warehousing complexes as we re-shore supply and delivery capabilities, power advanced new factories as manufacturing activity is brought back to the nation, or build the next ring of residential subdivisions in the nation’s ever-expanding suburban sprawl, will instead face intense competition from those seeking to provide the electric power necessary for each of those activities.
For the better part of the last three decades the United States has been content to allow other nations to serve as our essentially unregulated, lower-cost manufacturing base and we have experimented with the notion of “Just in Time Delivery” protocols that reduced the amount of warehouse space needed domestically. But the lessons (hopefully) learned during the Covid-induced supply chain shortages and with more of the world seemingly less friendly to American advances and leadership, it is becoming apparent that these will need to be brought back to the United States. Their attendant power demands, when combined with those of a still increasing population will compete with the power needs of A.I. and its seemingly insatiable demand for reliable and cost-efficient electricity. For their part, A.I. data centers and their associated electrical needs will transform not just the domestic electric utility grid but the nation itself. In all likelihood, it will be necessary at the local, state, and federal level to provide some regulatory framework to ensure that none of these activities, each quite valuable to society as a whole, will be entirely outcompeted and marginalized.
Some of this new capacity will come from expanding and making more efficient use of what we already possess. Some will come from new ways of approaching the issue of supply and demand. Whereas utilities used to operate large power plants that would supply power to a grid full of demand users, it is now possible to set up and manage smaller power providers that serve either smaller, individual commercial and industrial customers or small communities. Community-scale solar projects are being designed and situated wherever permitted across the United States to serve needs not being readily met by the existing system and intelligent micro-grids are being designed to use the power available to them in the most efficient and cost-effective manner possible.
But even with all the efficiencies we can bring into the existing system it remains clear that we will need to site and build a tremendous number of new utility-scale generating facilities throughout the United States. I don’t know if anyone has yet been able to conceive of, much less fathom, how much land will eventually be needed as a part of this effort. The recommissioning of Three Mile Island for the sole use of Microsoft’s A.I. initiatives is both an indication of the scale and scope of the current issue and a harbinger of what is likely to come. The demand for ever greater amounts of electricity over the coming decades will change the economic, regulatory, and physical landscape of America in ways we are only just beginning to think about. For better or worse, the doors to Three Mile Island Generating Station are about to be cast open again. Perhaps Janus has an eye on what will come of it.
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