AI is in its scale phase, and we’ve got a lot of infrastructure to build.
Last Thursday, at Latitude Media‘s Transition-AI 2025 conference in Boston, speakers from across the industry agreed that forecasting power demand from AI data centers was hard, but it is likely going nowhere but up. The challenge for developers, utilities, and grid operators is how to quickly prepare for a constantly evolving landscape that values the brute force of massive data centers today — while planning for a more nimble, distributed and flexible approach meeting demand in the future.
For Caroline Golin, in her former work as the global head of market development and innovation at Google, that meant the company “needed to figure out, how do you scale storage? How do you scale demand response? How do you do real-time arbitrage, like we were just learning about here? And then how do you scale things like nuclear?”
Throughout the day, panelists and attendees grappled with how to meet the demand for exponential growth. And while there is no one way of doing things, Jigar Shah summarized the hopeful consensus that began to emerge: “I guess we’re going to have to do things differently than we’ve been doing it for the last 50 years.”
Regulators of course will have to adjust, but so do utility planners, data center and energy project developers, and even customers, who will have to grapple with the same level of complexity around integrated resource and procurement planning that a utility has today.
In the power sector, as in many other areas of the economy, AI is a forcing function. It makes change inevitable rather than optional.
For Google and other hyperscalers, it means moving past using utility green tariffs and RECs and 20-year renewable energy PPAs, and instead investing directly in capacity and flexibility to build a holistic energy strategy.
For infrastructure investors it often means combining or blending digital and energy teams and capital to approach AI infrastructure as something unique in the market that today rivals the largest projects on the planet.
As for regulators, they have a lot of work ahead of them. There should be a means of protecting ratepayers from footing the bill for infrastructure devoted to data centers, but the patchwork today isn’t sufficient, and speakers consistently swung between the need to adopt new regulations and a wholesale change to the entire culture of regulation (good luck!).
Too much was said throughout the day to summarize in a single article. But I’ll end by offering a sampler of insights from the day:
Jigar Shah, former DOE Loan Programs Office director: “So we don’t have a capital problem, and everyone is just long capital. When you go right now into the marketplace and say, ‘I’ve got 200 megawatts with the batteries, and I need financing,’ all of those deals are getting done this week. There’s so much money that they’re like, ‘Send me more deals. I have so much money. I’ve already raised it, and now I have to put it out the door.’”
Peter Nulsen, Generate Capital: “I think anyone who’s done a big energy infrastructure project knows it’s one thing to do a 500 MW energy project; it’s another thing to build the load at the same time you’re building the energy. So now you have a massive data center and a massive energy project, and the EPCs, the developers, the sponsors, the investors, and then the tenant of the data center who usually is calling all the shots. So if those are separate entities, you’re upwards of seven-plus entities. The complexity just multiplies.”
Mike Kramer, VP of data economy strategy, Constellation Energy: “[Three Mile Island] was one of the best-operating facilities in the country before it shut down in 2019, so we intend to bring it back in the same condition — or better than where it was before — to continue to operate that site at the 94%-plus capacity factor that it was before it shut down.”
Dawn Owens, Fervo Energy, on the added value of clean firm power: “From our perspective we ended up seeing that people now are valuing that somewhere between $15 and $20 per megawatt hour. They’ve finally gotten that that is actually the value of the capacity factor of clean firm power.”
Reggie Singh, US State Department: “I would note the administration has issued 11 executive orders on energy, including four recently on nuclear. So nuclear, clean firm power, the administration is fully behind it. Geothermal, as well, is mentioned in a couple of executive orders. So it’s not the case that there’s no room for clean firm power. It’s that there’s not going to be, at least under this administration, top down requirement for that.”
A version of this story was published in the AI-Energy Nexus newsletter on June 18. Subscribe to get pieces like this — plus expert analysis, original reporting, and curated resources — in your inbox every Wednesday.
