Can U.S. energy industry keep up with AI's thirst for electricity? Trade group has concerns.

By Maya Levine

With AI use projected to push consumption higher, former Energy Secretary Dan Brouillette says the energy sector's struggle to meet demand should be a 'red flag' for Americans

Peak U.S. electricity demand is expected to increase by 38 gigawatts by 2028, experts say. That's about 3.8 billion LED bulbs worth of power.

Dan Brouillette, who served as energy secretary in the Trump administration, worries that the industry may not be able to meet that demand.

In an interview with the bipartisan Center for Strategic and International Studies on Tuesday, Brouillette, now the head of the Edison Electric Institute, the industry's trade association, said that the energy sector's struggle to meet demand should be a "red flag" for Americans.

"As we look at the demand and we look at our ability to meet the demand today, we're on a razor's edge. And it doesn't take much to tip it one way or another, which is why we see brownouts and blackouts in parts of the country," he said.

What's driving demand?

A key factor in the expected surge in demand for power is the increasing use of artificial intelligence.

"If you do a search on the internet and you use AI, it's roughly 10 times more electricity than the old versions of search," Brouillette noted in his remarks.

As AI becomes more integrated into U.S. industry and culture, demand for energy to power the tool is expected to soar. That will come on top of other expected demand increases associated with things such as electric vehicles and extreme weather.

"[AI] is exacerbating a problem that was already there." Brouillette said. "If you stripped out AI, you would still see a shortfall."

Can the power sector meet demand?

To satisfy the expected increase in demand, the power sector needs to develop more robust infrastructure for the generation and transmission of all forms of energy, Brouillette said.

The only thing preventing a meaningful increase in power generation and transmission capabilities is a lack of political will, he added.

Although the energy sector boasts plenty of investment, capital and development incentives, building new infrastructure to satisfy the expected increase in demand could still be challenging due to the pace of permitting.

Efforts by the Biden administration to expedite permitting processes and encourage the development of clean-energy infrastructure - including a $1 billion investment from the Inflation Reduction Act - are "not enough," Brouillette said.

He suggests a more thorough reform of legislation like the 1970 National Environmental Policy Act, which he sees as important but "seriously abused." One change Brouillette proposes would limit the ability of multiple agencies to each conduct a time-consuming analysis for a single permit application.

Brouillette also said he hopes the government will work closely with utility companies to protect consumers while promoting the infrastructure development necessary to meet rapidly growing demand.

Why does this matter?

An overburdened power sector poses practical concerns for Americans, as seen with the near-collapse of the Texas grid in 2021 and the difficulties California faced in keeping the power on during record heat in 2022.

The energy industry also faces national security concerns surrounding trade, supply chains and foreign policy. Brouillette said that the government should recognize the infrastructure components most critical to national security and ensure that they are protected. He also emphasized the importance of using technological advancements to decrease reliance on the global supply chain.

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06-11-24 2050ET

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