The answer to AI’s energy needs could be blowing in the wind

Data centers and offshore wind farms can be a perfect match as AI becomes increasingly energy intensive.

Many of the companies rushing to deploy new productive AI tools are also making significant commitments to reduce greenhouse gas emissions. The rush to build new AI data centers could derail these climate change goals if clean energy sources are not found.

AI data centers have a feature that works well with offshore wind farms. And the offshore wind industry, already converging with big tech, certainly needs a boost in the face of more uncertain economic waters.

“Data centers and artificial intelligence,” Mads Nipper, CEO of offshore wind energy development giant Olstead, said on an earnings call last week. “We are excited about the business opportunities in data centers and artificial intelligence,” Mads Nipper, CEO of leading offshore wind farm developer Olstead, said in an earnings call last week.

By 2026, AI could consume 10 times more power than in 2023

Giants like Microsoft and Google are dedicated to developing the best AI tools and are embedding AI in every platform imaginable, from gaming to social media, business applications to search. But this comes at a huge energy cost.

By 2026, AI could consume 10 times more energy than it did in 2023, according to the International Energy Agency.The data centers used to train AI are even more energy intensive than the traditional data centers used to manage global emails and cat videos.They also consume more energy than the traditional data centers used to manage global emails and cat videos. And AI data centers are occupying more real estate than ever before. The data centers being built in North America combined will require as much annual energy as all the households in the San Francisco metropolitan area, according to a report released in February by real estate services firm JLL.

‘If we can build our data centers near offshore wind farms, we can provide a large source of attractive power. President Nipper said in the results briefing: “If we can build a data center near offshore wind farms, we can provide a large supply of attractive electricity.

What makes data centers for AI particularly attractive to offshore wind power developers will be flexibility. Unlike other data centers, data centers used to train AI models don’t have to worry too much about being located near population centers to reduce latency. They could also, in theory, more easily be turned up or down in response to weather fluctuations, which is a challenge when relying on wind power. In other words, AI data centers can use excess energy that might otherwise be wasted.

Odin Foldvik Eikeland, an analyst at research firm Rystad Energy, said: “It’s a really unique situation because in the big picture there are not many sectors that are flexible [in their energy use]. It can also open up very good collaborations. I see no reason why it shouldn’t”.

“It can also open up very good collaborations. I see no reason not to do it.”

For high-tech companies, offshore wind farms are attractive not only as an abundant source of carbon pollution-free energy. There are other potential benefits. Microsoft has launched a research project called Project Natick to investigate the feasibility of offshore wind-powered subsea data centers. Onshore data centers have raised concerns about the amount of power and water used for cooling systems. Storing servers on the seabed could cool them more sustainably. Storing servers underwater can also prevent corrosion from oxygen and moisture. After two years, Microsoft servers at Project Natick failed at only one-eighth the rate of servers on land.

High-tech companies have made a number of climate change commitments in recent years and have become the biggest buyers of renewable energy – Microsoft, which has invested more than $13 billion in OpenAI, last week agreed its largest renewable energy purchase to date. In February, during the ‘Gemini era’, Google announced the largest offshore wind power contract to date to power its data centers in Europe. Both companies pledged to cover 100% of their electricity use with carbon-free energy purchases by 2030.

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This is a windfall for offshore wind developers like Ørsted at a time when they are facing severe economic challenges. The offshore wind industry is still struggling to find its feet and accounts for less than 1% of global electricity generation. In addition, supply chain disruptions and rising inflation have stalled the sector since the outbreak of the 19 infection, leading Ørsted to cancel two major projects in the US late last year.

However, utilities are running out of time to figure out how to meet rising electricity demand. The electrification of homes, buildings and cars will put more pressure on the grid. The boom in new data centers used for crypto mining and artificial intelligence is another big challenge. And all of this is happening at the same time.

Stephen Maldonado, North American wind research analyst at Wood Mackenzie, says: ‘I think there’s a good chance that this demand will encourage utilities to pursue offshore wind as a way to meet their decarbonization goals. Offshore wind farms are particularly attractive in densely populated coastal areas where there is not much space on land to build skyscraper-sized turbines.

Whatever happens next, a balance needs to be struck

Whatever happens next, a balance needs to be struck. For example, the US has yet to use enough renewable energy to meet its climate change targets. There is also a danger that the proliferation of new AI data centers will siphon clean energy away from arguably more important things, like turning on the lights in people’s homes. However, if data centers don’t run on clean energy, fossil fuels will replace them. TC Energy, which operates gas pipelines, said in a results briefing last week that it expects new data centers to lead to an increase in demand for gas-fired electricity.

“It is important that these data centers ensure that the electricity they buy comes from clean and renewable sources like solar and wind,” Eikeland said. “It is important that these data centers ensure that the electricity they purchase comes from clean and renewable sources such as solar and wind.