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On July 25, 2024
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Renewable energy demand could triple as electricity consumption surges
A wind farm near solar panels near Palm Springs, Calif., in March.Mario Tama / Getty Images file Renewable energy demand will triple over the next seven years as data center growth accelerates to facilitate the proliferation of artificial intelligence, NextEra Energy CEO John Ketchum said Wednesday. NextEra added 3,000 megawatts of renewable and storage projects to its order backlog in the second quarter. Of those, 860 megawatts -- or 28% -- come from agreements with Google to power the tech company's data centers. "This marks our second best origination quarter ever," Ketchum told analysts on the company's earnings call Wednesday. "These results support our belief that the bulk of the growth demand will be met by a combination of renewables and battery storage." NextEra's business with tech and data center customers currently stands at seven gigawatts of renewable assets in operation and in backlog, said Brian Bolster, NextEra's chief financial officer. NextEra stock was up 3.5% in early afternoon trading. It is the largest power company in the S&P utilities sector by market capitalization and operates the largest renewable portfolio in the U.S. Shares have gained 24% year to date and 12% over the last three months, as investor enthusiasm over the company's position to meet growing U.S. power demand. NextEra expects power demand to grow four times faster over the next decades compared to the prior 20 years on demand from data center, manufacturing and the electrification of the economy, Ketchum said. Consulting firm Rystad Energy recently forecast that data centers and the adoption of electric vehicles alone will result in additional 290 terawatt hours of electricity demand in the U.S. by 2030. That's equivalent to the entire power demand of Turkey, according to Rystad. Executives at some of the biggest utilities in the U.S. have warned that failure to meet this demand will jeopardize the nation's economic growth. Rebecca Kujawa, CEO of NextEra Energy Resources, a subsidiary NextEra Energy, said it will take time to nail down concrete numbers on exactly how much demand is coming from data centers in particular. "But there is no escaping the fact that these are very large numbers and numbers that I don't think any utility across the industry has seen before," Kujawa said Wednesday. "From a practical standpoint, it's going to take a couple of years for this really to materialize and utilities to be able to absorb it and serve it." Natural gas is also expected to play a key role in meeting power demand, though there is an ongoing debate about how the power mix will break down between gas and renewables. Producers and pipeline operators have argued that renewables, which are dependent on sun and wind conditions, will need gas as backup to ensure reliable power. Alan Armstrong, CEO of pipeline operator Williams Companies, told CNBC last week the U.S. risks falling behind in the AI race if it doesn't embrace natural gas as a power source. Ketchum said natural gas has an important role to play as a bridge fuel during the energy transition. NextEra owns and operates a natural gas fleet in Florida. But the CEO said renewables come at a lower cost and are faster to deploy. Building new natural gas generation is "more expensive in most states, is subject to fuel price volatility, and takes considerable time to deploy given the need to get gas delivered to the generating unit and the three- to four-year waiting period for gas turbines," Ketchum said. With power demand expected to surge, there is growing interest in nuclear energy as a source of reliable, carbon free energy. Ketchum indicated Wednesday that NextEra is considering restarting the Duane Arnold nuclear plant in Palo, Iowa, though it would require a thorough assessment. The plant ceased operations in 2020. "We would only do it if we could do it in a way that is is essentially risk free with plenty of mitigants around the approach," Ketchum said Wednesday. "There are a few things that we would have to work through but yes -- we are we are looking at it." NextEra is rated as a buy equivalent by 70% of Wall Street analysts, with an average price target of $79.12 per share, suggesting nearly 10% upside from Tuesday's close of $72.11.
[2]
Renewable energy demand will triple as electricity consumption surges, NextEra CEO says
Renewable energy demand will triple over the next seven years as data center growth accelerates to facility the proliferation of artificial intelligence, the NextEra Energy CEO said Wednesday. NextEra added 3,000 megawatts of renewable and storage projects to its order backlog in the second quarter. Of those, 860 megawatts -- or 28% -- of which comes from agreements with Google to power the tech company's data centers. "This marks our second best origination quarter ever," John Ketchum told analysts on the company's earnings call Wednesday. "These results support our belief that the bulk of the growth demand will be met by a combination of renewables and battery storage." NextEra's business with tech and data center customers currently stands at 7 gigawatts of renewable assets in operation and in backlog, said Brian Bolster, NextEra's chief financial officer. NextEra stock was up 3.5% in early afternoon trading. It is the largest power company in the S&P utilities sector by market capitalization and operates the largest renewable portfolio in the U.S. Shares have gained nearly 23% this year and 12% over the last three months, as investor enthusiasm over the company's position to meet growing U.S. power demand.
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NextEra sees renewables demand tripling as data center power needs ramp up
NEW YORK, July 24 (Reuters) - NextEra Energy expects demand for new renewables power to triple over the next seven years to meet quickly rising electricity demand from technology and data center customers, the company said on Wednesday. NextEra, which is based in Florida, was also cautiously considering a restart of its Duane Arnold nuclear plant in Iowa. Executives with NextEra, which has the world's largest renewable energy business, said rising U.S. power consumption would provide opportunities and demand if they company proceeds with resurrecting its nuclear plant, which was shut in 2020. "It is something that we are looking at, but there's a lot of thought that has to go into it," said NextEra CEO John Ketchum, who added that the company would need to fine a risk-free approach to any restart. U.S. power companies, including Constellation and others with nuclear power, are particularly expected to benefit from the pledges by big tech firms to invest in new climate-friendly energy generation to cater to surging AI power needs. NextEra sees its total renewables portfolio with technology and data center customers, including assets in operation and in backlog, standing at seven gigawatts (GW). Its renewables segment saw a rise of 3 GW worth of renewables and storage projects in the quarter, with one of the project being Google's 860 megawatt (MW) demand for its data center power. "Some of this is going to be a little bit longer to materialize on the gross side" said Rebecca Kujawa, chief executive of NextEra Energy Resources, adding that some projects could start up between 2026 and 2028. (Reporting by Laila Kearney and Seher Dareen; editing by David Evans)
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NextEra Energy CEO John Ketchum predicts a significant increase in renewable energy demand, driven by the growing power needs of data centers and AI technologies. This surge is expected to reshape the energy landscape in the coming years.
NextEra Energy, a leading player in the renewable energy sector, has made a bold prediction about the future of energy consumption. John Ketchum, the company's CEO, anticipates that the demand for renewable energy will triple in the coming years, primarily driven by the increasing power needs of data centers and artificial intelligence technologies 1.
The rapid expansion of data centers, fueled by the growing reliance on cloud computing and AI applications, is set to significantly impact electricity consumption patterns. These digital infrastructure hubs are becoming major energy consumers, with their power requirements expected to surge in the near future 2.
Artificial Intelligence, a key driver of technological advancement, is also contributing to the increased energy demand. As AI applications become more prevalent across industries, their computational requirements are escalating, further boosting the need for reliable and sustainable power sources 3.
NextEra Energy is positioning itself to capitalize on this projected growth in renewable energy demand. The company, already a significant player in the renewable energy market, sees this trend as an opportunity to expand its operations and influence in the sector 1.
This anticipated surge in renewable energy demand is likely to have far-reaching implications for the entire energy sector. It may accelerate the transition away from fossil fuels, drive innovation in energy storage technologies, and potentially reshape energy policies and infrastructure investments 2.
While the projected increase in renewable energy demand presents significant opportunities, it also brings challenges. The energy sector will need to rapidly scale up production and improve distribution networks to meet this growing demand. Additionally, there will be a need for continued technological advancements in renewable energy generation and storage to ensure reliability and efficiency 3.
Major US utility companies are reporting a significant increase in power demand from data centers, driven by the rapid growth of artificial intelligence. This trend is expected to boost their revenues and necessitate substantial infrastructure investments.
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The rapid growth of artificial intelligence and data centers is putting unprecedented pressure on the U.S. power grid. This surge in energy consumption, coupled with increasing electrification and extreme weather events, is challenging the nation's aging electrical infrastructure.
3 Sources
A new report predicts a significant increase in US electricity demand over the next five years, driven by electrification and economic growth. This surge presents both challenges and opportunities for the power sector.
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The rapid growth of artificial intelligence is causing a surge in energy consumption by data centers, challenging sustainability goals and straining power grids. This trend is raising concerns about the environmental impact of AI and the tech industry's ability to balance innovation with eco-friendly practices.
8 Sources
The rapid advancement of artificial intelligence is driving unprecedented electricity demands, raising concerns about sustainability and the need for innovative solutions in the tech industry.
4 Sources