AI’s Rapid Expansion and Power Demand
Artificial Intelligence (AI) is no longer a distant dream—it’s rapidly becoming a reality on an unprecedented scale. As companies scramble to establish large-scale AI data centers, they are confronted with significant lead times for essential infrastructure, including generators, uninterruptible power supplies (UPS), HVAC systems, and other critical equipment. While improvements have been made in lead times for standby generators, switchgear, HVAC, and UPS systems compared to two years ago, these timelines still pose challenges.
The strain on the Grid and Infrastructure
The rise of AI is expected to drive a substantial increase in power demand, placing further strain on an already overloaded grid. The growing electrification of vehicles—cars, trucks, construction equipment, and other devices—is contributing to an increasing demand that the current infrastructure struggles to support.
Renewable Energy and Its Limitations
In the face of this growing energy demand, the global push to reduce carbon footprints remains a priority. However, renewable energy sources such as solar and wind, while promising, are not always reliable. Solar power is unavailable at night, and wind power is inconsistent. These sources are most effective when combined with energy storage systems that allow us to use power when it’s needed. Generators play a vital role in this mix by providing stored energy.
Hybrid Energy Storage Systems (HESS) as a Solution
The solution lies in Hybrid Energy Storage Systems (HESS), which combine multiple power generation sources with energy storage to create a robust and reliable system for both prime and standby power applications. HESS can significantly reduce carbon footprints during the construction and operational phases of AI data centers and offer a range of other benefits. ANA Inc. is at the forefront of integrating HESS into data center power solutions, leading the industry with innovative approaches to energy storage and sustainability.
Rising Power Demand and Industry Opportunities
According to industry experts, power demand from AI is projected to increase by an average of 70% annually through 2027, largely due to the expansion of data centers. To meet this demand, power providers—particularly regulated utilities—are likely to invest in renewable energy and storage projects. Despite these efforts, there will still be a need for reliable standby power in case of utility failures. As AI becomes more embedded in products and services, energy demand will continue to escalate. By 2025, AI’s power demands alone could account for a third of the total power needed by data centers in 2022.
This surge in demand presents significant opportunities for our industry. The need for standby generators, switchgear, and UPS systems will drive business growth for years to come. ANA Inc. is leading the way in offering more environmentally friendly power solutions for data centers, including mobile hybrid systems used during the construction phase. Traditionally, pure generators have powered construction sites, but there is growing awareness among data center owners and general contractors about the benefits of using HESS during construction. These systems reduce fuel and energy costs and lower the carbon footprint of long-term projects, which is increasingly important as companies strive to improve their Environmental, Social, and Governance (ESG) scores.
Overcoming Grid Constraints and Advancing Technology
Data center expansion is closely tied to the growth of the power grid, which is currently constrained by limited capacity, planning and permitting delays, and supply chain issues. Utility companies will need to develop new generation and transmission capacity to meet the rising demand, but this process will be slow. In the interim, HESS can serve as a reliable power source, functioning similarly to a UPS. HESS battery storage can provide or supplement peak power demands, with charging from low-rate utility sources or other power generation methods. Advanced battery technologies, such as Lithium Titanate Oxide (LTO) batteries, offer fast recharge rates, reduced HVAC needs, and greater safety compared to traditional batteries. They also have a longer cycle life and lower environmental impact, enhancing sustainability.
Sustainability and Future Trends
Data centers are increasingly focused on sustainability. The growing power demands of AI could exacerbate global carbon emissions, but technological advancements in power grid optimization, renewables, and energy storage can drive long-term sustainability. Many data center owners and operators are setting decarbonization and net-zero targets, hoping to meet their electricity needs with renewable energy. Carbon capture technologies can further reduce emissions from onsite engines.
Using HESS in conjunction with renewables and natural gas engines can lower emissions compared to diesel engines. Gas engines, when used primarily as “battery chargers” with batteries providing the main power, mitigate the impact of high transient loads. Combining gas engines with carbon capture technologies, renewables, and battery storage can lead to net-zero emissions.
Jack Harris shared these insights during his keynote address at the EGSA Fall Conference 2024, highlighting the pressing need for innovative power solutions to meet the surging demand driven by AI. His discussion underscored the critical role of Hybrid Energy Storage Systems in addressing both the immediate and long-term challenges of power demand and environmental sustainability. ANA Inc. continues to lead the industry with cutting-edge solutions and a commitment to a more sustainable energy future.
The surge in AI-driven power demand, the need for new data centers, and the push for more reliable and environmentally friendly energy solutions are shaping the future of our industry. From powering data center construction to providing standby power and introducing innovative HESS solutions, these developments will fuel our business for years to come.
Stay Connected
To keep up with the latest advancements in energy solutions and to see how ANA Inc. is leading the industry, follow us on LinkedIn. For more insights from Jack Harris and updates on our cutting-edge projects, visit our website.
Jack Harris
Director of Power Development
