The demand for artificial intelligence is driving energy innovation as energy consumption increases

Energy experts acknowledge the need for more energy sources, and are turning to new technologies and infrastructure to meet the demand.

“As an industry, we’re investing about $1.1 trillion in our infrastructure over the next five years to make sure we meet that demand and that demand,” Exelon CEO Calvin Butler said.

By 2024, data centers will account for approximately 1.5% of global electricity consumption and demand has continued to increase. This year, consumption estimates show data centers are expected to be the fifth largest energy consumer in the world, with consumption falling between the amounts used by Japan and Russia.

Exelon is one of the largest utility companies in the US. It owns and operates the electric grid infrastructure that delivers electricity to power homes and businesses.

“We are a clean transmission and distribution company. Therefore, my responsibility every day is to use a safe, reliable, and strong grid. So, I am your pipes and cables. I do not control the generation,” said Butler. “What we’ve seen across the PJM space is that supply costs are up 645% from 2024.”

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To keep up with the demand for Artificial Intelligence (AI), companies are getting smarter.

Commonwealth Fusion Systems based in Devens, Massachusetts, works to add reliable 24/7 power to the grid by using fusion power, solar and interstellar power sources.

“When you take simple nuclei like hydrogen, and you fuse them together,​​​​​​and you release energy in that process. That energy is released in the form of heat, which you can convert into electricity,” said Brandon Sorbom, founder of Commonwealth Fusion Systems and chief scientific officer.

A new study by the company shows that some in the scientific community hope to incorporate commercial use.

Commonwealth Fusion Systems estimates that its ARC fusion power plant can produce 50 times more energy than it uses and that each facility can generate enough electricity to power a small city for a year, using only as much fuel as a truckload. The papers were co-authored by 58 scientists from major universities of technology with support from private and public sector partners.

“One of these power plants we think could power about 280,000 American homes,” Sorbom said. “It releases 10 million times more energy per mass per reaction than chemical energy.”

Fusion still has a lot of uncertainty. MIT researchers estimate that fusion could provide anywhere from 10% to 50% of electricity, but the center estimates that it won’t be achieved until 2100. Some scientists say that if there are power plants that do it on the grid, it is expected to be a very expensive process.

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ARC’s planned power plant is Commonwealth Fusion Systems, a commercial facility designed to generate carbon-free electricity to help meet the growing demand for power from AI and data centers. (Commonwealth Fusion Systems)

“The biggest challenge we have right now is part of the integration process. So we are building this complex commercial system for the first time,” said Sorbom. “It’s like, there’s this big dance we’re doing right now of getting all the pieces and they’re in the right place at the right time and putting them together in a way so that when we turn on the machine, we know it’s going to do exactly what it’s designed to do.”

Instead of adding new capacity, some companies are moving data centers to locations where less capacity is needed.

“The Nordics are rich, stable, well-educated, business-friendly, great regulations, great fiber connections. In addition, there is a lot of energy – green, cheap,” said Philippe Sachs of AI infrastructure builder Nscale. “There aren’t many competing industrial needs. So it’s probably the best market in the world to have data centers.”

Nscale builds, manages and operates data center infrastructure in the Nordic countries. The company buys Nvidia chips to hire customers and offer cloud services and other AI services. Sachs is president of the company’s Europe, Middle East and Africa and global affairs.

“I think we started with a thesis about energy and energy scarcity, and in the age of AI, we understood that it was important to be in the most attractive energy markets, and there is probably no more attractive place for that than the Arctic Circle,” Sachs said.

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The specialist works on fusion-energy equipment at Commonwealth Fusion Systems, one of the few companies developing technology aimed at meeting the growing demand for electricity worldwide. (Commonwealth Fusion Systems)

The Nordic countries have a lot of land and green energy available. A cooler climate also reduces the amount of energy needed to cool the hardware.

“As it is cold for many months of the year, we can use the heat produced by the servers to heat the homes. Thus, we can create a local ecosystem that is more efficient compared to other markets,” said John Wernvik of the EcoDataCenter of Sweden.

EcoDataCenter designs, builds and operates data center infrastructure, then delivers the client’s hardware and ensures that it runs smoothly.

“We work with the biggest technology companies in the world and we do their computing needs and build the runway according to the capacity of the data center here in Sweden,” said Wernvik, the company’s chief external relations and sustainability officer.

Norway’s market is very hot – 50% of the country’s land is located above the Arctic Circle. It also has some of the lowest energy prices in Europe.

“You don’t have a huge competitive industrial demand for that energy, certainly less than the US, which favors the Arctic Circle,” Sachs said. “In some places, like in the north of Norway where we have some of our data centers, the grid is not even connected to the population center in the South where the capital Oslo is. So, there is no reason that what you do up there can affect the electricity prices in the big cities.”

Commonwealth Fusion Systems hopes to have a working nuclear reactor in the early 2030s. (Commonwealth Fusion Systems)

The Nordic countries host 134 existing data centers and 71 are expected to come online soon.

“Computing AI requires a lot of power and energy and is a large part of the cost of running these large systems and doing that efficiently in a sustainable way is, of course, very beneficial for our customers,” Wernvik said. “During the last 24 months, we’ve seen an increasing number of data centers being announced across the Nordics looking to tap into those bases as well.”

Construction costs for Arctic data centers are high. According to a data center consulting firm Turner & TownsendThe Nordic capitals Oslo, Stockholm, Helsinki and Copenhagen are among the 11 highest construction costs.

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“Many companies building data centers that have not built data centers in the Nordics before, tend to be late,” said Wernvik. “It’s a difficult thing to deal with the weather that we have in the next 12 months and when we look at the seasonal changes. So that’s one challenge if you’re coming from outside and you want to build.”

Despite the difficulty of adapting to the increase in electricity demand, companies around the world are working to find a solution.

“There is a strong connection between energy use and quality of life,” Sorbom said. “In general, you want to find ways to make more energy and do it in a clean and safe way.”