I’m at GITEX Global, Dubai, the world’s biggest tech exhibition, and the buzz is all about AI. But there’s a elephant in the room – energy. Is there enough of it? Can we get it where it’s needed? Octopus Energy’s Co-founder and CEO, Greg Jackson, is here to shed some light, and I caught up with him over coffee just before his talk.
Me: So, Greg, do we have the energy infrastructure needed for AI?
Greg: Not even close. We were struggling before AI, with parts of the UK unable to build houses due to power shortages. Now, AI’s coming in with massive energy demands, and our infrastructure and markets aren’t ready. We’re not even at the starting line.
Me: How so?
Greg: Well, our energy systems are planned years in advance. But AI’s changing everything, and markets can’t respond quickly enough. We need signals to use existing infrastructure better and build new where it’s needed. Plus, we’re wasting energy. In the UK, we’ve spent a billion pounds this year turning off wind farms in Scotland and paying for gas instead. That electricity could power data centers.
Me: Why are we doing that?
Greg: Because the system operators aren’t looking at the grid map. They pay wind farms for electricity, then realize they can’t get it to market due to congestion. So they tell them not to generate, even though they’ve been paid. It’s madness!
Me: How did we get here?
Greg: The world’s changing exponentially, and our systems can’t keep up. Plus, we’ve built generation infrastructure without thinking about consumption. We need economic incentives to build where the energy is. Scotland could have the cheapest electricity in Europe if we did that.
Me: Why is energy so expensive?
Greg: It’s not just the UK. Every state in the US is struggling to build AI infrastructure without hiking energy bills. People need electricity now, but our systems are slow. We could build wind and solar farms in months, but we’re trying to build new nuclear plants that take years.
Me: Can’t we just use batteries?
Greg: Absolutely! Batteries are cheap and getting cheaper. The UK regulator is planning for 2030 using 2019 battery prices. It’s like building landlines after the smartphone was invented. We need to embrace these technologies now.
Me: So, what’s the fix?
Greg: We need more market mechanisms to deploy private capital quickly. Hyperscalers would pay a premium for electricity if they could get it now. We should use that to speed up deployment and bring down costs for everyone. Governments need to loosen their grip on regulations and change them fast to win the AI race.
Me: What can we do in the meantime?
Greg: Governments should use the AI opportunity to change regulations quickly. It would benefit not just AI, but also citizens with cheaper electricity and more generation capacity. It’s a win-win.
And with that, Greg was called away for his talk. I thanked him for his time and the insightful chat. The future of energy and AI certainly looks challenging, but with leaders like Greg pushing for change, there’s hope we can turn this dinosaur system around.
