Welcome to Grid Brief! Here’s what we’re looking at today: how AI is being used to support the grid, what the Fed’s rate cut could mean for energy, and India shows the challenges of decarbonizing grids in developing nations.

AI is Straining the Grid, But Could it Also Save It?

It’s no secret that data centers and the artificial intelligence boom present a serious challenge for grid regulators. These technologies, plus the increase in electrification through EVs and heat pumps, could lead to significant capacity shortfalls if new generation is not brought online. Using the very thing that could threaten the grid, developers are utilizing their AI expertise to create solutions to bolster reliability.

One solution comes from the University at Buffalo, where researchers have designed an AI model to remediate power outages by automatically rerouting electricity in milliseconds. Importantly, this model redirects electricity before an outage happens. While further research is needed before the system can be implemented in the real world, it still represents an exciting development in the world of AI.

One of the largest strains of data centers is their cooling systems, which account for half of their power consumption. Google has created a demand response system that automatically reroutes non-urgent compute tasks to other data centers at times of high grid stress. Demand response systems like these could also capture the full potential of renewable energy sources by rerouting data center activity to times of high sun or high wind.

What Lower Interest Rates Could Mean for Energy and the Grid

Yesterday, the Fed announced long-awaited cuts to interest rates, cutting benchmark rates by a half-percentage point. While cut will provide immediate relief to consumers with credit card balances or small businesses with variable-rate debt, larger long-term borrowing costs have been declining in anticipation of the cut. Nevertheless, this rate cut will undoubtedly increase investment in the cleantech and energy space.

Over the past few years, steep interest rates have shuttered offshore wind, advanced nuclear, and some natural gas projects. High interest rates can also hurt competitiveness in the power sector broadly by raising barriers to entry for new players which protects established parties.

This rate decrease should encourage more investment in larger, capital-intensive energy projects. Lower interest rates also de-risk investments in emerging technologies including renewables, next-generation nuclear, innovative transmission, and more.

However, no matter how much investment we see in the space or how many projects receive funding to get built, what is ultimately needed is meaningful permitting reform to bring these projects online.

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Conversation Starters

• NRC issues construction permit for Natura Resources molten salt reactor at ACU (PR Newswire)

  The Nuclear Regulatory Commission has issued a construction permit to Abilene Christian University to build the Natura MSR-1, marking the first liquid salt fueled reactor licensed by the NRC in American history and the first U.S. university research reactor approved in more than 30 years.

• India demonstrates challenges of decarbonizing the grid in developing nations (Bloomberg)

  While India is investing more in clean power, it is still heavily reliant on fossil fuels. One of the biggest challenges that the country faces in deploying clean power is theft; many customers can’t pay their bills on time which leaves firms to bleed money that they could invest in grid upgrades and transmission.

• Green credits split Republicans (E&E News)

  A growing number of Republicans are speaking out in favor of some of the green tax credits in the Inflation Reduction Act, which is splitting the party amid a budget fight.

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