A new coalition of tech firms, including Google and Tesla, is banding together to address the growing issue of energy affordability in the United States. The AI boom is pushing energy grids around the country to the max, and skyrocketing energy demand from the data centers that power large language models is causing energy prices to soar. Until now, consumers have had to pay the price for Big Tech’s AI ambitions, but the coalition – called Utilize – is pledging to lower energy prices across the board by optimizing grid utilization.
“We recognize that there’s a need to prioritize affordability and do so in a way that really empowers states to make the best decisions,” Ian Magruder, Utilize’s executive director, was quoted in an Axios report this week.
The coalition boldly claims that by utilizing the grid more efficiently, consumers in the United States can save over $100 billion over the next decade. The group argues that the grid is designed to accommodate peak-demand hours that occur just a handful of times per year, and that the rest of the time, all of that capacity is sitting unused, and therefore wasted. In fact, a study from Stanford University found that transmission lines in the U.S. were using just 52% of their transmission capacity even at peak hours. Most of the time, they were running at around 30% capacity. This results in consumers paying more per kilowatt-hour than is strictly necessary.
“Battery storage and distributed energy resources are already demonstrating how smarter use of the grid can improve affordability,” says Colby Hastings, Senior Director of Residential Energy at Tesla.
Improving grid utilization would be beneficial for Big Tech in multiple ways. It would ease the pressure of finding sufficient new energy sources to allow the energy-hungry AI sector to continue its rapid buildout and lessen the need for expensive and slow grid expansions. “Unlocking idle grid capacity would let companies like Google connect new loads faster without waiting years for new transmission lines and generation to be built,” reports Electrek.
It would also be beneficial for consumers. “We’ve spent decades building grid infrastructure for peak demand that occurs a handful of hours per year, and consumers pay for all of it year-round,” the Electrek report goes on to say. “If distributed resources like battery storage and virtual power plants can shave those peaks and fill those valleys, the math on electricity costs changes significantly.”
