Direct Air Capture (DAC) -- Every Time You Turn Around -- We Find More Demand For Electricity (Coal, Natural Gas) -- November 27, 2024

Locator: 44438DAC.

Large data centers are killing other start-ups. Not enough electricity to go around and promoters of large data centers have deep pockets to sign long-term contracts.

From Bloomberg:

Artificial intelligence data centers need so much clean energy that nascent industries trying to buy carbon-free power just can’t compete.

A case in point is direct air capture, a technology that sucks carbon dioxide out of the atmosphere. Earlier this year, the company building the largest DAC project in the US scrapped plans for the Wyoming facility, bemoaning the battle to get electricity to run it.

“We’ve seen growing competition for clean power amongst industries that are emerging much faster than anybody would have ever predicted,” Adrian Corless, chief executive officer of CarbonCapture Inc., said at the time. The firm will now try to relocate the project to another state.

The company said it had been in talks with PacifiCorp’s Rocky Mountain Power for years to secure energy. [Owned by Warren Buffett's Berkshire Hathaway.]

Only recently did the utility say there was no longer a spot available in its interconnection queue.

“I’m not going to totally blame them,” Patricia Loria, CarbonCapture’s head of business development, said in an interview. Large data centers, known as hyperscalers, are better-funded and able to sign long-term agreements, she said.

By contrast, CarbonCapture is a startup working on a novel technology with no guarantee of success.

PacifiCorp said it’s “seen a significant increase in load requests from large customers” but insisted “we treat all customers fairly.”

The US Energy Department and companies such as Occidental Petroleum Corp. and BlackRock Inc. are planning to spend billions of dollars to scale up DAC. But it’s becoming clear there isn’t enough clean electricity for the technology — a notoriously energy-intensive process — on today’s grid, especially now that AI is on the scene.

Stymieing direct air capture is a setback for global climate efforts. Scientists estimate we’ll need to remove billions of tons of CO2 from the atmosphere annually by midcentury to meet the Paris Agreement’s goal of keeping global warming to 1.5C or 2C.

“If energy systems stay the way they are today, then there’s no way we can meet 1.5C,” Loria said.