AI Explosion Requires Large Electricity, China Prepares Green and Nuclear Energy

Illustration of artificial intelligence. The development of AI in China has led to a surge in electricity demand for data centers and computing infrastructure. Illustration photo: Pexels.

JAKARTA - The development of artificial intelligence has triggered a surge in electricity demand and made energy supply one of the determinants of data center development. China is considered to have a large capital because it is supported by an electricity network, renewable energy, and nuclear power development.

China Daily, quoted on Friday, July 23, said that a strong electrical system and a strategy to connect the computing center with energy sources gave China an advantage in building AI infrastructure.

Former Vice Chairman of the Chinese Association of Science and Technology Zhang Qin said that the development of AI is driving a large amount of energy demand.

"AI creates an exploding demand for energy. The solution lies in a safe, reliable, and environmentally friendly electricity supply. China has great strength in that area," said Zhang.

According to Zhang, solar and wind power are not the only options. Nuclear energy can also supply electricity for data centers as long as its safety aspects are guaranteed.

This need is increasing along with China's rapid AI industry. China's Ministry of Industry and Information Technology recorded the value of the core AI industry exceeding 1.2 trillion yuan or about 177 billion US dollars last year.

The industry has grown by more than 20 percent per year for several consecutive years. In the first half of this year, production of AI-related sectors, including integrated circuits and smart devices for vehicles, rose by more than 30 percent compared to the same period last year.

CNNC Hainan Nuclear Power Co Chairman Wei Zhigang said the soaring computing needs have made clear the main obstacles to AI development.

"The limit is finally clear, namely the need for large and stable electricity supply," he said.

Technology companies such as Microsoft and Google are beginning to explore the use of small modular reactors, or SMRs, to power AI data centers.

SMRs are smaller nuclear reactors with more flexible placement.

CNNC is completing Linglong One, which it calls the world's first commercial land-based SMR. The company is targeting the reactor to begin commercial operation by the end of this year.

According to Wei, SMR can be placed near the computing center so that the electricity supply is easier to adjust to the needs.

Pangoal Zhou Ji senior researcher believes that China's energy advantage lies in scale, structure, and systems. China leads the world's electricity production, has the largest new energy capacity, and operates an ultra-high voltage network to flow electricity between regions.

The electricity needs of data centers remain a challenge. The Energy and Environmental Policy Research Center of the Beijing Institute of Technology estimates that China's data center electricity consumption will reach 525.76 billion kilowatt-hours by 2030.

This amount is equivalent to 4.8 percent of the total national electricity consumption.

Similar pressure is starting to be felt in the United States. Reuters reported that the growth of data centers of technology companies is also driving industrial electricity bills in the Rust Belt region.

Belden Brick Co in Ohio recorded a 90 percent jump in electricity costs last year. Reuters said the increase was mainly driven by increased demand for electricity from data centers in the region.

Head of China's National Energy Administration Wang Hongzhi said China plans to invest more than 20 trillion yuan in major energy projects and new sectors.

The national computing center will be connected to a large renewable energy area in the western region. The government is also developing distributed power plants, micro-grid networks, and virtual power plants to meet computing needs in the region.

Virtual power plants connect various small and scattered energy sources, such as solar panels and electric vehicle chargers, and then manage them as one system.

GCL Group Chief Sustainability Officer Song Yunbo said more than a third of China's electricity already comes from renewable energy. According to Song, the energy surplus makes China suitable for testing various AI-based applications.

Yingli Group Chairman Miao Qing said China has built more than 530 virtual power plants. The system combines renewable energy, electricity storage, and load that can be regulated so that supply follows changes in demand and electricity prices.