In a recent interview with CNBC, the CEO of electric provider AES Corporation (NASDAQ:AESI), Andrés Gluski, expressed skepticism about the future of nuclear energy as a primary power source for power-hungry data centers. Gluski’s comments come at a time when there’s a growing debate about the best solutions for powering the world’s data centers, which are increasingly vital in our digital age.
The Limitations of Nuclear
Gluski pointed out that while nuclear power is often touted for its reliability and carbon-free footprint, it has significant shortcomings. He noted that there’s only so much excess nuclear energy available to be re-contracted for new projects, including data centers. Moreover, the construction of new nuclear plants is fraught with issues such as high cost overruns, long delays, and extended lead times. The recent completion of the Vogtle Plant in Georgia, which was seven years behind schedule and cost double the original budget, serves as a realistic reminder of these challenges.
The Promise of Renewables
The AES CEO is more optimistic about the potential of renewable energy sources like solar and wind power. Gluski highlighted the recent agreement between Microsoft (NASDAQ:MSFT) and Brookfield Asset Management (NYSE:BAM) for 10.5 gigawatts of renewable energy as a sign of the growing trend toward renewable energy. He believes that while natural gas will still play a role as a transition fuel, the bulk of future energy needs will be met by renewables.
The Role of Natural Gas
While acknowledging the sustainable role of natural gas in the energy mix, Gluski emphasized that it’s not the long-term solution. He pointed out that battery prices are coming down and that there is a significant amount of storage waiting to be connected to the grid. This suggests that with the right infrastructure, renewable energy can be a viable option even when the sun isn’t shining or the wind isn’t blowing.
Commitment to Renewable Energy
AES Corporation, a major power provider for tech giants like Amazon (NASDAQ:AMZN), Microsoft, and Alphabet (NASDAQ:GOOGL), is already making significant strides in the transition to renewable energy. This gives the CEO credibility in his pushback against the “nuclear is the ultimate solution” narrative. The company has signed agreements to provide these tech giants with a combined total of 5.6 gigawatts of power from renewable sources.
Key Takeaway
In summary, while the debate over the best power source for data centers continues, AES Corporation’s CEO Andrés Gluski stands firmly in favor of renewable energy. Highlighting the limits of nuclear power and the promise of renewables, Gluski’s vision fits with AES’s shift to green energy. With key deals already in place, AES is set to lead the way towards a more sustainable energy future.
