The term “energy transition” might conjure up an image of steady technological change, with grids gradually replacing carbon-emitting fossil fuel plants with more sustainable renewables. But this narrative of a straight swap only tells half of the story. The other part of the energy transition phenomenon is the expansion of energy demand, on a massive scale.
Even as countries rapidly decarbonize their grids, the world’s electricity demand is growing sharply. Global power demand is expected to double by 2040, driven by population and economic growth, widespread electrification, and a boom in the energy-hungry data centers that power artificial intelligence (AI), among other contributors. In fact, Maví Zingoni, the chief executive of the Power Segment at GE Vernova, believes that these factors are fueling a “multi-decade super cycle” whose impact on our lives and economies is like that of the industrial and digital revolutions.
GE Vernova, which boasts approximately 55,000 wind turbines and 7,000 gas turbines in its technology base and helps generate around 25% of the world’s electricity, is not shying away from this formidable challenge, but leaning into it. “This super cycle creates the right environment to fulfill our responsibility of transforming the system to help ensure the security of supply, keep up with growing demand, and decarbonize power,” Zingoni told delegates at ADIPEC 2024 in Abu Dhabi last week.
The size and length of this super cycle requires GE Vernova to think strategically, playing both a short and long game, said Zingoni. She cited the near-term role of hydropower, nuclear plants, and natural gas in providing dispatchable and affordable power, and “firming the grid” to allow the integration of more wind and solar. Grids should also leverage cutting-edge digital tools that allow them to smoothly manage the growing complexity of renewables-rich networks, she added.
Zingoni explained how GE Vernova is also looking to the future, with an intent to invest around $1 billion per year in research and development (R&D), focused on carbon capture technology, hydrogen-ready gas turbines, and small modular reactors (SMRs), among other breakthrough technologies. “While we make real progress with the technologies that we have today, we are also working on the ones that will be critical in the next decade and beyond.”
A Juggling Act?
AI and the internet are set to be one of the driving forces of this super cycle. The average generative AI query requires almost 10 times as much power to process as a regular web search, while Goldman Sachs has forecast that global data center power demand is set to grow by up to 160% by the end of the decade. “The reality is that, even without AI, energy use from these facilities could double by the end of the decade,” she added, citing streaming services, data storage, payment processing, and business management systems, among other factors.
There’s an extra complexity: This “Age of Electricity” is dawning well before the sun sets on fossil fuels. For example, there is still around 800 gigawatts of coal-fired power capacity running today, excluding China. It will require massive financing to replace those fossil fuels. The International Energy Agency (IEA) estimates that investment in “clean” energy must reach $4.5 trillion per year by 2030 to limit warming to 1.5° Celsius.
Meanwhile, GE Vernova cannot take its eye off of the need for energy security and availability. Zingoni said that more than 750 million people still lack access to reliable electricity. The COVID-19 pandemic and geopolitical instabilities have also exposed the vulnerabilities of global supply chains. “As an industry, we almost need to reinvent ourselves to balance this growth and energy security with reliability, affordability, and sustainability,” explained the executive.
Zingoni conceded that the landscape looks daunting. “Growth can be scary for some, because they feel it will slow the energy transition. To the contrary, growth can be a catalyst to decarbonization,” she said. “It creates incentives to accelerate innovations like SMR or carbon capture technologies, and a better chance to industrialize them at scale faster, building the supply chain to solve the problem.”
All of the Above
GE Vernova can seize this opportunity by taking an “all-of-the-above approach” as it plays the short and long games, according to Zingoni. She outlined a clear role for natural gas with a pathway to reduce gas plant emissions via carbon capture, utilization, and storage (CCUS) solutions, direct air capture (DAC) technologies, and lower-carbon fuels. Gas can be a “force multiplier” for the further and faster deployment of renewables like wind, explained the executive, adding that SMRs are expected to come to the fore in the 2030s.
In fact, Zingoni said that nuclear power was experiencing something of a renaissance. “Last year, during COP28 in Dubai, we had 20-plus heads of state talking about tripling nuclear capacity between now and 2050,” she explained. She also pointed to announcements by big tech companies about harnessing nuclear for computing power, while living up to their commitments to shrink their carbon footprints.
She underlined the necessity of expanding and upgrading the grid to seamlessly absorb hundreds of additional gigawatts and thousands of new nodes. “Traditional grid management of transporting electrons unidirectionally is no longer adequate,” she said. “We need to embrace grid orchestration to better manage this complexity, foster interconnections, leverage data at exponential scale, and make better real-time decisions under uncertainty.”
Collaboration between research institutions, manufacturers, utilities and developers, the financial community, and policymakers will be key to delivery, said the executive. “Our biggest collective barrier is not technology; it’s fragmented action and uncoordinated efforts. An all-of-the-above approach needs collaborative, all-of-us actions,” Zingoni added.
“But also on this front, I declare myself an optimist,” added Zingoni. “I believe we will do it.”
Hear more from Maví Zingoni in this episode of the Cutting Carbon podcast, ”A Duty to Maintain: The Energy Behind GE Vernova's Power Businesses”:
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