I'm working through what I saw, heard, and learned at New York Climate Week. This is the first of a multi-part series. See the end of this newsletter for a quick aside on what Climate Week is like.
Last week, I led with AI, because that's basically what's on everyone's mind, for better or worse. Today we're going to talk about the related topic: energy.
Is this a datacenter thing? Well, yes and no. I mean, we know that datacenters require an absolutely insane amount of energy to operate. So much so that they're reopening long-shuttered nuclear power plants or firing up diesel generators to keep things running (generators that may or may not be legal, or spill vast amounts of diesel into the environment). Reportedly, datacenters make up 80% of the predicted new power demand in North Carolina through 2030.
But we're also striving for widespread electrification of everything from vehicles to appliances to transition away from fossil fuels.
But what the rush to power the hyperscale datacenters has done is reveal the messy, aging U.S. electric grid infrastructure. One speaker referenced the fact that large portions of New York state were operating on equipment that hadn't been updated in more than 60 years. For reference, most of the grid infrastructure in Europe has been updated within the last 15 years.
Uhhhh... that sounds bad. That's because it is.
One of the advantages of adding clean energy — solar, wind, geothermal, etc. — is that those additions bring along grid updates for connectivity. These grid updates are expensive, but necessary.
On the other hand, the quick energy sources — reopening old coal plants, for example — just require firing up what already exists. This does nothing for moving the grid forward and building resilience.
So what's being done? The debate is really between momentum and readiness, and AI is the driving force.
Momentum advocates look at this like the space race of the 1960s. We need to rush forward in an effort to force the infrastructure to catch up. That growth "pays for the grid" (a phrase oft-repeated), but no one seems to be answering who pays. Readiness advocates think that we should build out resilient systems that accommodate current needs before adding on more demand.
And then there's BeYONCE. No, not her.
Bring Your Own New Clean Energy. Want to build a new datacenter? BeYONCE. This would require data centers to produce their own renewable power and add additional renewable energy to the grid at the same time. This solves the problem of funding grid infrastructure upgrades, and also minimizes the carbon emissions of the datacenters.
But... even if a datacenter follows the BeYONCE approach, and operates primarily on clean energy, they will still have diesel backups to ensure constant uptime. How much will those generators be used, and when?
That's not clear. Obviously if the datacenter is prioritized on the grid as an essential service (like a hospital, for example), they will use the generators less. However, that means that there's less energy available for other homes and businesses. If the community is prioritized over the datacenter, then the generators will kick on more frequently, and often during "Spare the Air" conditions where we want to minimize emissions.
What about nuclear? Eh, that's not as clear-cut as they make it seem. There's a lot of talk about small modular reactors to just power datacenter infrastructure. But as of three months ago there are precisely zero small modular nuclear reactor projects currently under construction in the U.S. So that's not an actual, active solution.
So what's the answer? I suspect that if I had the answer to this, I would have Muskwealth. And I do not have Muskwealth.
Tune in next week when I talk about other themes in climate week, many of which are relevant to just being a human in 2026.
What is Climate Week? It's a massive, decentralized set of events happening in New York City in conjunction with the U.N. General Assembly meeting, so the city is simultaneously clogged with motorcade diplomats and NGOs heading to the United Nations building, and reportedly 100,000 Climate Week attendees. Events are held by every type of organization imaginable, covering grassroots movements, climate tech startups, Big 5 consulting firms, and loads of Wall Street finance. My interests generally lean towards consulting and finance because they see where the money is going. Unsurprisingly, everything follows the money.