away. The largest offshore windfarm spans over 450 sq km located off the coast of England and is 200 km away from the nearest large city. Needless to say, our energy system is going to become a lot more cable intensive.
Cables can represent up to 25 % of the total cost of an offshore wind farm, a boon for cable makers like Prysmian, one of only three western companies capable of making and laying high voltage undersea cables –. Cable interconnections also come in handy when the system needs to import power to fill in gaps. Most evening, California imports around a quarter of its power from neighbouring states that burn more gas, and on most days, the UK gets a tenth of its power from France’ s ample nuclear fleet.
Wind and solar may be temperamental, but other stars are even more demanding. Electricity demand is being accelerated by reshoring, electric vehicles and more recently AI data centres. Mark Zuckerberg has said that energy, not data and chips, is likely to prove to be the bottleneck when it comes to the rollout of AI. Growth in data centres alone is expected to add 2 % per annum to total global electricity usage. That’ s as much as all the electricity used by the entire country of Japan.
That energy has to come from somewhere, and it has to be reliable.
Nuclear is best where it’ s available, but where it isn’ t, gas is again a reliable producer. The world currently builds about 100 large gas plants a year, and increased demand for data centres could add another 30 to that. Again, this could be good news for the crew members like Siemens Energy who produce the gas turbines, Shell who produces and transports the liquified natural gas, and Kinder Morgan who operates the largest natural gas pipeline network in North America.
But energy alone isn’ t sufficient, as Northern Virginia, the world’ s largest data centre hub, can attest. Even when power is adequate, new data centres need to wait to connect to the grid, because the lead time for transformers currently stretches to over two years. That should ensure steady work for leading makers of transformers and substation equipment, like Siemens Energy.
The ongoing changes to our energy system is a production that will see more power travelling greater distances and in more directions. While the energy transition serves as a healthy tailwind for our backstage crew, that’ s only part of the story.
When old equipment fails, the consequences can be disastrous leading to wildfires, load shedding and blackouts.
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54 | The Adviser