AI Data Centers Pose Unprecedented Power Challenges

Andreas Schierenbeck, CEO of Hitachi Energy, has raised urgent concerns about the impact of artificial intelligence on global power infrastructure. In an interview with the Financial Times, the head of the world's largest transformer manufacturer warned that AI data centers create power demand fluctuations unlike any other industry.

Image source note: The image was generated by AI, and the image licensing service provider is Midjourney

The Volatility Problem

Schierenbeck explained that when AI algorithms begin processing data, power demand can spike tenfold within seconds. This extreme volatility contrasts sharply with traditional office data centers, which maintain relatively stable consumption patterns.

"No other industry would be allowed to use electricity so unstably," Schierenbeck noted, drawing parallels to smelters that must notify power companies before operations. He urged governments to implement similar regulations for data centers to ensure grid stability.

Projected Consumption Growth

The International Energy Agency predicts data center power consumption will double by 2030, reaching 945 terawatt-hours annually—more than Japan's current total electricity usage. This projection has already prompted countries like Ireland and the Netherlands to restrict new data center development.

Potential Solutions Emerge

Analysts suggest tech companies could mitigate grid impacts by:

• Setting maximum power limits
• Scheduling intensive training during periods of abundant renewable energy
• Implementing smarter load management systems

Such measures might allow AI's power demand to actually help stabilize grids rather than disrupt them.

Transformer Shortage Crisis

Hitachi Energy, formed after ABB Power Grids' acquisition in 2020, faces a global transformer shortage expected to last three years. The company's order backlog has skyrocketed from $14 billion to $43 billion in just three years.

The shortage stems partly from:

• Limited specialized contractors for massive transformer production (some units weigh hundreds of tons)
• Slow factory expansion timelines
• Surging demand from power companies and grid operators

Expansion Plans Underway

To address these challenges, Hitachi Energy plans to:

• Invest $6 billion by 2027 in capacity expansion
• Hire 15,000 new employees
• Leverage talent from shrinking automotive and chemical industries

The company expects strong recruitment potential in Europe where industrial sector layoffs are creating pools of available engineering talent.

Key Points:

⚡️ AI data centers cause extreme power fluctuations, requiring government intervention 🌍 Data center consumption may double by 2030, exceeding Japan's current usage 🏭 $6 billion investment planned to address transformer shortages 🔌 Smart scheduling could turn AI into a grid stabilizer rather than disruptor