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THE FRONTIER LINE
Hosts Wayne Aston and David Murray explore the critical global pillars of infrastructure development and energy production, from traditional methods to future-forward advancements. The Frontier Line covers the latest industry news, energy innovations, and sustainability trends that are shaping the future. Through expert interviews with industry leaders in renewable energy, utility-scale battery storage, and waste-to-energy technologies, the podcast provides insights into the evolving landscape of energy efficiency and sustainable infrastructure. By focusing on the intersection of innovation and the politics of energy, The Frontier Line highlights transformative ideas and technologies poised to deliver cost-efficient, resilient, and sustainable solutions for global industries.
THE FRONTIER LINE
Schneider Electric & Stream Data Centers, Responsible Economic Development in Rural America,
Can the data center industry keep up with the skyrocketing demands of AI technology? Unravel this complex narrative as we dissect the strategic partnership between Schneider Electric and Stream Data Centers, aimed at crafting sustainable tech solutions for high-density AI workloads. Listen as we tackle emerging challenges like power shortages, supply chain issues, and construction hurdles, particularly on the East Coast where local regulations and utility companies throw additional obstacles into the mix.
Explore the multifaceted growth of rural communities by examining Meta's data center expansion in Eagle Mountain, Utah. We delve into the delicate balance of nurturing economic opportunities while preserving community resources. Through private-public partnerships and strategic planning, small-town leaders are not just coping with development pressures but turning them into opportunities by adopting innovative solutions like water recycling and infrastructure financing—ensuring local communities thrive without losing their identity.
Discover the transformative potential of opportunity zones in rural areas and how they have revitalized regions like Salt Lake City by spurring vibrant economic activity. With a staggering $45 billion investment in clean energy and grid reliability, we analyze the urgent need for infrastructure upgrades and the global challenges this rapid growth entails. As we wrap up the episode, we contemplate the future of technological change, drawing lessons from the past to envision a better digital future. Join us on this journey as we navigate the intricacies of modern technological growth and its far-reaching implications.
Well, hello and welcome to this episode of the Frontier Line. Hello Wayne, hey brother Dave.
Speaker 2:Hey, how are we today? I'm so good, excellent, excellent, still good, so good, still glowing, so absolutely good, absolutely Well, last time we did a, you know we've done well last time last time, as far as we're concerned, maybe you know.
Speaker 1:If you're not listening in order, then well then, who knows what we're talking about? Last time we did. You know we've done well last time Last time as far as we're concerned. Maybe you know if you're not listening in order then.
Speaker 1:Well then, who knows what we're talking about? Last time For us, we've been talking about headlines, a lot of headlines, a lot of implications post-election, and what the world is going to look like, what everybody's going to prognosticate Okay, what does this mean for you know my particular space? What everybody's going to prognosticate okay, what does this mean for my particular space? What's going to happen? What are we going to do? How are things going to go? And so, in keeping in that vein, I think, looking at some of the things that are currently going on just in the headline space, and kind of, as we see this again, as we see this market develop out for high power, for data centers, this whole landscape that we talk about, what's the latest and greatest, and so one of the things I came across and it's somebody with a group we work with, we've talked to and they're a fantastic group, just incredibly educated on this, I mean hugely experienced there, you know they're. They go back what is a hundred years, I think, is when they had 18, late 18, over a hundred years.
Speaker 1:So this is a group, who, who, who's been doing this a long time and who we've looked to for some answers and some advice, and and we'll continue to do so and that's Schneider Electric. And and it actually popped up on a news site, but it's out of their blog and it was the article's meeting, or the post, is Meeting Data Center Capacity Demand in the New AI World. So if you've been listening to our podcast, you'll know we talk about this all the time. This is some news here and it's really good, so I'll read a little bit here and we can talk about it. So this is from and I'm probably going to get the name wrong Vandana Singh. I'm proud to share that Schneider Electric has entered a strategic partnership with Stream Data Centers to help them serve their customers and support their exponential growth in our ever-changing industry. It takes true collaboration to deliver with agility and velocity, whilst operating in a capacity-constrained environment. Stream and Schneider are true partners, invested not only in future capacity planning, but also in developing solutions that will power the future data center landscape. Based on Stream's customer needs, schneider creates purpose-built and sustainable technology to support high-density AI workloads and digitize their platforms to provide best-in-class monitoring capabilities. That was a mouthful In its recent Worldwide Data Center Co-location Market Report, research and Markets emphasizes that power availability and supply chain constraints still daunt the data center market.
Speaker 1:I would say still is an understatement. Um causing the construction timelines to grow from an average of 18 months to around 30 months, coupled with the supply chain constraints or rising construction costs, reported increases around 20 to 30% across key locations worldwide, creating an unpredictable and unstable market for many co-location data center providers throughout the world. When it comes to adapting to these unpredictable market conditions, stream Data Center is a company that has delivered 26 facilities, leases 90% of its capacity to the Fortune 100, is ahead of the curve. Stream is a team of experts who deal with all these things, and it goes on and on and on and they talk about, just again, the landscape of this space and it. What it, what I think illustrates is maybe is the it's. It's such a complex space, there's so many moving parts to this, and then you add to it the current election cycle, which is also going to throw chaos, not necessarily in a bad way or a good way, it's just unpredictable. No one knows what this is going to mean necessarily.
Speaker 1:There have been obviously statements. What is it going to mean for energy production costs. What are we doing? Are there going to be things rolled back as far as obstacles maybe that were in place regarding policies, all of that stuff? What does this mean? Because it is a complex market. When you're talking about all the energy or all the utilities across different states and just in the US not to mention outside the US, but just in the US you talk about local communities and what they want to do, what local maybe laws or restrictions or incentives are going to be in place.
Speaker 1:It's a complex space and companies like Schneider and obviously Stream Data Centers and then everyone else, are trying to thread those needles and trying to just solve the base problem, which is more power, more power for more data centers. And the only way we're going to expand AI in a meaningful way is to expand power and, as we've talked about and we will continue to talk about, it's not an easy lift. The grid is brittle, the grid's not as connected as we would want it. There are lots of little fiefdoms that don't want certain things.
Speaker 1:I think our last episode we talked about how, on the East Coast, the big utility out there is really getting in the way of interconnected agreements and really stymieing growth, for their reasons, I suppose, and I could guess and we can speculate. So this is a really difficult landscape and it's just going to get that much more. So I mean, you're hearing this, you're seeing this. What are you? I mean, what do you think like if you are, if you're Schneider, you're us or you're somebody? Do we all see the same things? What are the biggest obstacles right now?
Speaker 2:Yeah, I think you hit the nail on the head, dave. I think everyone will agree right now that power is driving this and there have been waves where you know, in wave one this wasn't a concern. Wave two you know data center developers and operators were doing. You know, site selecting based on, you know, a lot of factors, not necessarily including availability of power. And now we're seeing co-location is the term, co-locating those data centers with power.
Speaker 2:I'm really excited to see Schneider Electric so active in the market. They are a juggernaut in the market. They are the authority globally in electrical components and advancement in the space advanced liquid cooling. You know components and advancement in the space advanced liquid cooling, advanced AI, power management, smart microgrids EPC, full EPC contractor on smart microgrids. I mean, schneider is a juggernaut and we just covered their acquisition of Motivair just a couple of weeks ago $850 million acquisition for their advanced liquid cooling.
Speaker 2:This is exciting to see a financial partnership, a true partnership, with Schneider joining forces with Stream Data Centers. Stream's a great company. They have a track record dating back to 1999. They have been through all of these evolutions of data centers, tier one to tier four. If we got to interview or meet with the guys at Stream. I can almost guarantee their mind is thinking about Tier 5. How do we pioneer the Tier 5? We want to be a part.
Speaker 2:They've got a good, solid track record. That's why Snyder is partnering with them. I see opportunity for us to work with companies like that because they have a good finger on the pulse of the data center market as its own market on one hand. On the other hand, they're not power developers. That's maybe the hardest part Develop power. Work through the regulatory environments in every jurisdiction. That's where all the money in the world doesn't solve the problem. It's relationships that are going to solve these problems. Boots on the ground relationships and spread out all over the place. Decentralized power production enables groups like Stream and Schneider to do what they do, so I think it's all very positive.
Speaker 1:And I think you hit on a good point, which is the importance of relationships. We talk about these big, global, almost instrumental problems and it all comes back back at the end of the day, to get some of these things done, you've got to have the relationship. So my relationships that doesn't mean, hey, I've just met somebody. It means I've met somebody, we've worked with them. They'll listen to me, we know how to work together. I'm listening to them. That's stuff that money doesn't I mean money can buy you access to certain things. Obviously. It's why the lobbying industry is fairly big. Obviously, you need you know in the world, you need people to be able to open up those doors so you can have those conversations. At the same time, they've got to believe that they're having the conversations with the right people and especially when you're dealing in rural America, in our experience, I think it would be like they've got to sit down with you across the table and say do I believe this person? Are they going to do what they say they're going to do and are they going to come in and leave us? Hey, what's going to end up happening? They've got to see that you're invested in the community, like they're invested in the community and that, at the end of the day, is not easy to solve. You can't just snap your fingers and solve that. And we're seeing I mean I'm seeing there were some headlines. I mean one I read this morning where there was a data center campus back east somewhere. It was like 2,300 acres and the community is in an uproar right now and communities, they are actually having to pivot and scale down because the community is saying no, we don't want it. It'd be interesting to see how did that all come about? Did they, did they work with community from the get go? What was this? Does the community truly understand what it is? Are they, you know, biting off more than you? All those things? We're going to see this. We're going to see communities that are open arms and saying, yes, please come here, but we're going to. You know, we're here. The here are the guardrails that need you to work with us and and companies that are just saying we're just going to come in because we can and we're going to do this, and then running into problems. Again, it comes back to meaningful, real relationships and meeting and talking and finding the advocates in those areas that that maybe find the vision, because another thing we've run into and we see is that not everybody's going to be on the same page and a lot of the reasons that people love rural America is because it's rural.
Speaker 1:But I think on our last episode you mentioned and it's this thing we've heard time and time and time again is that their biggest exports as a community are their kids. Their kids are going away. They're growing up, loving how they grew up. They're moving away and never coming back and these communities are dying because there are no meaningful and also quote unquote meaningful opportunities for them to pursue any varied careers in those communities. They just can't sustain it.
Speaker 1:And so the rural communities are finding especially some of the leadership like, look, we love our communities, we're going to have to change with the times, but we can control how we grow. And those are the more I guess forward thinking, saying, yeah, we want growth, we want to help control and steer the growth. We don't want it to be unchecked, but we realize, in order to evolve and stay who we are and kind of maintain that, that identity, it, you know, we need to work with states and developers and all these people to make sure that we, we, you know, we can take advantage of it, but then also not be overrun by it. Yeah, and it all comes back to relationships.
Speaker 2:A hundred percent, a hundred percent. I, as you, as you're talking about this. To me, this is a conversation about the highest and best good of the community. So it isn't always the highest and best good to just build millions of square feet of data centers that consume all the water and power out of a community. That's not what we're saying, and we could look at Met as an example in eagle mountain utah okay, eagle mountain is, I wouldn't necessarily call that ultra rural like some of the communities we're in, but it used to be.
Speaker 1:It was it was before meta pretty pretty darn rural.
Speaker 2:Yeah, if you drive out to eagle mountain depending on whether you're on the far west side of eagle mountain or on the edge of eagle Mountain on the east side or in Utah County boarding on Provo and Orem. There's a spectrum of rural classification here and it's interesting to know behind the scenes. Meta has built a massive data center out there. It continues with expansion plans. It's not co-located with power on site, it's connected to the city grid and the mayor is, you know, whispering on the wind out there. The mayor is scratching his head wondering where the heck they're going to get all their power now. How do we, how does this city continue to build new business and homes because meta is using all the power up. We don't know where we're going to get the rest of the power right. So now all of a sudden, eagle mountain city as a municipality is trying to solve power again because meta has gobbled it all up.
Speaker 1:I can only imagine what the water consumption situation is for eagle mountain right and I believe in, in I, you know, and that is, I think it's been an issue. I think one of the agreements and this is a working together is that they've uh, I think, if I remember correctly and somebody can let us know for correct or not is that the uh. They're uh recycling that water back to the local parks. I believe yes, so I think the waste water, yeah, is going back, so they're uh recycling that water back to the local parks?
Speaker 2:I believe, yes, so I think the waste water yeah, is going back.
Speaker 1:So they found a way to basically, okay, we're gonna use this, it's not gonna not gonna be for not instead of watering the parks with, maybe culinary or city water or even, yeah, uh, that it would be. You know, we we've got this and we'll use it this way, which is obviously good, so it's a good co-solution, yeah yeah, it's a much better solution than than not having any public benefit, right?
Speaker 2:um, it's maybe a cheaper solution than having a full closed loop water consumption, non-water situation or, um, which would be more expensive. A full water reclamation uh, you know system that would be much more expensive. So it. Full water reclamation uh, you know, system that would be much more expensive. So it's, it's on the spectrum, it's, it's positive, but it's interesting.
Speaker 1:If you were uh, you know, if you were a mayor in one of these small towns you know, mayor Wayne, and you know what would you, what would go through your head as you were talking to businesses and things. Let's just say you had a couple thousand people in the community and you know you're going, you know what. I've lived here my life and I want to see this community do well, what would, what would be going through your head as a mayor or as a politician right now in a community like that, if you had that opportunity of Wayneville?
Speaker 2:Yeah, I mean, it would be hard for me to take off the entrepreneurial half that that's glued on my head, first of all because my knee jerk to the question, dave, is well, I would see this massive opportunity knocking on my door and I would now. Now, how can I manage that growth without collapsing the rest of the economy within that municipality, right, how can I bring on these big businesses? Well, I think it has to do with private-public partnership. I think there has to be a coopetition mentality and if I'm the mayor, I've got a real opportunity to create a legacy for this community and make real change. But I know that I'm going to be cultivating relationships with private sector businesses and then I'm going to be holding the, the, the, the strings, the controls in my hand tightly on what we approve through the city council, municipal approvals. I'm going to be saying, okay, what are we going to do about power? Can you expand our capacity? Can you expand our capacity without us having to pay for it, without taxing the school district and the fire department and the police department, for example? Right, can we accomplish that? Okay, that's great. So public sector is going to shoulder that burden of power without taxing a community. That's a big deal.
Speaker 2:Next is going to be probably water. Okay, how are we solving for water? Well, you got to be able to probably be able to expand our water capacity. Because we don't have capacity for you, because if I approve this, this operation, it's billions of gallons a year and I have to look at the, the cause and effect of that. That. How many homes are we not going to be able to approve for our community to expand responsibly if I approve this behemoth of a facility?
Speaker 2:So there's scale, there's conversations of scale and trade-offs and that spirit of coopetition. I'd be leveraging private businesses into these partnership arrangements to help solve the problems that I can't solve. On the tax base budget, I've got, as the mayor, right, because my, my town's only got less than 10,000 residents right and that tax base doesn't support me expanding water, expanding my infrastructure, expanding new power production and the grid and all of that stuff. So if I'm the mayor and I can see things clearly and business comes knocking at my door, that's an honor. By the way, that they would want to be in my community right and not on the Wasatch Front where all the action is. So you know it's a. There'd be a tempered approach to it all to avoid the sprawl, but make sure that my community gets the benefits out of it and I could lead my community to the future that they are hoping for, right.
Speaker 1:That makes makes. Look, it says Mayor Wayne, okay, mayor Wayne, it's got a good work too. Okay, yeah, mayor aston, right, so I well, and I think you know, uh, what we've seen too is what's interesting is that there are that. The question is is, especially some of these businesses is do they connect to a city or municipality system or do they bring their own? Yeah, you know byow bring your own water, like do they already have water, maybe that they can tap either below them or on their own? You know byow bring your own water like do they already have water? Maybe that they can tap either below them or on their own? You know that water, you know well.
Speaker 1:So there's all kinds of solutions, like and then working with them to say, look, city can't handle, I want you here. But here's how we can help you out, because you know you've got there's water rights there, or if you're, you know so. And so I mean saying, is there a way to solve this? Because we can't't, we can't. You know we can't take the burden of water or electricity on our shoulders, but we want you here. What are the options? What can I help you do to go find it so that you can work independent of us, because we'd love to see you here.
Speaker 2:Well, you know, here's another interesting twist, dave, I'll just throw this out there. And and it would take land developer mentality and understanding. If I'm the mayor, then and I don't think most mayors actually have this, but if they did, and I was the mayor then I made you the mayor. So see, on top of what I just shared, another thing if I'm the mayor, I would say look, you're going to have to develop infrastructure. It all comes at a cost. Are you going to pay for that privately or do you want to bond that? Can I help you structure mechanisms to help you bond the infrastructure?
Speaker 2:In Utah we've got PIDs. Pids are awesome because the developer can structure that public infrastructure district on the property on the project, isolate all that tax burden to future business enterprise in that district without harming my school district, my police department, my fire department, all the taxing authorities within my jurisdiction. That's really powerful. But it would take my approval and my cooperation with that private developer to structure that type of mechanism to help them get the ideal financing. And, by the way, I would also, as the mayor, be asking for certain things. Hey, you know what? It'd be nice if you'd build us a new rec center. It'd be nice if we got to expand our fire department. We need two new trucks. We need a ladder truck. Can you throw some dollars at that? I'd be negotiating all of it as a mayor and I would make sure that the community is getting what it needs and I will almost guarantee you any of the businesses we're talking about have the capacity financially to deliver those things I'd be asking for.
Speaker 1:You know again because we've talked about you know, certain costs and things.
Speaker 1:If you are in, if you choose to develop, to go into maybe a more rural area, the cost of just acquiring land in a metropolitan area is exorbitant, absolutely, and so and you could argue that you could maybe get the same output. So let's just say you're building a data center, among other things, and you build a one gigawatt data center. You build a one gigawatt data center in a metropolitan area. There are certain cost savings you're going to probably run into, maybe labor a little bit because you're going to have a bigger labor pool you can pull from perhaps, but you're still going to. At the end of the day, you're still going to be producing the same kind of thing. And if you can save, if it's a hundredth of a cost of the cost, yeah, truly, to go into a rural river, I mean, well, there's a lot of cost savings in there that you can then do those things of like. No, we can spend money to do this, to make this project work without, however, the community needs it to work.
Speaker 2:City needs a new sewer system, needs sewer system upgrades. Even though my new business doesn't necessarily bring that much new demand, the city needs it. I'm asking now. I'm asking them to help foot the bill to develop that type of upgrade, that type of infrastructure upgrade. There's a whole list of things and we can apply that to any community that we're dealing with that has a list of needs that could be resolved with a pragmatic, calculated, wise, cooperative, private-public partnership.
Speaker 1:And.
Speaker 2:I think that's honestly. That's where you're going to see some communities thrive and some will fail, because it'll land on the shoulders of those municipal authorities who either have the foresight for their communities to do what's truly in the best interest of the community, and there will be those who will want to protect and I say air quotes, protect the community and keep it small and keep it rural and keep it a thing Because of a fundamental misunderstanding of how long it will take to actually create that sprawl, or a fundamental misunderstanding of how fast things can move. You know rampant crime and drugs and all these things that they could potentially be scared about, fundamental misunderstandings. So that's going to be a major factor developing rural, let's say, middle America, main Street America that will be a differentiator what communities end up thriving.
Speaker 1:Do you think on that that? Do you think most of these communities because I, I don't know again, on some limited experience, I think it's been us bringing this idea or this type of solution in into the conversation that is opportunity zones. Oftentimes I don't know that they even know A they're in an opportunity zone, what it is, what it means. And if they did and this has been a conversation it's access to capital that didn't exist before, because it's capital. That's it's capital and you've got capital that says no, we will, you know the right kinds of things, we'll park it there for a decade, seven years, ten years, because of the benefit on the backside of this. So when I'm a community going, well, how do I? No one's going to invest, they might, and it's not because they're dumb at all, it's just there's so many mechanisms that they can't possibly keep in front of them.
Speaker 1:But every conversation we've had as soon as we brought that up is like, oh, I didn't know that was a possibility. I'm like, yeah, did you know that you're in an opportunity zone? Let's explain to you what that means in in reality. Reality is is that means that there there's access to capital that might not have existed before because there's a tax incentive on the back side of that capital, absolutely impressive, absolutely and so unprecedented, whereas capital before my went, ah, we're not putting capital, you know, we're not going to throw $10 million in that area because whatever. But if I can throw $10 million in the area and make a good bet to where the value is going to increase, and then and then my investment, you know anything that that improves over a basis after 10 years and they can take that out tax-free, that's a huge incentive and that opens up lots of different money channels and solutions that didn't exist before and I think we've run into that. They just didn't know it existed, those programs existed.
Speaker 2:Well, that's 100% why I think we've gone about site selection the way we have and working through solving the needs of rural communities. Rural USA is because federally designated opportunity zones are rural USA. They were designed to incentivize development in underserved communities. That's right. So that's the fundamental nature of why opportunity zones were even created in the first place. That's the fundamental nature of why opportunity zones were even created in the first place.
Speaker 2:I think that the communities that have those zones actually had to go through an approval process and accept it. And so in Utah, as an example, I'm aware of many opportunity zones in the state of Utah, of many opportunity zones in the state of Utah. I'm also aware of other rural communities that passed on the idea of obtaining that categorization and now they're shooting themselves. Now they're not shooting themselves. They shot themselves in the foot when they didn't accept it, but now they're regretting that they didn't accept it because they can't offer the same tax regime to bring new business. They everyone wants to. I think for the most part wants to see new growth and, you know, vitalization of the community.
Speaker 1:Um it's interesting. I. I mean, I think well, and I'll go very micro here in salt lake city, if you know, for people, listen, if you're not familiar, the green redistrict, oh, that was that's not. And here it is in a metropolitan area. If you know for people, listen, if you're not familiar, the green redistrict oh, that was that, that's not. And here it is in a metropolitan area, if you will, but it was a if you will, run down blighted area and yeah, it was designated.
Speaker 1:If you've been there in the last year oh yeah, versus five years ago, oh yeah, 10 years ago you want to see the impact of that kind of investing. Yeah, that's what's going on now. So you go down there on a weekend and now you've got bars and restaurants and all these great shops and all this local life down there, not to mention the residents that are. It's becoming its own community, tons of new people. That was the whole point. Absolutely that was the whole point. I mean it's a great success story to say that was what this was supposed to be about. It was to say, okay, we're going to incentivize capital investors to come into this market and invest in these kinds of projects, this kind of infrastructure, and the idea being is that, let's you know, can you build something that's really good? Well, what I'm seeing? I think anybody who's been down there is like this is a vibrant area and most people will go down there right now. If you went and asked anybody down there, they're like oh, this is what's happening.
Speaker 1:No, that was a plan put in place and it was on the heels of it being designated an opportunity zone period. End of story. Now I know Salt Lake City wanted to kind of deal with that area for a while, but when it had that designation, that's when you saw a lot of big capital come in and start to take advantage of this, and now everybody's enjoying it and going oh, this is fantastic, it didn't just happen overnight, this is planned, and you hit on that. It was planned because some people had some foresight to say, okay, this is going to work and again, staying micro. I have watched, you have watched. Anybody who's grown up in utah has watched our downtown evolve and develop significantly. It's gone through its ups, it's gone through its downs, absolutely. Uh, they put in tracks, it killed main street. You know, olympics lost me and now it's crazy. But ultimately that plan about development and revitalizing there were.
Speaker 1:There are opponents, undoubtedly. There are opponents, undoubtedly, but you look, that started in the nineties. Yeah, we're now 2024, ending almost the end of 2024. Yeah, 25 years ago plus, this is when that plan went into place. In 25 years later, look at where we are, yeah, so to go off on a tangent about how these things come into fruition and how it's going to take some thoughtful, mindful leadership to take advantage of these things, that was a complete tangent. On headlines, that's awesome. Let me get back to so. I know you've seen some headlines as well. What are you finding?
Speaker 2:Oh man, yeah, I've got one here from um utility divecom. Really interesting headline. Um excel energy unveils 45 billion dollar capital plan as data center pipeline nears nine gigawatts.
Speaker 1:Okay, what's interesting. We should have a tote board. I said we should be like, you know, a telephone, the jury itself. We should be doing a data center tote board because every every week I'm like wait a minute. Last week it was two, yeah it's just crazy.
Speaker 2:The numbers are staggering. The numbers are staggering. Every single power developer, power producer, utility, every, every single fund, every single, every one of the capital markets has got $5 billion to invest in this, or more $45 billion. What's interesting about the article, dave? And if I could just read some excerpts? The opening sentence really caught me, because load growth is only part of what's driving the increased investments and costs at Accel. According to the company's third quarter earnings presentation, accel Energy plans to invest $45 billion in new generation transmission and other projects over the next five years. So $45 billion in the next five years that's staggering. President and CEO Bob Frenzel says on Thursday. The company has received 8,900 megawatts of requests from data center companies, but economic growth is driving just 22% of the total five-year spend. Excel expects to secure just 25% of the projects in its data center pipeline over the next five years, leaving room for continued growth that can continue into the next decade.
Speaker 2:The surge in the insight on the article is a surge of load growth taking place across the country points to a need for utilities to move at a much faster pace than they have in the past. What you're seeing is obvious big demand across the country he says this is Bob Frizzell, and we know there's a double counting in a lot of people's inbound requests as these large loads come looking for transmission and generation service. But it highlights a different need, which is that we as a country, we as an industry, need to be accelerating our ability to develop both transmission and generation to serve the load that we think is going to come. And he makes a statistic here and I won't read the whole thing. But this final thought on the article For Accel that acceleration will, for the next five years, take the shape of $45 billion plan focused on four key areas clean energy, customer electrification, load growth and reliability.
Speaker 2:Transmission and distribution upgrades will claim 63% of that funding. According to the company's presentation, renewables and new generation projects will get 11% and 10% respectively. To me that was a very interesting thing. Transmission and distribution upgrades claim 63 percent of a 45 billion dollar budget. So what's your knee jerk to that?
Speaker 1:holy smokes. Uh, it was my knee jerk. It just shows you how, how bad our grid is. Yeah, because that's where most of the money's got to go. It's got to right, upgrades right. They can't just plug in that. That's a lot dedicated to just getting, you know, just redoing the grid around it, which talks to that fragility or or it not even existing, yeah, or the lack of a grid, or the lack of interconnection, or the lack of transmission.
Speaker 1:And that is, as you know, we know and talking to people, that's a interesting pipeline as far as supply and demand and and right now, and what, and how fast you can even get some of these base materials right. These component manufacturers, they are cranking and there's not enough. And you hear a story like this, you see a story like this, and this is one, and this is just here. And then you think about this on a worldwide scale. Every major country is facing this right now and they're all going. They're all looking at some of the same suppliers, the same manufacturers, saying, okay, we were going to need these things. That just shows you becoming becoming problem, which, on some side, you know why a lot of manufacturers are trying to expand manufacturing footprints as fast as they possibly can because they know it's coming. So this just underscores that.
Speaker 1:Point is that it's okay. We've recognized the problem. We've identified that we need power. We identified the grid is not what it needs to be, right, okay, now we need to go source this. Yep, now we're competing against the entire world right now for the same materials. Yeah Well, okay, get in line. And that is where this all starts to. I think. Slow down, that's. My concern is that that's at some point you hit a point where we don't have. We don't have enough stuff, we don't have enough stuff, we don't have enough materials, we can't build fast enough, which then changes everything anyway. But that's my gut reaction. What is yours when you?
Speaker 2:saw it, it's an overwhelming amount of money. I mean, we're now talking about trillions of dollars to be thrown at the collective conversation of power and data Just those two sectors, with all those moving parts and all the nuances. We've been talking about power ad nauseum of production, transmission, modernization, all the things. Data's the same thing. Data has so many nuances. I'm talking to different companies weekly. Data has so many nuances. I'm talking to different companies weekly about very small size data, data processing, data center solutions, massive ones everywhere along that spectrum. And I'm here to tell the listeners that money doesn't solve it all. There's plenty of money out there. It'd be interesting if all this demand was there and all the stuff was there and there was not enough money to make it happen. That's not what's happening. There's plenty of money. Everyone's throwing billions and billions of dollars at it and there's so many nuances, like this other article I was telling you about before we started in studio this morning about meta and the plan to develop their nuclear powered AI data center gets shut down because of endangered bees.
Speaker 1:It's got to be studied, so that was just done.
Speaker 2:Now that happens often in land development. Okay, happens often in land development, okay, so so when you get tech companies that are not developers entering into the space of developing these data centers, running into these environmental problems, bees is one endangered plants as another endangered species of all types, frogs, lizards, owls, I've heard it all, all, I've heard them all right. So money doesn't solve that. Okay, clearly you know meta, meta, unlimited, unlimited budget to build whatever, buy a nuclear power plant, sure, yeah, develop a mass, the world's largest data center right next to it.
Speaker 1:But for bees, that one little problem, it's a black somewhere, it's endangered right, right, how it come to a whole, and that no one on that's I mean what. So, on that, as a developer for so many years, should they have known about this before they went out and bought or like maybe done? Do you think they came out afterwards? Or it could have been like you know what we're gonna not not that it was insurmountable, but like we're going to possibly run into these problems, do you?
Speaker 1:think they should have had an idea that this might be an issue before it was.
Speaker 2:Absolutely. I mean, and I don't know.
Speaker 1:My point is that there's money like hey, we're just going to go buy it and do it without actually like, okay, is it feasible, and what is the likelihood that we're going to do this? What problems are going to run into?
Speaker 2:I'm not sure if META actually bought the land or not. If they were sensible and what we would do is we would go put the land under contract with a significant due diligence period we would order, a feasibility study and an environmental impact study, and we would identify that before we close on the land.
Speaker 2:Before I spend $80 million, $100 million, on a piece of property next to a nuclear power plant, I know exactly what we could do and what we can do before I spend the money on it, and that's what due diligence is for. So I think the report is probably just. If I had to gamble on this, I would just say that META is in contract and they're doing due diligence and they're running into an issue and that's probably an unresolvable issue. That will probably kill the deal, because you don't move a bee colony. You don't. That's what I'm saying. That doesn't happen. So if you run into the environmental issue, it's a deal killer. And you're looking for a new site. Well, how many sites are available next to the nuclear power plant? Probably none. Yeah, it's going to be not many. So where does that leave META in this situation?
Speaker 1:Lobbying to change the restriction. I suppose that would be their and that's.
Speaker 2:That's an uphill losing battle, I can just tell you. The environmental issues are very. There is a ton of lobby horsepower, the Sierra Club, environmental clubs that shut that down every day. So a smart developer is going to just go source land and look at site selection from perspective of cooperation. I'm going to go find a site that's not going to kill an endangered species of any kind, or I have to be dragged.
Speaker 1:Well, I'm going to go least resistance, I can deal with that. But I'm not going to deal with that. If we can find a site that works, that I don't have to deal with that.
Speaker 2:I'm going to do that yeah exactly Gotcha Headline again.
Speaker 1:This is interesting because this is the tote board thing, because last week, when we were recording last week, I think this $250 billion market, I think that whoever it was said, yeah, they're expecting the $250 billion data center market. It was just the number I saw last week yeah yeah, this is now up to 400.
Speaker 1:So this is solar bank. Expands into the projected, uh, $395 billion data center market for next year, probably, yeah, and so the yeah right and that. So that went in one week's time because I literally and I thought it was like the expected number. So I don't know where this number is coming from, but we just talk about how big these numbers continue to be. You know, you're getting up there very quickly and this is SolarBank, so SolarBank is very interesting.
Speaker 1:A leading provider of renewable energy solutions announces a strategic expansion to the rapidly growing data center market. In alignment with its commitment to harnessing clean energy technology, solarbank intends to pursue opportunities as a developer, owner and strategic partner in data center infrastructure, supporting the demand for high-performance, sustainable energy solutions within the sector. Huge announcement from SolarBank that's realizing that they want to participate. Everybody understands where all the wind is blowing, where this is going and and now we're in a kind of a land rush.
Speaker 2:Really it's a, it's the gold rush, it's like it is the gold rush and what I like about it is there's so much capital, so much private enterprise teaming to make it happen. You're not going to see regulators and traditional power companies resist this forever there, something's going to give, it's going to be. It's too big. It's too big to resist you. We read about PGM, you know, resisting the interconnect, not allowing these renewables to come online.
Speaker 2:I'm I'm telling our listeners right now it's way too big, it's way bigger than them. They might win a battle today, but the war the word Now. It's way too big. It's way bigger than them. They might win a battle today, but the war the word. The war is they lose all this grid capacity and they experienced the headline crises weekly, week long power outage. Until they wake up and get this done correctly and start to move with the times, right, move with the times. We are in a new age, right, and this is way bigger than what I think anyone even expected. I don't think anyone could have predicted what AI would do to this market, because five years ago, no one was talking about this.
Speaker 1:No, not like this. No, I mean, it was a steady increase and maybe looking at some sort of a of a spike on, but not like this and not not with. Well, and I've talked about it before, with the adoption of AI, how quickly people consumers are adopting and using in their personal lives, it's far eclipsing our adoption of any other platform, whether it was the personal computer, cell phones, smartphones. We are people's. Adoption of AI is coming quickly A hundred percent and utilization Businesses are still lagging behind, but people are using it for their business.
Speaker 1:They're just not doing it Personally. All of us are using it or they're, like a good portion of the population is using it either on a daily basis or weekly basis and figuring out how to do things, and it might be basic stuff, but we're using it. The demand is there and now a whole other markets are opening up for like well, I want to be able to do this thing, I want to be able to do this, I want to be able to use this using AI. So the demand is not diminishing at all.
Speaker 2:Well, that's the result of probably over 30 years of technology innovation, putting the tech in our hands and in our homes to where every single teenager, a household has four, five, 10, 20 devices that are all capable of leveraging AI. So if one household's got 20 devices that can leverage AI, I mean, do the math? Math's insane. That's the infrastructure that's come along for 30 years. That's enabled this whole AI situation to bloom the way it is.
Speaker 1:It's something Again, we really should do a tote board of like just how big this space is. I mean, I think in total, we're looking at data center, but if you look at the broader, like the whole infrastructure, yeah, we're over at data center. But if you look at like the broader, you know, like the whole infrastructure, yeah, you're, we're in, we're over trillions, yeah, and and you know, there was talk just in the end. I mean, there, you know, there's the. There've been prognostications about 15 trillion in energy infrastructure. Over to this is just massive amounts of money, oh, yeah. And so we'll continue to talk about this because it's exciting and it's and it's changing the way we are doing things and we're operating and we're functioning.
Speaker 2:So I'm excited and I'd say, change in a positive way. I think so.
Speaker 1:I think it's. It's up to us and I think I think a lot of people want to see that. We want to. We understand that we went through the internet age, like you can understand, the, and you know, when we first adopted that technology and there were some pitfalls. I think we've learned, I'd like to think we've learned and now it's okay. Well, how do we do this a little bit better? How do we control it? So we'll see, we'll see.
Speaker 2:So I think we're coming up on, we are up, man, we're up, we're coming up on time. Yeah, thank you. Thanks for listening.
