We live in interesting times. Data centers are starting to use a lot of energy. But in the grand scheme of the energy market rapidly trending towards using renewable energy, that's actually OK.

Energy usage is bad for our planet when you use things like coal and gas plants to generate the energy. But the vast majority of installed new capacity is actually a mix of wind and solar supplemented with battery. That mix is growing at a rate measured in TW/year of added capacity. It's well over 80% now.

A lot of new gas and coal capacity is increasingly reserved for use rather than actually used. Shiny new gas plants designed to run 24x7 are actually now being pushed into a role as peaker plants. Which means they are rapidly becoming financial basket cases. Some relatively new plants have actually been closed already for this reason.

More coal gets decommissioned than built at this point (China and India are still adding capacity, the rest of the world mostly isn't). For the world, peak coal was last decade. And even in China, peak coal seems near.

In terms of overall fossil fuel usage, things are about to peak and then decline in terms of fossil resources used. What that means is that from now on the amount of fossil fuels (coal, gas, oil) used for electricity production should start to decline not just in relative terms but in absolute terms.

Don't get me wrong, it's still pretty bad and short term the decline is maybe not yet quite happening or that easy to observe. But in a few years there should be some measurable steady decline. Experts seem to disagree whether that's right now or by something like 2028. But the point is that we're at or close to the peak here.

Cloud computing and AI are one of the big drivers for all this. They create demand for more energy. This causes the energy market to grow. But as it grows, fossil fuel usage is starting to shrink. That's a trend that accelerates as renewable energy and batteries get cheaper (learning effects, technology improvements, etc.).

There are some pretty interesting economics at play here that boil down that doing more of a thing causes that thing to become cheaper. Not just a little bit but actually by quite a lot. So, there's value in creating new demand: it speeds all this up.

Cost per mwh is an interesting number to track. That has been dropping steadily over the last decade and a half. Anyone using a lot of energy, e.g. data centers, is going to be looking for the most cost effective way to source that energy. And renewables are at this point the cheapest source by far.

The main premise of this article seems to suggest that we should slow down things like AI because it uses too much energy. But by creating a need to grow the energy market, we're actually speeding up the demise of fossil fuel generation; not slowing it down. So, I'm not so convinced that putting a lot of energy (pun intended) into attempting to slow this down is that productive. It's probably futile and the effects are debatable (I would argue negative even).

Besides, computing resources are enabling a few things that are actually causing behavioral changes. For example, we travel a lot less for work. And we can work remotely. Also a lot of work is getting automated entirely removing the need to move humans around to do the work. AI is projected to be a big part of that. It has an energy cost. But it also has upsides. And that cost can met sustainably. So, it's not all that bad.