Beyond the Grid: How Google’s Data Centers Power AI and Communities

[00:00:00] Brian Kimenetsky: Welcome to A New Era of Innovation, a podcast series from Google and custom content from WSJ. I'm Brian Kimenetsky, Senior Editor at Custom Content from WSJ, joined today by Kim Green, Chairman, President, and CEO of Georgia Power, and Amanda Corio, Global Head of Data Center Energy at Google. Thank you so much for being here. So the American economy is growing more structured around data. So what does that mean now and in the future when it comes to our use [00:00:29] Amanda Corio: of energy and energy infrastructure? As you mentioned, people are relying on the internet and our data centers specifically every single day. And most people, when they think about going to the internet, they don't actually think about it pulling from actual physical infrastructure, but the internet actually does have a home and it is our data centers. And as we continue to advance the technological capabilities with artificial intelligence, we're seeing that that's requiring more energy to power all the tools that our businesses and our customers use every day. [00:00:59] Brian Kimenetsky: Amanda, Google has made a priority of clean energy development since 2010 when it signed its first power purchase agreement. And since then, Google has signed more than 170 of these agreements worldwide to purchase over 22 gigawatts of clean energy generation. As Google's head of global data center energy, you're at the center of all of this deal making. So how has Google's energy strategy changed over the course of your tenure? [00:01:22] Amanda Corio: Amanda, Google: Ten years ago when we started looking at this, really we were looking at energy. So if you think about energy, the electrons that flow on the grid. And right now, as we think about what is available to us for powering our data centers, we want to make sure two things. One, we want to make sure to keep advancing our clean energy goals by investing in and creating pilots for maybe more nascent power today, so that it can reach scale in the future. I think the other critical thing when we think about our energy strategy is ensuring that what we're doing is additional. And what I mean by additional, I don't just mean in clean energy, I mean in bringing new power infrastructure to the grid. And that's critically important because the grid is a shared system. And we want to make sure we're good grid citizens. And we want to make sure that any new supply that's being brought onto the grid to power us, we pay for and doesn't put cost on other rate payers that are also [00:02:22] Brian Kimenetsky: connected to that grid. Kim, how do you look at this question of efficiency in the grids that you operate? [00:02:27] Kim Green: We do have a very efficient system in the southeast, and we have a robust transmission grid, and we have a very diverse set of generation assets. So we have all different types of fuel and a lot of renewables. In fact, in Georgia, Georgia has ranked in the top 10 of solar installation for many years. So when Amanda talks about the importance of clean energy for Google, we know that is important to them and having the ability to subscribe to solar energy to be able to continue to invest in our hydro power. And we're very proud and Georgia Power to have been the only company that has successfully brought online new nuclear generation. As we continue to add new generation, like more solar, we are also pairing that with batteries. And battery energy storage systems are allowing that available solar energy that certainly is abundant during the day, but may not be tapped at night, to be actually utilized at night through the advantage or through the pairing of the battery systems. [00:03:40] Brian Kimenetsky: Amanda, how does your team work with utilities and local regulators early in planning processes to ensure that the power demands of a new data center are integrated in a way that enhances, rather than strains, the grid infrastructure? [00:03:53] Amanda Corio: Amanda- Before we make any decisions or break ground on anything, the first conversation we usually have is with our utility partner to understand where within the system does it make the most sense to cite a load like ours? How is it going to be helpful? How is it going to not incur additional strain or require extraordinary amounts of new infrastructure? That doesn't make sense. So it starts with the partnership there. And so how we go about it and how we work with state regulators, as well as our utility partners, differs depending on the market. But the most important thing, and this is definitely, I've been doing this for nine and a half years, we've learned is transparency and really being open and transparent with what we're trying to build and also understanding what are the challenges in the system and how can we help that. [00:04:42] Brian Kimenetsky: You want to make sure that the added demand doesn't create added cost. Amanda- Correct. Absolutely. Along those lines, Georgia Power was able to freeze basic electric rates for the next three years. Can you explain how that works as you bring sort of more of this power online? [00:05:00] Kim Green: Amanda- In Georgia, we are vertically integrated, which means that we at Georgia Power are responsible for generation, transmission, and distribution. And so we can make the decisions going forward looking for the long-term. As Amanda said, she's making long-term investments, we are too, and optimizing whether it's more generation that's needed and what kind, whether it's more transmission and/or distribution. And so as we look for the long-term and we work with our public service commission and our customers to understand clearly what their needs are, we can build a system that's optimal for them and the rest of our customers. We do serve 2.8 million additional customers, and it's wonderful that Google is as she talks about being a great grid citizen and also a great customer and a benefit to all of our customers because of these large loads and the amount of incremental costs that is being covered by Google. Amanda- And just simply the ability, as I was mentioning earlier, we're adding more generation, but it is more efficient generation. And that generation is going to operate for the benefit of all of our customers. So it helps us put downward pressure on rates for everyone. And that has allowed us to work with our commission, again, to freeze our base rates for the next three years. So it's a win-win. It's a win for Google and their data centers, and it's a win for all of our customers. [00:06:26] Amanda Corio: Amanda- Maybe one thing to add to that is, and I feel like we've heard it over the last number of years, you know, America's aging infrastructure. That's not just something some people say, it's actually true. The average age of our electricity grid is about 40 years, and these are assets that, you know, have about a 50-year life. So they need to be updated, refurbished, or replaced. And the thing is, 40 years ago, since 40 years ago, we've had a lot of inflation, right? Costs have gone up. The cost of labor has gone up. There's high demand for these services. And so that all of that is helping to contribute to the cost. Unfortunately, we're also having more extreme weather events. So in certain parts of the country, we're not only looking at replacing transmission lines above ground, but how do we bury them underground? I come from California, where that's a big topic, where wildfires are unfortunately something we have to deal with every year and going forward. That adds additional cost to the system as we look to, you know, future-proof our infrastructure against what we think is going to be coming in the future. [00:07:31] Brian Kimenetsky: Kim, what are, in your mind, some of the economic benefits that even perhaps under the surface that people don't see of this development of AI and data center growth? [00:07:40] Kim Green: Kim, first of all, just let me also applaud Google because they are really putting their money where their mouth is in terms of making communities better and being a great citizen, not just a great grid citizen, a great community citizen. So that is bringing jobs to that community, whether it's the construction of the data center, the operation of the data center, the tax base from that data center, which is sizable in many areas. That's really important. But if you think about some of what I talked about in terms of new power plants, that construction, those jobs, the operation of those power plants, the construction of the transmission grid, there is a tremendous amount of opportunity that is brought to the state where those types of activities are occurring. So it's really valuable. I mean, we're at Georgia Power going to be investing tens of billions of dollars in the state in the next few years. That rivals what might have been considered the largest economic development project that may be an automotive facility, for example, with a lot of investment and a lot of jobs. Well, we are also, thanks to these data centers and AI, creating investment in jobs, which is extraordinarily valuable. I want to pick up on two things you said, if I may. [00:08:58] Amanda Corio: You talked about the tax base. So they're in Northern Virginia, Loudoun County. It's one of the highest concentrations of data centers, definitely in North America. They have seen that they could hold their property tax rate the same for the last 10 years. And that's even as they increase budgets for services for that county because of the revenue that data centers are bringing in. I think the other thing I want to call out again is the jobs that you mentioned. For every one data center job, there are six jobs that it creates elsewhere in the economy, whether that's to build the power or literally the hot dog shop down the street that opens up because we build these large communities in these towns. And we're seeing that continue to grow. And I think sometimes that story doesn't get out there. I think anywhere where we operate, people see it, they live it, they know it years later. But I think right now there's a lot of questions because people don't know what data centers are. And we need to tell that story. I feel very confident about our ability [00:09:59] Kim Green: to serve this demand growth. And it's really an exciting opportunity for this country, for our states, for lots of utilities, and for a lot of customers who will benefit and communities who will benefit. [00:10:10] Amanda Corio: The other thing is we spend a lot of time thinking about how we can be more flexible in the system during times of grid stress. And that's something called demand response. We're working really hard to figure out how we on our end can evolve our software and hardware in the data center. So if there's a day in the middle of the summer when everyone turns their air conditioning on for an hour of the day, reliability, as Kim mentioned, is extremely important in making sure that people have access to power. Can we ramp down? Can we actually shift our loads to other times of the [00:10:48] Brian Kimenetsky: day or even in our network to other data centers? It's that grid citizenship that Kim is talking about. Yeah, absolutely. Before we get to final thoughts, I want to ask you both something that I think sometimes gets overlooked. We've talked about sustainable solutions and things like that. What is the business case for this? Why are these different power sources important beyond that makes us feel good [00:11:13] Kim Green: about ourselves? They're important because they help us meet those reliability objectives over the long term. And so to anybody who's listening, who's an engineer or, you know, thinking about the power or the AI system or want to make a difference in this world, because AI, it's changing how we do every part of our daily lives. And powering that is equally as important. And the AI won't happen without the power. And so we've got to be joined at the hip. We've got to be working symbiotically. And new technologies that are going to serve these AI tools will, I mean, it's really a virtuous circle. And we're going to get better because of AI. And we'll continue to allow AI to get better because we're getting better. [00:12:01] Amanda Corio: I think there's two things I would add to that. One, the scale, right? We just need more. So the more that you can develop for the future, a diversification of resources, while also, you know, looking at ways to decarbonize our power grid, the more optionality that provides, the more opportunity for scale. Diversity also brings less risk, right? So you're not dependent on the same supply chain for a single source of power. If you can build multiple options to power, you're now expanding the aperture for different supply chains, employing more people from different industries and different backgrounds. And that's critically important from a business risk perspective over time, that you're not a single [00:12:43] Brian Kimenetsky: source reliant on just one technology. Final thoughts from both of you, when you look five years ahead, 10 years ahead, what does success look like? Whether that's delivering affordable power, whether that's [00:12:54] Kim Green: creating capacity with all of the above? I think success looks like connecting all of these data centers in a way that provides them that reliable, affordable power. And, you know, continuing to work together to be innovative in our rate structures, our technology solutions, how we are ensuring a reliable and a robust grid. And of course, I think -- I know Google is building data centers across the world, but I think about this as a national security imperative, truly, that we are not losing out in this competition, global competition, to provide these tools that our economy needs to be successful. So I think it's an exciting, [00:13:38] Amanda Corio: bright future that I'm really looking forward to. I think success from a data center perspective looks like that data centers are a common part of the fabric of our everyday lives, right? That we talk about data centers almost in the same way we talk about utilities. It's part of the core infrastructure that powers everything that we do. Because our customers rely on us every day, just like we rely on Georgia Power. Success really looks like that understanding and that appreciation for, you know, how important this infrastructure is to our economy. I also think success from an energy perspective looks like an evolved energy system. I truly believe that flexibility, not just of generation, but also on the demand side, the load side, we create some really cool ways and evolve thinking of how we can play a role in that to have, again, a more efficient and effective ecosystem. And in my mind, that's what [00:14:38] Brian Kimenetsky: success looks like. That's a great place to leave it. Kim Green, Amanda Corio, thank you so much for the time. Thank you. Thank you.