Cloud in Front of the Meter: AWS's Strategy for Sustainable and Efficient Energy Growth
Key Highlights
- AWS emphasizes collaboration with utilities to develop solutions for improving grid infrastructure, ensuring reliable power for growing data and AI demands.
- AI technology is transforming utility operations by enabling predictive maintenance, outage prevention, and faster interconnection processes, significantly reducing approval times from weeks to minutes.
- AWS and other hyperscalers are investing in renewable energy projects worldwide, supporting grid decarbonization and sustainable growth.
From RE+ to CeraWeek to Microgrid Knowledge, the key themes emerging at energy conferences and in corporate board rooms lately is how to power all of these new data centers, automated manufacturing plants and AI factories reportedly coming online in the next five to 10 years.
The grid itself cannot handle that rise in load so quickly, according to the conference consensus. On-site power microgrids and energy parks are prime bridge solutions in a movement edging closer to behind the meter and jumping over the utility interconnection queues.
And yet one of the world’s biggest hyperscalers says it’s still deeply committed to working with utilities to solve its power supply needs. Computing cloud giant Amazon Web Services (AWS) is collaborating with utilities nationwide, from Dominion Energy to Entergy and Ameren and beyond.
Staying in front of the utility meter
And while AWS has power needs big enough to justify a look forward into behind-the-meter solutions, its first inclination is staying close with the utilities.
“We’re in front of the meter,” Joseph Santamaria, AWS’ new leader in its energy & utilities business unit, told EnergyTech.com in an exclusive interview. “It’s simpler and that way we also contribute back to the ratepayer.
“We do multi-year financial guarantees” which are deals structured to keep demand charges at a minimum, he added. “We also signed the (Trump Administration’s) Ratepayer Projection Pledge.”
AWS joined other hyperscalers such as Google, Microsoft, OpenAI and Meta in the pledge, which is framed as protecting everyday utility customers from price hikes driven by the grid constraints overmatched by runaway AI load growth. Under the deal, tech firms develop separate rate structures with utilities and state governments to ensure they are paying for what they use.
“Utilities take care of the infrastructure. . . and the ability to balance demand and supply,” Santamaria, whose energy career included a lengthy stint at east coast utility PSEG before coming to AWS, told EnergyTech. “What we need to do is make sure we are paying our fair share.”
AI has scared many of us, sometimes for different reasons. There are the ethical considerations, the jobs impact and the power generation share which is expected to add perhaps 125 GW in new demand by the early 2030s.
AI is the solution and the problem
The shudder is understandable in the face of such fears, but apparently Santamaria and AWS think closing ranks and going more behind-the-meter should only be a partial solution. The real goal is to work with utility infrastructure investment strategies and use AI as a tool to improve energy efficiency and reduce load all around.
“We’ve moved from power consumers to power partners,” Santamaria pointed out. “How do we do that? We bring generation to the grid (through power purchase agreements and utility load financial commitments). We’ve invested in 300 utility-scale wind, solar, battery and nuclear projects across 28 countries.”
Some grid decarbonization advocates historically have turned their noses up at so-called renewable energy PPAs, some even calling it corporate “greenwashing” which does not power the customer directly. Others would say that these deals finance clean energy on the grid that otherwise might not be built or commercially interconnected.
In the same way, many behind-the-meter and microgrid advocates have criticized utilities for their perceived hesitation in embracing distributed energy and other advancements at the grid’s edge. Perhaps a third way, led by AWS and others, is to empower utilities as two-way partners with digital infrastructure leaders.
AWS and other AI enablers are also working with utility customers who could benefit from the latest in predictive and analytical digital technology. AI can create a challenge, but it also can solve through ensuring more efficient operations at utility power generation, transmission, distribution and meter levels.
“Both of these are happening today,” Santamaria noted. “We’re already seeing AI transform energy use and shifting from reactive to predictive methods of operation.”
In other words, AI can deliver better and more forecastable outcomes on outage prevention, predictive maintenance and various other forms of asset management.
AWS has worked with utilities including Southern California Edison, Pacific Gas & Electric and Duke Energy. AI and other machine learning can make the built environment more energy efficient as well as upgrading AWS’ own work in creating more responsive data centers when it comes to controlling energy and water use.
“Not all loads are created equal,” Santamaria said. “The data centers we’re building now are four times more energy efficient than the on-premises data centers they replace.”
Streaming the grid interconnection process
If forecasters are correct, the coming load will need every bit of those efficiencies. Meanwhile, tech giants such as AWS acknowledge that utility interconnection queues are currently way too slow but next-gen technology such as AI can accelerate improvements in the process.
Duke Energy, for instance, works with AI to look at the grid interconnection process and does simulations to help it make decisions. That process used to take six weeks and now can be done in 15 minutes, Santamaria pointed out.
“We compress months into weeks, then start chipping away,” he said. “There’s not going to be a silver bullet. It’s taking workflows and bringing AI to solutions.”
All of this gives AWS hope that sticking with the utilities and grid interconnection is the best path forward.
“Our preference is to stay ahead of the meter,” Santamaria added. “We’ve done some things behind the meter and will continue to do that.”
Front of the meter, contrary to popular current opinion in the microgrid sector, allows for a clear journey which keeps AWS in its technology wheelhouse while also empowering the grid to get better.
“The more we can use the system the more we can invest in the system,” he said.
About the Author
Rod Walton, EnergyTech Managing Editor
Managing Editor
For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
Rod Walton has spent 17 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.
Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World.
EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.