How the Electrical Grid Is Being Rebuilt for AI | Bloomberg Primer

0:00- The world's largest machine is so big,

0:03it can be seen from space.

0:06In fact, it covers huge areas

0:09of the Earth's... surface.

0:11Oh wait, sorry. Hold on. Gimme the other side.

0:16There we go.

0:19- Our lives depend on electricity,

0:22if you haven't noticed already,

0:24and all of that electricity in almost all parts

0:26of the world is delivered to you by the grid.

0:30The world's biggest, most complicated machine ever built.

0:34And if you start to notice the grid,

0:36you'll see it everywhere.

0:38But it is so everywhere that people just kind of forget it.

0:44- For a long time, rich countries haven't had

0:46to think about their grids all that much.

0:48Their electricity demand has been pretty much flat

0:51since the 2000s.

0:53But times are changing.

0:55- The explosive growth of AI...

0:58- The rapid build out of data centers...

1:00- They're consuming enormous amounts of energy.

1:02- You have four companies now that are intending

1:05to spend over $300 billion this year.

1:08- With industries like AI and EVs growing fast,

1:11the world has predicted to use twice

1:13as much electricity by 2050.

1:16That's roughly a whole new USA's worth

1:18of electricity every five years.

1:21To make all that power

1:22and get it to where it needs to go,

1:24the world's grids need to evolve.

1:27All that new infrastructure will cost billions of dollars,

1:30but so did broadband internet,

1:32and that's ended up creating trillions of dollars of value.

1:36And some countries' grids are evolving faster than others.

1:40- In China, power generation has gone up

1:43seven times since 2000.

1:44The battle to build the best grid

1:46is a battle to win the future.

1:48- And with more power comes more opportunities.

1:51New ideas and technologies are in the works

1:54to massively upgrade the world's wiring.

1:56- It's spinning round at 1500 rpm.

1:59- Can it all happen fast enough to power the future?

2:02The answer is going to get a bit nerdy and technical.

2:06But we are all nerds here, right?

2:09Okay, good.

2:20Right. The show's called "Primer."

2:21So here's a quick primer on the grid.

2:26- So a typical grid structure looks like a large power plant

2:30somewhere typically far away from where you are.

2:33That is generating power.

2:34Could be nuclear, could be gas, could be hydro,

2:37could be solar these days.

2:39And then a long series of transmission lines,

2:44a substation that makes sure that the electricity

2:47is distributed to you in just the exact form as you need it.

2:51And then it is consumed as charging a laptop

2:54or running a motor inside a factory.

2:58- These days, the grid is pretty much everywhere,

3:01string out all the world's transmission cables end to end,

3:04and they'd stretch 42 million miles.

3:08That's almost halfway to the sun.

3:10And all the parts of this massive system have

3:13to work together in perfect harmony.

3:15A sudden imbalance,

3:17say a large power plant switching off without warning

3:20can easily throw the whole system outta whack.

3:22Or even...

3:27Well more on that later.

3:30But most of the time the grid works just fine

3:33powering our lives and helping our economies grow.

3:37- So there is a direct relationship between

3:39how much energy an economy consumes

3:42and how much economic output results.

3:45The richer you are, the more electricity you consume,

3:47the bigger your grid

3:49and the bigger your grid,

3:50the more electricity you consume, the richer you become.

3:54- That feedback loop has been going strong since the

3:57early 20th century.

3:58When electricity started to become a major energy source.

4:02Suddenly all you needed to bring energy into your home

4:05or business was a wire.

4:07In 1910, just 14% of US homes had electricity.

4:11By 1930, it was 70%.

4:14Companies like GE sold millions of fridges and TVs

4:18and the grid grew fast.

4:20But things started to change in the 1970s when,

4:25thanks to the oil crisis,

4:26energy started getting more expensive.

4:29- So that's when the first big movements

4:31in energy efficiency began

4:33with major energy efficiency programmes run

4:36by electric utilities.

4:38- That's Rich Miller, a former VP of Con Edison.

4:40New York City's power company,

4:42- Con Edison changed its slogan as a company in the 1970s

4:46from "Dig, We Must" to "Save a Watt."

4:48So you know a great example of how everything changed during

4:53that time period.

4:54- At the same time, rich countries started doing less

4:57manufacturing and more office work, which used less energy.

5:01- By the early 2000s, we really began

5:05to see some flattening of electric growth.

5:09- In fact, in western economies for the last two decades,

5:13electricity demand was either flat or declining.

5:17- So the grid, which had been growing nonstop

5:19for a hundred years, suddenly didn't have to grow anymore.

5:23And that was kind of nice while it lasted.

5:25GDP kept growing while we used the same

5:27amount of electricity.

5:30But lately, energy demand isn't looking so flat anymore.

5:34- Now we're actually beginning to see a growth in demand

5:38and consumption again.

5:40It really is a three-part contributor.

5:44- It's moving from gasoline cars to electric cars,

5:48moving from oil furnaces and gas boilers to heat pumps,

5:52and of course the growth of artificial intelligence,

5:55which is powered by data centers

5:57that consume a lot of electricity.

6:00- Those industries could add a lot of economic growth,

6:04but they absolutely guzzle electricity.

6:07According to one estimate, AI could boost the global economy

6:10as much as 15% over the next decade,

6:13but it could also use as much power as the entire country

6:16of Japan by 2030.

6:19- So meeting all that new electricity demand requires the

6:22entire grid to become bigger.

6:24And because it is the first time it's happening in three

6:27decades, the industry has been caught...

6:31I don't want to say it with its pants down.

6:34- If an industry doesn't build something for a while,

6:37it tends to have a hard time starting up again.

6:39Supply chains, atrophy, infrastructure becomes outdated

6:43and run down and workforces dwindle

6:46and age out, that's what's happening

6:48with electric grids in many Western countries.

6:52But elsewhere in the world,

6:53some countries have their pants very much on.

6:58- China's been building its grid in real time.

7:00It's basically gone nonstop since the 1990s.

7:03So they still have a a heavily, you know,

7:05employed skilled labour pool that they can pull from.

7:09And they have a supply chain that's mature

7:11and ready to grow as the needs are growing.

7:15- All that's been happening because it's had to.

7:18China does a lot of the manufacturing

7:21that western countries mostly stop doing,

7:23and the grid has had to keep up.

7:26- In China, you still have pretty rapid economic growth.

7:29A bad year here is 5% growth, which is, you know,

7:32much higher than you normally see

7:33in developed economies like in the U.S. and Europe.

7:36And so whereas, you know, the U.S. has barely seen

7:39an uptick in power generation in China,

7:41power generation has gone up seven times since 2000.

7:46I moved to China 29 years ago.

7:48And the difference between now and then is just palpable.

7:51You know, I used to drive on my way to school

7:53and we'd pass, you know, people living in huts and hovels.

7:57Now, you know, in a city like Shanghai

7:59or Beijing, there's brightly lit skyscrapers.

8:03- Energy is destiny.

8:05It decides whether your country has enough capability

8:10to do the things it wants.

8:12- And the countries that can't power new industries like AI

8:15and EVs just won't have as much of those new industries.

8:20- And so if as a country you're not able

8:23to build out the grid,

8:25you lose out on being a competitive economy in

8:28the 21st century.

8:30- For the rest of the world, keeping pace

8:32with China's fast growing grid isn't going to be easy,

8:36but the grid of the future isn't necessarily going

8:38to look like the grid of the past.

8:41A new technologies to move electricity could be the key

8:45to getting ahead, especially for CEOs

8:49who can nail the photo shoot.

8:52- All right, gimme a real casual lean. Gimme the elbow lean.

8:56Nice.

8:57- My name is Tim Heidel.

8:58I'm the chief executive officer at Veir.

9:04Veir's building a new generation

9:06of superconducting power delivery hardware.

9:10- Here at Veir, liquid nitrogen is steaming,

9:14machinists are machining,

9:15and a whole new way

9:17of moving electrons is being commercialized.

9:20- Expanding the grid is far too slow to meet the challenge

9:23that we're gonna see in the decades that come.

9:25We need new technologies and new approaches.

9:29We think superconducting transmission lines can

9:30play an enormous role.

9:32We can build lines that have a lot more capacity than

9:35what you've been able to build in the past.

9:38- So what is a superconducting cable?

9:42See, your typical power cable is made of a good conductor.

9:45A material that electric current can pass

9:47through without a lot of resistance.

9:49The more resistance,

9:50the more energy gets lost along the way.

9:53Plastic has a lot of resistance, making it a bad conductor.

9:58That's why it's used for insulation.

10:00Copper and aluminium have low resistance,

10:03making them pretty good conductors.

10:05So we use them for most power cables today.

10:09Veir's cables on the other hand, are made of this stuff.

10:12- So I'm holding here a sample

10:14of the superconducting material.

10:16It's a really special class of materials

10:18that in certain operating conditions,

10:21no longer have resistance.

10:24So when you can operate a material

10:26that doesn't have resistance,

10:27we can carry a lot more power in a very, very compact space.

10:32- Cables that can carry more power could be a big upgrade

10:35for the grid, helping move a lot of electricity

10:38to the data centers, homes and EV chargers that need it.

10:42They could also mean we don't have to build

10:44as much new infrastructure since one superconducting cable

10:48could carry as much power as several conventional cables.

10:52But first Veir needs to figure some things out,

10:56like how to keep its cables extremely cold.

10:59- Yeah, so the cable, we have it in this

11:03test bed full of liquid nitrogen.

11:05The liquid nitrogen is like 77 kelvin,

11:08which is very cold.

11:12- In fact, it's somewhere between the temperature of space

11:14and the dark side of the moon.

11:16The cables got to be that cold

11:18to get into its superconducting state,

11:21so it can carry insane amounts of power.

11:24- Essentially, we use these large power supplies to put

11:26a lot of current into our superconducting cables.

11:29We're in like a pretty large building

11:30and that draws almost all the power from the building.

11:33We have to like watch that the machine shop

11:35isn't using something powerful at the same time,

11:37so we don't overload the grid.

11:41Yeah.

11:43- When we visited Veir in 2025, the company was starting

11:46to produce 10-meter long sections

11:48of its cables on this assembly line.

11:51Uh, is this thing on?

11:54- We're going extremely slow.

11:56Typically takes about two weeks to make a cable.

11:58In normal cable manufacturing,

12:00you can't even see the the real spinning.

12:02It's spinning so fast.

12:03A lot of the manual things we're doing right now

12:07are gonna be automated

12:08and yeah, it'll be a much faster process.

12:11- Do you think about a future

12:13of these cables stretching across America,

12:15stretching across the world?

12:18- Um, I hope so. I really hope so.

12:22- Veir has raised a little over a hundred million dollars

12:24so far from investors, including Microsoft,

12:27and it says it aims to have its first cables

12:30on the grid within a couple of years.

12:33But none of this is easy or cheap.

12:36The system needs vacuum tubes

12:38and a continuous supply of liquid nitrogen,

12:40which could add a price premium over conventional cables.

12:44And there's another issue, Veir's potential customers,

12:47electric utilities, aren't known

12:49for their high-tech risk-taking

12:52- It just can't be denied that

12:54utilities are conservative businesses.

12:58When you're worried about providing power a hundred percent

13:01of the time, you're gonna be very cautious about trying

13:04something new.

13:06- I don't know we'll ever seesuperconductors be the only

13:09choice in this field,

13:11but I expect that the power density that they can achieve

13:14will allow them to increasingly dominate conversations

13:17around future transmission systems.

13:21- So will better cables moving more energy be

13:24enough to power the future?

13:27Well, even with better hardware, we still have

13:30to keep the grid stable.

13:32And lately that's been getting harder.

13:51- Large parts of Spain

13:53and Portugal have been hit by a power outage.

13:56Tens of millions of people now

13:58who are experiencing a total blackout.

14:12- It was the worst blackout in Europe's modern history,

14:15and it left millions of people in the dark.

14:19There were hundreds of people stuck in metros in trains,

14:23shops, and supermarkets couldn't operate

14:25because payment systems were down.

14:28Spain's largest bank La Caixa, calculated

14:31that 400 million euros were wiped out of the Spanish economy

14:37- For most life without electricity was merely inconvenient

14:41or an excuse to party.

14:45And within about 18 hours, the power was back.

14:51But a blackout of this scale usually points

14:54to a larger problem.

14:56And this one has raised concerns about the very

14:58structure of the modern grid.

15:01- For now, what we know is

15:03that there was instability coming from some solar farms

15:06in southern Spain.

15:09- Spain has added a lot of solar power in recent years

15:12because, well, solar has a lot of advantages for a grid.

15:16It's clean, cheap, and versatile,

15:18and as a result, it's growing exponentially,

15:21helping grids to keep up with rising power demand.

15:24But solar does seem

15:26to have played some role in the Spanish blackout.

15:30Not the sheep, though. The sheep are innocent.

15:34- A lot of people blamed renewables

15:35for the Spanish situation,

15:37but renewables did exactly what they were told to do,

15:40exactly what it said on the tin.

15:42You know, when you look back, it was a perfectly

15:44foreseeable car crash.

15:46- Guy Nicholson works for European power company, Statkraft

15:50and inside this building, guy's got a machine

15:53that he says could help prevent Spain-style blackouts.

15:57- So this is a synchronous compensator.

16:00- Sorry, sinuous coffee maker?

16:02- Synchronous compensator.

16:04- What was it?

16:05Syllabus commentator?

16:06- A synchronous compensator, an electrical machine.

16:09It weighs a hundred tons.

16:12It's spinning round at 1500 rpm as you can see.

16:17- To understand why renewables can make problems

16:20for the grid and how this big spinny thing can

16:23help solve them, we need to dive a little deeper

16:26into the grid's, inner workings.

16:29For the grid to work properly,

16:31it has to be in perfect balance.

16:33The amount of electricity being made has

16:35to match the amount being consumed second by second.

16:39If so, the voltage remains stable and everybody's happy.

16:43If not, the voltage can spike

16:45and the different parts of the grid start

16:46to disconnect to avoid being damaged.

16:49- It starts with something falling over

16:51that causes the next thing

16:52to fall over that causes the next thing.

16:54And you get this kind of domino effect

16:55where the whole grid goes down.

16:58- Now, if the system failed every time there was a slightest

17:01imbalance, but have blackouts every day.

17:04Fortunately the grid has a saving grace: inertia.

17:09- And goes right the way back to Isaac Newton

17:12and the first laws of motion.

17:15A thing that is in motion,

17:17will remain in motion

17:18unless there is a force that acts against it.

17:22That property, which I am sure even if you've forgotten you

17:26all studied in high school, is called inertia.

17:30So when you have an object like a hundred tons spinning

17:33turbine, it'll continue spinning at

17:36that same rotation regardless

17:38of what's happening on the grid.

17:40- And these spinning devices can be found

17:43in any traditional power plant.

17:44They're the machines that actually make the electricity.

17:48- Coal, gas, nuclear, hydro,

17:51all these have big spinning rotating generators,

17:54and those machines have a lot of inertia, a lot

17:56of spinning mass.

17:58- That inertia is like a little extra energy

18:01that the grid can tap in case of emergency.

18:04- So say suddenly a power plant goes down

18:07so you don't have supply and demand imbalance.

18:11The spinning device notices

18:12that something's gone wrong on the grid

18:15and uses the inertia that's been built up

18:18to inject just the right amount of power

18:20to keep the grid stable.

18:22In that instant, it loses a little bit

18:25of its rotational speed

18:26and turns that energy into the

18:29electricity that the grid needs.

18:31And for most of the grid's history, this worked just fine.

18:35- But what's happening now on the modern grid is

18:37that you're adding things like solar

18:40that have no spinning devices in them.

18:43- Solar panels convert sunlight directly into electricity,

18:47meaning no spinning generator and no inertia.

18:51- And in the past five years, Spain has tripled the amount

18:54of solar it has added on the grid.

18:56- So when a couple of solar plants suddenly went offline,

18:59there wasn't enough inertia to restore the balance and...

19:05lights out.

19:09- As we get more renewables on the grid,

19:10we are gonna need inertia.

19:13We at Statkraft, were

19:15very much thinking about this problem.

19:18- Which brings us back to this silly mush cogitater.

19:21Synchronous compensator.

19:22- Sorry, synchronous compensator.

19:25It's just like a spinning device you'd find in a coal

19:28or gas plant, but without the coal

19:30or gas, add enough of these

19:32and your grid will have all the inertia it needs.

19:35Even with no fossil fuel power.

19:38- It's providing inertia to the grid, enabling the grid

19:41to run with more renewables.

19:44While we hear on the grapevine is Spain is possibly

19:46gonna do similar things.

19:48- Almost immediately

19:50after the blackout happened,

19:51the Parliament passed regulations that would allow

19:55for more types of devices like synchronous compensators

19:59to participate in stabilising the grid,

20:01- Making the necessary upgrades won't be cheap for Spain,

20:06but they'll probably result in more reliable

20:08and abundant electricity.

20:10Exactly what rich countries need to keep up

20:13with rising demand.

20:17But of course, not all countries have the money

20:20to make these kinds of investments,

20:22and as a result, their grids have lagged behind.

20:26Sub-Saharan Africa has more people without electricity than

20:29any other region on earth, about 565 million.

20:33Grids are often limited

20:36to urban areas leaving large rural areas in the dark.

20:41But grids are growing here too.

20:43Just a different kind of grid.

20:46- It's just cheaper these days

20:47to build out a local mini grid.

20:51They're called mini because they are really much smaller

20:54than what typical grids are.

20:57- Where a traditional grid can cover

20:58thousands of square miles.

21:00A mini grid typically serves a much smaller area like a

21:03small island or a village.

21:06This Nigerian village is beyond the reach of the main grid,

21:09creating an opportunity for private companies

21:12to bring electricity piecemeal.

21:15- Averagely mini grid serves about 400 community members.

21:20- Husk Power has installed dozens

21:23of solar mini grid across Nigeria.

21:26- Our mini grids runs for 24 hours as

21:29who use our electricity to power up their appliances.

21:32like fans, TVs.

21:36Children cannot come back home

21:38and do their homework at night.

21:42- Electricity helps local businesses too

21:45by powering all manner of machines

21:47that help residents earn more income.

21:49Like this rice milling machine.

21:52Alright, it might be a far cry from a multi-billion dollar

21:54data center but every grid has

21:57to start somewhere.

22:02In the U.S. in the 1930s,

22:04the government spent billions electrifying rural areas

22:07extending the grid across the continent

22:09and helping the U.S. to become the richest country on earth.

22:13In Africa, a similar project is starting a programme called

22:17Mission 300, backed by the World Bank aims

22:19to invest billions of dollars to get electricity

22:22to 300 million Africans by 2030.

22:26If all goes to plan in a few decades,

22:28Africa's grids might not be so mini anymore.

22:32- So you may start with a bunch

22:34of mini grids in Nigerian villages,

22:37which are then slowly interconnected into a grid.

22:41- If every citizen has access to electricity, right,

22:46businesses will prosper, the unemployment rate in the

22:49nation will reduce.

22:51People will come up and do things for themselves,

22:54and life as a whole will be better.

22:59- As technologies change

23:01and economies grow,

23:02the world's grids are evolving in different ways

23:05and it's not yet clear which approach will lead

23:07to the greatest returns.

23:09But there's little question that the grid will keep growing,

23:12empowering modern life for a long time to come.

23:16- It's always hard to tell

23:17and predict what those next big steps are going to be,

23:22but the grid is never gonna go away.

23:26- The world has clearly hit an inflexion

23:28point when it comes to energy.

23:30All these new demand sources are gonna require

23:33more and more power.

23:35- The grid isn't particularly glamorous

23:37and it's a big job keeping it going,

23:39but where there's grid, there's often growth.

23:42And that's a pretty good incentive to make the

23:45of the future the best that it can be.