As banks adopt AI, here are 3 climate techs that could lessen its energy toll

September 23, 2024 4:33 PM

As investors and activists gather in New York City to discuss solutions for climate change this week, one of the biggest questions is how banks and other companies can use less or, at least, cleaner energy to power their growing AI operations.

At Climate Week, some of the talk is about how the AI boom is driving higher demand for energy, as data centers are built to serve it and as power plants are built to support those data centers. Climate tech startups and established companies say they have at least a partial answer to this accelerated need for more power, and in many cases, banks and investors have agreed.

"We're going to see a 15 to 20% increase in the demand because of this, which leads to 160 gigawatts of peak demand by 2033," said Vanessa Chan, chief commercialization officer at the Department of Energy, at Nasdaq's Building the Future Summit on Monday. "Now the good news is by the end of this year, we will build the equivalent of 30 Hoover Dams worth of clean electricity on the grid."

Bob Mumgaard, CEO of Commonwealth Fusion Systems, center, spoke with Laurene Powell Jobs, founder and president of Emerson Collective, and Tom Steyer, co-executive chair of Galvanize Climate Solutions, about the "star" his company has created.

Photo: Penny Crosman

Nuclear fusion

The most forward-looking climate tech at the Nasdaq conference was nuclear fusion. There are about 50 nuclear fusion companies all told.

Nuclear fusion takes advantage of the most prevalent process in the entire universe, according to Bob Mumgaard, CEO of Commonwealth Fusion Systems. Laurene Powell Jobs, founder and president of the Emerson Collective, which has invested in the company, interviewed him on stage.

"It's the process that's inside the stars," he said. "It's the process that builds up big atoms from small atoms."

Combining light things to make heavier things releases enormous amounts of energy, Mumgaard said. It's the opposite of nuclear fission, which splits atoms to release huge amounts of energy.

The challenge to nuclear fusion, Mumgaard said, "is that in order to make this work, you actually have to basically build a star on earth." This requires temperatures hotter than the sun, around a hundred million degrees.

Commonwealth Fusion Systems has created the conditions inside machines that get to those temperatures, yet is insulated enough to be safe, according to Mumgaard.

"We actually built a star on earth in California," he said. The company is building a pilot outside of Boston that will do this at industrial scale. It's manufacturing a machine that will hold the "star." By 2027, he expects the company to operate at industrial scale.

Cooling towers at the Three Mile Island nuclear power plant in Middletown, Pennsylvania. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Photographer: Andrew Harrer/Bloo

Nuclear fission

Existing nuclear power plants use nuclear fission to generate energy, and they provide about 17% of the world's energy.

When Microsoft recently announced it's bringing the infamous Three Mile Island nuclear power plant back to life to power AI initiatives, the news seemed astonishing. The Harrisburg, Pennsylvania, plant has long been known to be the site of the worst nuclear power plant disaster in U.S. history. In 1979, one of its reactors partially melted down, releasing radioactive gasses and radioactive iodine into the environment.

Yet energy experts consider nuclear fission to be one of the cleanest forms of power. Fourteen large banks said Monday that they support a broader global pact to triple global nuclear energy capacity by 2050.

Chung Sung-Jun/Photographer: Chung Sung-Jun/Get

Carbon recycling

Carbon capture and carbon recycling take several forms. Several companies, including Climeworks, capture carbon from industrial polluters and inject it into the earth, where it can mineralize in two years.

Etosha Cave, co-founder and chief scientific officer at the carbon recycling startup Twelve, said her company captures carbon from industrial sources and creates materials out of it.

"We made gallons of jet fuel in contract with the Air Force," Cave said in an interview. "We made a car part for a Mercedes-Benz." The company recently raised $645 million, $45 million of it in credit facilities from banks.

To get financing from banks, the company showed them its economics and some of its customer contracts, she said.

This category of climate tech is sometimes called carbon dioxide removal. Last year, JPMorgan Chase said it seeks to scale its investment in carbon removal technology that would remove and store 800,000 tons of carbon. Companies it contracted with for this include Climeworks, Charm Industrial and CO280 Solutions.