Utilities Must Reinvent Themselves to Harness the AI-Driven Data Center Boom
Bain argues that utilities need to "innovate for speed and efficiency". We agree. Unfortunately the #1 reason we don't think that the existing electricity sector can meet the AI-driven data center boom is -- much of the slowness and lack of innovation in the sector is beyond the control of utilities.
(1) Electricity is heavily regulated and regulators are cautious individuals. After all, the worst thing that can happen to a regulator is something bad on their watch.
(2) Regulatory processes are designed to engage stakeholders in a form of negotiation. Stakeholders rarely agree on anything and will often litigate if things aren't going their way.
(3) The electricity grids have been set up as shared resources and so consumer groups are pitted against each other. For example, those close to generation don't want to pay for long-distance transmission to reach others.
This is why we believe the time is now to break the century old paradigm in the electricity sector. We need new entrants who are allowed to operate independently of the existing sector. If allowed to operated independently then they can innovate for speed and efficiency.
