We live in a world of search engines, video games and e-commerce. Every product and piece of information is at our fingertips. This is stimulating an explosion of data centers where the hardware that makes all this possible operates. These centers draw almost unimaginable amounts of power.

The power demand isn’t going to slow any time soon. The advent of cryptocurrency and generative AI is creating an exponential rise in demand for more data centers and more electricity. We’re witnessing a revolution in electric cars, trucks and appliances. Electric companies will have to meet the demand while moving us toward a carbon-neutral world. We can do this by taking three key steps.

The first step is to accelerate the ongoing revolution in renewable energy.  In 2022, 83% of all new energy added globally by utilities was renewable, and renewable energy is expected to surpass coal by 2025.

While the accessibility of renewable energy has increased, the better news is that costs continue to decrease. Solar manufacturing costs drop every year and will only get more competitive with fossil fuels.

Wind projects have decreased in costs by 40% over the last decade. The Inflation Reduction Act is an essential step in the right direction with an estimated $1.2 trillion in incentives for clean technology by 2032. Clean energy is not only better for the planet, it’s becoming cheaper by the day.

Unfortunately, the sun doesn’t always shine, and the wind doesn’t always blow. That’s why advancing battery storage is a key bridge to a clean energy future. When I served on the board of Tesla in 2010, the energy cost for batteries was over $1,100 per kilowatt-hour. This was part of why electric vehicles were prohibitively expensive. Just ten years later, the cost of battery storage had dropped by an order of magnitude to $137 per kilowatt-hour. Tesla has cut electric vehicle prices five times in 2023 alone.

Battery manufacturers are driving decreases in battery costs that are leading to a revolution in power storage. Tesla’s energy/battery division is a prime example, deploying 3.98 gigawatt hours  of power storage in the third quarter of 2023 alone. That’s enough to power all the homes in Chicago and LA combined. Expect to see some form of battery storage in most homes, offices and schools in the coming decades. Batteries are rapidly becoming a cheaper alternative to natural gas or nuclear, and they are a lot easier to permit next to a school or apartment building.

The toughest problem to solve will be building a resilient, multi-directional grid that will connect this new mosaic of storage and energy devices. This new grid will enable utilities and homeowners alike to generate power and store it when the wind is blowing and the sun is shining, as well as to transport it to the areas that need it the most based on the time of day. This will enable us to avoid building excess capacity and help us solve for those critical times of peak energy demand (both winter and summer) by saving up power when it’s cheap and using it during peak demand.