619. Uday Turaga, What the AI Boom Means for Energy

Show Notes:

Uday Turaga runs ADI Analytics, a boutique firm specializing in oil and gas, energy, and chemical industries. ADI Analytics was founded in 2009, has 20 employees, and operates globally. The firm focuses on the value chain across oil and gas, energy, and chemicals, including upstream exploration, midstream natural gas and LNG markets, downstream fuels, power utilities, and energy transition. In 2017, ADI Analytics acquired Chemical Market Resources, expanding its capabilities in the chemicals and materials spaces.

Oil and Gas Projects

Uday discusses various oil and gas projects, including work with large oil and gas majors like Exxon, BP, and Shell. ADI Analytics helps refining independents explore export markets in Latin America due to the US refining complex's gasoline surplus. The firm conducts feasibility studies for LNG export terminals on the US Gulf Coast, analyzing competitive positioning, technology, risks, and financing.

He explains that scenario planning for an oil major focuses on long-term energy demand, and how it can be affected by the growing demand for natural gas from data centers and emerging markets globally.

About ADI Analytics 

Uday talks about ADI Analytics. They work with large chemical players like BASF, Dow, and SABIC, covering the entire value chain, and help them on the feedstocks conversion into key building blocks in the chemicals industries, such as olefins, aromatics, and then all the derivatives, and further down into plastics, polymers and and how those plastics and polymers end up in our lives as consumers. He explains why the chemical industry is distressed, and how the firm helps clients understand the cost competitiveness of different chemicals globally and the impact of energy transition on the industry. Projects include due diligence for private equity firms on specialty chemical and materials markets and mapping the impact of energy transition on supply chains.

Data Center Growth in the US

Uday provides an overview of the data center landscape, noting the significant growth in data center capacity in the US Hyperscalers are building larger data centers, often in non-traditional locations like Texas, Oklahoma, and Louisiana, driven by the need for secure energy and power. He explains how large the demand for electricity from data centers is with hyperscalers requiring up to a gigawatt of power, which is challenging to secure. Energy needs between households and data centers are compared to give an example of the scale needed. However, the process of adding new power generation capacity to the grid is slow, with interconnection queues taking multiple years, leading to delays in meeting data center power needs.

Energy Sources and Strategies for Data Centers 

Hyperscalers are pursuing various strategies to secure power, including building data centers in non-preferred locations, partnering with utilities, and investing in early-stage technologies like geothermal and small modular nuclear reactors. Uday discusses the challenges of securing power for data centers, including the need for significant new power generation capacity and the difficulties in connecting to the grid. The conversation highlights the importance of low-carbon energy sources for data centers, with interest in geothermal, nuclear, and hydrogen. ADI Analytics is involved in projects helping tech companies identify sources of low-carbon energy and exploring opportunities for oil and gas majors in the power generation space.

Geothermal Energy and Small Modular Nuclear Reactors

Uday explains the potential of geothermal energy, including traditional hydrothermal resources and advanced geothermal systems (EGS). EGS involves drilling deep into the Earth's surface to extract heat, but the technology is still in development and faces challenges like high costs and engineering complexities. Small modular nuclear reactors (SMRs) are gaining interest due to growing electricity demand from data centers and industrial electrification. The conversation covers the regulatory and permitting challenges for SMRs, the need for innovation in nuclear power, and the potential for these technologies to address energy needs.

Politics and Policy on Energy Projects

The conversation turns to the impact of political and policy decisions on energy projects, including the opposition to renewable energy projects and support for nuclear power. Uday highlights the need for a balanced energy policy that supports all forms of energy, recognizing the unique advantages and challenges of each technology. He emphasizes the importance of allowing markets to determine the most competitive energy solutions, rather than imposing political or regulatory barriers. The discussion concludes with a call for a more cohesive and market-driven energy policy to meet the diverse energy needs of the future.

Timestamps

02:22 Oil and Gas Project Examples 

04:56: Chemical Industry Projects

08:16: Data Center Trends and Challenges 

23:45: Energy Sources and Strategies for Data Centers

25:28: Geothermal Energy and Small Modular Nuclear Reactors 

33:18: Political and Policy Considerations 

Links:

ADI Analytics website: www.adi-analytics.com 

LinkedIn: https://www.linkedin.com/in/turaga/

 

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