Some analysts pointed out that behind the power shortage caused by the development of AI, increasing clean energy (solar energy, wind power, etc.) power generation has become an important way out.
The Zhitong Finance App learned that recently, “the development of AI technology will cause a 'power shortage' problem” has attracted widespread attention. According to a report by market research agency Factorial Funds, OpenAI's Wensheng video model Sora needed 720,000 H100 pieces during the peak period, which was enough to crash power grids in seven states. Huatai Securities Research Report predicts that under an optimistic scenario, the electricity consumption of AI in China and the US in 2030 will reach 20%/31% of the electricity consumption of the entire society in 2022.
Since this year, AI boss' speeches have all had a common theme: lack of electricity. Not long ago, in a public speech, Nvidia founder Huang Renxun said, “The end of AI is photovoltaics and energy storage. Don't just think about computing power; if you only think about computers, you need to burn the energy of 14 planets.”
OpenAI's founder Sam Ultman made a similar sentiment. Ultraman has publicly acknowledged that the AI industry is heading towards an energy crisis. At the World Economic Forum annual meeting held in Davos, Switzerland, Ultraman warned that the next wave of generative artificial intelligence systems will consume far more electricity than expected, and that energy systems will be difficult to cope with. Future AI technology depends on energy, and we need more photovoltaics and energy storage.
Not long ago, Musk predicted at the Bosch Connected World 2024 conference, “The next thing that will run short will be electricity. By next year (2025), we won't have enough electricity to run all of our chips.” This is not the first time Musk has predicted that artificial intelligence computing power will face a shortage of transformers and electricity supply. Musk and his xAI team have mentioned this issue at least three times since 2023. In August of last year, Musk warned that the serious consequences of electricity shortages could hinder the development of energy-intensive technologies such as artificial intelligence.
So how to solve the energy crisis facing AI? Some analysts pointed out that behind the power shortage caused by the development of AI, increasing the generation of clean energy (solar energy, wind power, etc.) has become an important way out.
Recently, the American Clean Energy Association (ACP) released the “2023 Clean Energy Annual Market Report”. In 2023, the US added 33.84 GW of clean energy installed capacity, a record high, an increase of 7.9 GW over 2022, an increase of 3.8 GW over the record set in 2021, an increase of 13%. Among them, the new installed capacity of photovoltaics and energy storage reached record highs, adding 19.6 GW and 7.9 GW respectively, accounting for 58% and 23% of the new installed capacity, respectively.
China also attaches great importance to the development of clean energy. This year's government work report suggests actively and steadily promoting carbon neutrality at carbon peaks. Firmly carry out the “Ten Major Carbon Peak Actions”. Improve carbon emission statistics, accounting and verification capabilities, establish a carbon footprint management system, and expand the coverage of the national carbon market industry. Further advance the energy revolution, control fossil energy consumption, and accelerate the construction of a new energy system. Strengthen the construction of large-scale wind power photovoltaic bases and delivery channels, promote the development and utilization of distributed energy, develop new types of energy storage, promote the use of green power and international mutual recognition, give full play to the underpinning role of coal and coal-fired electricity, and ensure energy demand for economic and social development.
Huatai Securities believes that the development of AI will further boost the global power infrastructure cycle, and that the launch of domestic data centers will also bring growth opportunities for high-quality domestic suppliers in various sectors. I am optimistic about the development opportunities of the following industries: 1) Local suppliers with excellent data center power supply and distribution will benefit from the launch of domestic demand. 2) Clean and stable power supply equipment and operators. 3) Electrical equipment overseas companies that benefit from a further improvement in the electrical equipment cycle.
The China Post Securities Research Report points out that while the world continues to promote energy transformation, requirements for territorial manufacturing are also increasing. Regions including the US, India, and Europe have all adopted various subsidies and restrictions to encourage the development of localized PV production capacity. The future global layout will be a new round of tests for Chinese photovoltaic companies, and leading manufacturers are expected to accelerate expansion with capital, management, and channel advantages.
According to the CITIC Securities Research Report, the global wind power installation is expected to maintain steady growth. Among them, the offshore wind power market is growing at an impressive rate, and the long-term space is huge. Against the backdrop of domestic sea breezes picking up at an accelerated pace and overseas sea breezes entering a new stage of growth, it is expected that offshore and overseas will continue to be the main investment line for the wind power industry in the next two years; at the same time, under the trend of larger units and cost reduction and efficiency, some new products and technologies will also be applied.
Concepts related to Hong Kong stocks:
Datang Power Generation (00991): The company is mainly engaged in the power generation business of coal power, hydropower, photovoltaics and wind power. Recently, Datang Power released its 2023 annual report. As of the end of the reporting period, the company had an installed capacity of 73290.964 megawatts and a new generator set capacity of 4799.2 megawatts, including 577 megawatts for thermal power engines, 2047.5 megawatts for wind power projects, and 1604.7 megawatts for photovoltaic projects. The proportion of installed low-carbon clean energy had further increased to 37.75%.
China Resources Electric (00836): In late March, Huatai Securities released a research report stating that maintaining China Resources Electric's “buy” rating, the net profit is expected to be 15.2 billion, 17.1 billion, and 20.2 billion yuan from 2024 to 26. It also believes that its profitability is excellent, and the target price was raised from HK$23.89 to HK$25.33. Furthermore, the bank expects to add 10 GW of new energy installed capacity this year.
Xinte Energy (01799): The company focuses on the development of photovoltaic and wind power resources. It has successively built more than 5,000 off-grid and grid-connected new energy power plants, with an installed capacity of more than 16 GW. From 2015 to 2017, the total number of PV grid-connected installations ranked first in the world for three consecutive years, and ranked second in the world and number one in China in 2018.
Xintian Green Energy (00956): Xintian Green Energy announced its 2023 results, with operating revenue of approximately RMB 20.082 billion, up 9.27% year on year; net profit attributable to shareholders of listed companies was approximately RMB 2.207 billion, a decrease of 3.71% year on year; basic earnings per share were 0.51 yuan, with a cash dividend of RMB 2.14 per 10 shares. The wind power and photovoltaic power generation business achieved a power generation capacity of 14.254 billion kilowatt-hours and a sales volume of 13.930 billion kilowatt-hours. The total gas transmission volume of the natural gas business was 5.114 billion cubic meters, an increase of 13.63% over the previous year, and the gas sales volume was 4.503 billion cubic meters, an increase of 15.93% over the previous year.