Just a few years ago, the 100-hour battery startup Form Energy was “yelling into a void” about the benefits of clean, firm power for utilities and power intensive industries.
Then, with the release of ChatGPT in 2022, the artificial intelligence boom took off. And while that didn’t fundamentally change the shape of Form’s pipeline — utilities needed firm capacity before, and they still need it — demands from customers and investors are getting bigger and faster.
Within two years, the company’s head of domestic business development, Sam Simmons, went from trying to explain the value of attributes like reliability and round-the-clock availability to customers who still viewed it as a “premium,” to fielding calls from utilities and developers who wanted gigawatts of capacity as fast as possible. And now, Simmons told the audience at Latitude’s Transition-AI conference last week, those demands are compressing Form’s manufacturing timelines.
There’s increasing pressure to build “less incrementally,” he added, because customers “want gigawatts of this and they wanted it yesterday…And we’re a venture-backed company, so I think push really comes to shove when our investors are calling us and being like ‘hey, there’s a lot of money here!’”
The same dynamic is at play across the spectrum of clean, firm power developers. Thanks to AI’s power demands, everyone from long-duration storage to advanced nuclear companies are facing a changed operating landscape — and find themselves evolving from emerging tech startups to critical infrastructure players.
Dawn Owens, head of development and commercial markets at geothermal developer Fervo, said the company’s conversations with customers and financial backers have changed drastically in the last three years, leading to the company’s current project: a massive system in Utah designed to power data centers, which will be the world’s largest enhanced geothermal project.
“I’ve stopped talking about [‘does geothermal] have cost parity with solar plus a four hour battery?’” Owens told attendees at Transition-AI. Instead, the AI boom has helped Fervo “get in the room and have creative conversations with offtakers about early funding.”
And other financial backers are also more willing to come to the table than they were just a few years ago, she added: “That’s 100% driven by what they’re seeing in the projections of spending from hyperscalers and large AI providers.”
For the power company Constellation Energy, which operates the biggest nuclear fleet in the United States, the shift became apparent about 18 months ago. That’s when the company’s Fortune 100 customers started seeking power to build their own data centers, explained Mike Kramer, VP of data economy strategy. And it’s a shift that has opened doors that were previously closed to the nuclear sector, he added.
“Restarting a nuclear plant is not something that people thought was feasible two years ago, and now we’re doing that,” he said, pointing to Constellation’s deal with Microsoft to restart the remaining reactor at Three Mile Island. That willingness to pay for the specific attributes that a source like nuclear offers, he added, is allowing the sector to scale in a way that could otherwise have taken decades, if it happened at all.
Need for speed
The pressure to move fast that all three companies are feeling is impacting growth strategies across the board, the executives explained.
For one, Constellation is ahead of schedule and under-budget on its Three Mile Island project. The company has already hired 300 workers, many of whom worked on the reactor before it was retired in 2019, Kramer told the audience at Transition-AI. That’s a massive win for data center developers focused on clean power, and for the nuclear sector itself, he added.
“When you think about 835 megawatts of clean, 24/7 generation coming online within a five year window, that’s very difficult to do with any other type of technology right now,” Kramer said.
The company’s bet on existing generation is also on display in its purchase of natural gas and geothermal developer Calpine, back in January. It was a $16.4 billion deal, and one of the country’s largest power sector acquisitions.
“This is a speed, and a certainty of speed, game,” Kramer said. “We know we need to add new resources, but the value of existing generation is very, very important. It’s hard to get new things built. New things are expensive, they take time…and so to have a bunch of access to the things that people need is going to be beneficial.” The deal added 27 GW of generation (mostly natural gas) to Constellation’s portfolio.
But for companies looking to scale less-mature technologies, like Form and Fervo, there just isn’t much capacity out there to take on. And that means that building faster is the only option to meet demand.
A tech company like Form, for example, would generally look to grow incrementally, building a 1.5 MW project, then a 10 MW one, and then scale from there. But there’s increasing pressure to build bigger and faster, Simmons explained: Late last year the storage startup raised more than $400 million to expand its U.S.-based manufacturing, bringing the company’s total amount raised to $1.2 billion.
Fervo, for its part, has grown rapidly from pilot projects with Google to a commercial-scale project that will start delivering electrons to major customers next year with the potential to grow to as much as 2 GW.
Policy shifts
Despite short-term policy concerns related to tax credits, tariffs, and federal project funding, all three executives expressed confidence in long-term fundamentals.
“There’s still a need for firm power. There’s still going to be load growth. AI’s not going anywhere,” Simmons said. “So we still see our customers planning and transacting.”
Kramer framed the urgency in national security terms: “We have to meet this moment. We can’t just sit back and let other countries take over the AI conversation.” This sense of urgency, he argued, is driving innovation in regulatory approaches and financing structures that might otherwise take years to develop.
But in the near-term, the policy chaos that has come with the Trump administration is still poised to have an impact. Fervo’s 650 MW of existing power purchase agreements are potentially at risk from policy changes, Owens said — even despite some initial hope that geothermal would be insulated because of Energy Secretary Chris Wright’s demonstrated support for the technology, including via his fracking company Liberty Energy’s investments in Fervo in particular.
“Many of those have change of law provisions that would be triggered,” she said, pointing to potential changes in tax credit availability. “The PPA either goes away or it goes up in price, and nobody wins in that scenario. Not us, not the customer, not the ratepayer, nobody.”
That said, there’s also potential upside to the constantly-shifting policy landscape in the U.S. at the moment: Investors want to build quickly before the next series of changes lands.
“It’s accelerating the desire from our investors for us to deploy fast while we know what the rules are,” said Owens.
However, while that may be positive news in the short term, Owens said that in the long-term that uncertainty will cause the U.S. to lose business from capital-intensive projects with 20-year payback periods (like most clean firm power generation).
“But beyond that three-to-five-year timeframe, it’s creating a desire for us to diversify outside of the United States faster,” she added.
