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ROSS CLARK
Keir Starmer’s grand AI ambitions won’t get anywhere until Britain brings down its sky high energy costs
AI has a huge appetite for energy
THE acronym AI used to be associated not with Artificial Intelligence but with men in boiler suits driving around farms artificially inseminating cattle.
How appropriate, given that the Government’s sudden enthusiasm for AI looks to be a load of old bull.
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According to Keir Starmer, launching his AI Opportunities Action Plan yesterday, Britain is going to be transformed into an “AI superpower”.
We are going to have “AI growth zones” and government-funded super computers.
Unfortunately, Starmer doesn’t seem to have noticed his government is simultaneously undermining the very industry he is trying to promote.
AI has a huge appetite for energy, thanks to the vast number of computations which have to be performed rapidly.
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According to the International Energy Agency, AI, cryptocurrency and data centres between them accounted for two per cent of global energy demand in 2022 — about as much as is consumed by Germany or Brazil.
To train a single AI model uses as much energy as 100 US homes in a year.
Why, then, would anyone running an AI business favour Britain, which currently has the highest commercial electricity prices in the world?
In 2023, commercial customers were paying an average of 25.85p per kilowatt-hour for their electricity, compared with the equivalent of 17.71p in Germany and just 6.48p in the US.
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That is a vast saving if you are running an AI business.
High energy prices have already helped kill off much of our manufacturing industry.
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They are contributing to the demise of the chemical industry, which Ineos chief Jim Ratcliffe warned yesterday is unlikely to survive in Britain.
Our primary steel industry and fertiliser industries have already been ravaged.
Why, then, does the Prime Minister think it will be any different with AI?
As it happens, Britain already has a sizeable AI industry worth £14billion a year and employing 64,000 people, all of which has happened in spite, rather than because, of government policy.
But if companies cannot get cheap power they are going to have a huge incentive to move operations abroad.
It isn’t just the price of energy, either.
Data centres in West London have already taken up so much of the grid capacity that housing developers have warned they will be unable to build new homes there for the next decade, when hopefully the grid will be beefed up.
We are in this position because Britain has been merrily closing down coal-fired power stations without a viable energy system to replace it.
The inability of intermittent wind and solar farms to fill the gap means we are importing record amounts of power: 16 per cent of what we consumed last year.
Until we have a sensible energy policy we won’t be able massively to expand our AI industry, however much enthusiasm Starmer tries to summon.
But you can forget that happening in the near future.
Energy Secretary Ed Miliband is more obsessed than ever in meeting his target to decarbonise Britain’s electricity supply by 2030 and Chancellor Rachel Reeves has been in China opening the way for Chinese companies to sell us yet more solar panels and wind turbines to feed our green energy rush.
As former MI6 chief Sir Richard Dearlove warned yesterday, our reliance on Chinese-made kit risks handing control of our energy system to a potentially hostile power.
Not only that, materials used in the Chinese solar panel industry have been linked with forced labour in the Uyghur region.
We have a government that is preoccupied with making gestures over a slave trade that ceased 200 years ago, but seems happy to tolerate the import of products made in slave-like conditions in the present day.
Idea is mad
The Government’s attempt to address the issue of electricity use in the AI industry is laughable.
Its Opportunities Action Plan proposes to use small modular nuclear reactors to power the industry.
SMRs, which generate around a tenth of the power of a large station like Sizewell B, could in future form an important part of our energy infrastructure, yet almost no one expects them to be up and running before the mid-2030s.
The AI industry needs power now, not in a decade’s time.
Even more bizarre is the Government’s decision to base the first of its AI growth zones at Culham in Oxfordshire, in the hope that “sustainable energy like fusion can power our AI ambitions”.
Culham is the home of the Government’s research facility into nuclear fusion, where energy is generated by fusing together two atoms rather than splitting them apart, as in conventional nuclear power plants.
Trouble is that scientists at Culham and elsewhere have been trying to build a viable fusion plant for the past 60 years, so far without success.
The idea they are suddenly going to have a breakthrough in time to feed a power-hungry AI industry is mad.
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The reality is that Starmer’s great British AI industry is going to rely on intermittent power from Miliband’s windmills, and bribed to turn off its computers when the wind isn’t blowing.
Good luck with trying to build a world-beating business on the back of that.
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