Power Matters
The military might of the United States has been proven over the past year with strikes on Iran and the more recent audacious kidnaping of Venezuelan President Nicolas Maduro. The prize of the latter being Venezuela’s vast oil reserves. President Trump has recently called for a 50% rise in defence spending in 2027.
In other ‘power’ matters readers will recall that Nvidia’s Jensen Huang was quoted in early November 2025 saying China “will win” the AI race with the US. Also in early November 2025, Microsoft CEO Satya Nadella commented that “the biggest issue we are now having is not a compute glut, but it’s power”, highlighting the inadequate energy infrastructure.
China’s relentless forward strides in battery storage technology means that solar is at the point of becoming cheaper than coal in China. Battery storage technology has made intermittent solar and wind power, when paired with battery storage, a competitive alternative to coal-based power.
In other words, the age-old problem of requiring a reliable fossil fuel as the source of the required ‘baseload’ across the national grid is close to being solved.
China added 427GW of new power capacity in 2024, more than half of all global electricity growth. In the first eleven months of 2025 China’s total power demand increased by 490TWh (Terawatt hours) with solar (328TWh) and wind (120TWh) the principal sources of supply to meet this increased demand.
China’s generation capacity is closing in on 4,000 GW, well over three times the generation capacity of the United States. A cheap and plentiful power source is a massive competitive advantage in the ongoing AI race.
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