The creation of artificial intelligence has done something that the fossil fuel industry could not do for itself. This created the largest construction boom in natural gas-fired power plants. The Associated Press reported on this.
Aging coal plants are also being kept alive past their retirement dates. Utilities, plant owners and the federal government all tried to delay the shutdowns.
The reason is a frivolous account. Some data centers consume more electricity than an average-sized city, and wind and solar power cannot be built at this rate.
States that draw the lines
A number of states are trying to force this issue by law. A bill on New York Governor Kathy Hochul’s desk would raise large data centers to renewable energy standards starting in 2030 and reach at least 90% renewable energy by 2040.
Its author, state Sen. Kristen Gonzalez, thinks the goals are achievable. He argued that these are the wealthiest companies on earth, and firms that can spend billions on data centers can build the power to run them.
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Michigan, Oregon and Minnesota moved first. All three have passed legislation in the past 18 months to defend existing commitments to zero-emissions electricity by 2040.
Michigan tied it to the money, requiring hyperscale data centers to reach 90% clean energy within six years to be exempt from the lucrative sales tax. Similar bills have appeared in California, Illinois, New Jersey, Pennsylvania and Virginia.
An honest confession on the other hand
The most useful quote in a story is not the winning quote. Bob Jenks of the Oregon Citizens Utilities Council acknowledged that the 2040 goal is difficult to achieve with data centers, and difficult without them.
This is the form of the problem. The clean energy goal was already stretching, and AI came along and made it even more out of reach.
Households feel it first. Electricity bills are rising in many utility areas and AI data centers increase energy costs in Rust Belt factories.
Adjustable rear door
Unable to outrun the boom, lawyers chased the rules instead. The tactic is for regulators to allow large energy users to build their own clean generation and feed it into the grid.
Colorado ordered Xcel Energy to create such a program. In April, Xcel acknowledged that it could benefit customers, citing Google projects combining 115 megawatts of geothermal in Nevada and 1,900 megawatts of wind, solar and storage in Minnesota.
Google’s deal with NV Energy is believed to be the first of its kind, and the company says similar deals have been approved or are pending in eight other states. The Corporate Power Buyers Association struck a comparable deal with Georgia Power and is now operating in North Carolina.
Utilities are commercial, not moral. They gain a large long-term customer who pays to grow the network rather than watch the customer independently generate leads and leave.
Why this is the real battle
Network access is where the outcome is decided, not the legislature. There were regulators fast tracking data center network connectionsand whoever controls that queue controls what gets built.
Money chases the same bottleneck Nvidia-backed startups to tackle data center power. Now the binding constraint for AI is energy, not silicon.
Communities retreat independently blocked 75 data center projects worth $130 billion in one quarter. Congress also rotates with the House of Representatives vote on a bill to return data center energy costs to the companies that generate them.
CEBA’s policy chief believes that decisions taken now will set energy policy for two or three decades. This is probably correct, and therefore the technical argument about network interconnection deserves more attention than it has been given.
While the regulations are being written, gas installations are poured with concrete. Concrete tends to win these races.
