HARRISBURG, Pa. (AP) — As artificial intelligence’s explosive energy demands spark a fossil fuel renaissance, renewable energy allies are trying to ensure that massive data centers also run on climate-friendly sources.
Lawmakers in states with stricter climate policies don’t want data centers to get in the way of their goal of reducing global warming greenhouse gas emissions.
In other states, environmentalists and companies with clean energy goals are using regulatory levers to push forward monopoly utilities that have historically controlled energy supplies and grid access.
The problem clean energy advocates face is that tech giants are demanding electricity at such a pace and scale — some data centers use more energy than a medium-sized city — that wind and solar construction simply can’t keep up.
As a result, the AI boom has sparked the largest construction boom ever Natural gas power plantsnot to mention the efforts by utilities, power plant owners and the federal government to maintain them aging coal-fired power plants who are working beyond their previously planned retirement age.
Legislation on New York Gov. Kathy Hochul’s desk would require data centers of a certain size to meet renewable energy benchmarks starting in 2030 and source at least 90% of their energy from renewables by 2040. The bill’s author, Democratic Sen. Kristen Gonzalez, said the goals are realistic.
“We’re literally talking about the richest companies in the world wanting to build in New York state, and if they have the resources to pour billions of dollars into developing data centers, then they certainly should have the resources to develop renewable energy sources to power them,” Gonzalez told The Associated Press.
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Fears that AI’s energy requirements will undermine climate goals
Michigan, Oregon and Minnesota led the way, passing laws in the last 18 months to protect their existing requirements that utilities use only zero-emission energy sources by 2040.
“That’s a challenge with data centers,” said Bob Jenks, executive director of the Oregon Citizens’ Utility Board, a nonprofit that advocates for lower electric bills and cleaner energy. “Without the data centers, it was a challenge.”
Minnesota and Oregon have directed regulators to ensure that the Energy that powers data centers is consistent with its emissions reduction goals, while Michigan requires hyperscale data centers to meet clean energy demand – 90% within six years – to benefit from the lucrative sales tax exemption.
Bills with similar provisions have been introduced in more than half a dozen states, including California, Illinois, New Jersey, Pennsylvania and Virginia.
“We just can’t do business as usual with demand of this magnitude and facilities of this magnitude because the impact is enormous,” California Sen. John Padilla, who sponsored a bill in his state, told the AP.
Pushing energy suppliers to expand access to the electricity grid
In addition to gas projects, technology giants like Google are investing billions in their own zero-emissions projects such as solar, wind, geothermal, nuclear or battery storage.
Tech giants often face utilities that can’t immediately deliver the kind of power they need. So they — along with environmental groups, energy companies and business groups — are trying to persuade regulators to expand access to the grid, including in states where lawmakers are averse to clean energy mandates.
Greg Robinson, whose Raleigh, North Carolina-based company Aston Power helps procure power for data centers and other large energy users, compared it to FedEx’s growth when the business community decided the U.S. Postal Service was too slow.
“Then companies said, ‘Hey, we’re doing more now, the Postal Service can’t keep up, so maybe there’s an opportunity for a new service,'” Robinson said.
Part of the exercise was to convince utilities — which profit from building power plants and transmission infrastructure — that doing so won’t threaten their profits, clean energy advocates say.
For one thing, utilities can connect a power source for which they don’t have to charge their customers, especially at a time when this is the case Electricity bills are rising quickly in many supply areas.
Additionally, utilities get a large, long-term energy customer who will pay them to expand the grid instead of watching large customers build it independent power sources.
Regulators are giving the green light to renewable energy projects
Last year, clean energy advocates convinced Colorado regulators to order the state’s largest electric utility, Xcel Energy, to create a program that allows large electricity users to build clean energy projects that can be connected to the grid.
In an April regulatory filing, Xcel Energy said it agreed a program could benefit customers and cited two Google projects — one in Nevada to connect 115 megawatts of geothermal energy and one in Minnesota to connect 1,900 megawatts of wind, solar and battery storage — that were approved through similar programs.
Still, clean energy advocates are looming before state regulators over how Xcel Energy plans to structure the program.
Google’s agreement with NV Energy, Nevada’s largest for-profit utility, was approved by regulators last year and is widely considered the first of its kind. Google says it has now approved or considered similar concepts in eight other states, including Indiana, Kansas, Missouri and South Carolina.
The Corporate Energy Buyers Association — whose members include tech giants and major corporations — reached an agreement with Georgia Power, approved by state regulators there earlier this year, to allow its members to build clean energy sources and connect them to the grid.
They are now looking for something similar in North Carolina.
“These innovations are actually some of the most incredible and understated innovations we will see in regulatory and energy procurement,” Nidhi Thaker, senior vice president of policy at CEBA, told the AP. “And I think that the actions that are taken now will actually determine energy policy for the next two to three decades.”
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