Coal- And Gas-Fired Power Plants Have A New Best Friend: Data Centers

Virginia's Clean Economy Act, aiming for 100% renewable energy by 2045, is being undermined by the surge in data centers. Dominion Energy, Virginia's largest utility, cites demand from these data centers to delay retiring coal plants and proposes new gas-fired power plants. This trend is seen nationwide, particularly in the Southeast, where data centers drive over 65% of projected load growth. Utilities are proposing significant new gas power plants, which, along with delayed fossil fuel retirements, disproportionately harm marginalized communities. The projected demand from data centers may be inflated due to speculative interconnection requests. This buildout is costly for ratepayers, who may see monthly bill increases of $40 to $50. Some utilities are exploring solutions like new rate classes for data centers with long-term contract commitments. States are also considering incentives for renewable energy procurement by data centers. However, the 24/7 power needs of data centers limit their appetite for demand reduction. Tech companies are increasingly procuring their own carbon-free power, including nuclear energy, raising concerns about its availability for the broader grid.