\u201cThe uncertainty is unnerving\u201d<\/p>\n
The uncertainty is unnerving considering the costs that Americans could wind up paying when it comes to higher utility bills<\/a> and more pollution<\/a>, a recent report<\/a> warns. A transition to cleaner and more affordable energy sources has been making progress<\/a> slowly in the US. That\u2019s in peril unless tech companies and utilities demand more transparency and opt for more renewables like solar and wind energy.<\/p>\n \u201cWhile the AI boom provides exciting opportunities, there are many risks to not approaching energy needs with a deliberate and informed response that takes long term impacts into account,\u201d Kelly Poole, lead author of the report published this month by shareholder advocacy group As You Sow and environmental organization Sierra Club, said in a briefing with reporters.<\/p>\n The nation\u2019s fleet of gas-fired power plants would grow by nearly a third if all of the new gas projects proposed between January 2023 and January 2025, as the generative AI industry heated up, come to fruition. The amount of new gas capacity that utilities and independent developers proposed jumped by 70 percent during that time frame, driven in large part by rising data center electricity demand.<\/p>\n Prior to the generative AI boom, electricity demand had pretty much flatlined for more than a decade<\/a> with energy efficiency gains. But new data centers, souped-up for AI, are a lot more energy-hungry than they have been in the past. A rack of computers in a traditional data center might use 6-8 kilowatts of power \u2014 roughly equivalent to the power used by three homes in the US, Dan Thompson, a principal research analyst at S&P Global, explained in the briefing. AI, however, requires more powerful computer chips to run more complicated tasks. The power required to run one of those high-density racks equals about 80 to 100 homes\u2019 worth of power, or upward of 100 kilowatts, according to Thompson.<\/p>\n \u201cEssentially what you\u2019re looking at is a small town\u2019s worth of power being deployed,\u201d he said.<\/p>\n Why does that matter? Power grids basically function as a precarious balancing act. If power supply can\u2019t meet demand growth, it could lead to higher utility bills and potential outages. On the other hand, overbuilding new capacity risks creating stranded assets that utilities and their customers wind up paying for regardless of whether or not they actually need them in the long term. That\u2019s why it\u2019s so important to try to get an accurate forecast of future demand.<\/p>\n \u201cEssentially what you\u2019re looking at is a small town\u2019s worth of power being deployed.\u201d<\/p>\n And while AI does use a lot of energy, projections for the future get murky. \u201cSpeculators are flooding the market,\u201d the report says, seeking to build and flip data centers. Trying to get ahead of long wait times to connect to the power grid, some of those speculators are requesting power even before they\u2019ve got the capital or customers lined up to ensure they can bring a project to the finish line. There could also be some double or triple counting (or more) going on when it comes to forecasting AI energy demand because of developers approaching more than one utility to get several quotes.<\/p>\n In the Southeast, a major hub for data centers, utilities are projecting as much as four times more demand growth compared to independent analyses of industry trends, according to a report earlier this year from the Institute for Energy Economics and Financial Analysis (IEEFA)<\/a>. Nationally, utilities are preparing for 50 percent more demand growth than the tech industry is expecting, a separate report<\/a> from December 2024 states.<\/p>\n Utilities themselves have recognized this risk on recent earnings calls. Proposed projects trying to connect to the grid \u201cmay be overstated anywhere from three to five times what might actually materialize,\u201d Jim Burke, CEO of Texas-based Vistra Energy, said in a Q1 earnings call<\/a> this year.<\/p>\n Despite the uncertainty, they\u2019re still building out new gas power plants and pipelines to meet that demand. After all, building new infrastructure is one of the most lucrative ways for a utility to increase profits<\/a>. And right now, the Trump administration \u2014 whose campaign was buoyed by oil and gas contributions<\/a> \u2014 is incentivizing reliance on fossil fuels<\/a>. In Louisiana, for example, local utility Entergy proposed building three new gas plants<\/a> to power a giant new Meta data center. The data center is estimated consume as much electricity as 1.5 million homes and lead to 100 million tons of carbon emissions over 15 years.<\/p>\n It\u2019s a stark contrast from the Biden administration\u2019s goal<\/a> of getting the power grid to run on 100 percent carbon pollution-free energy by 2035. The only way to stop climate change in its tracks is to get rid of planet-heating pollution from fossil fuels. Building a rush of new gas infrastructure obviously moves the nation in the opposite direction.<\/p>\n There are solutions to minimize all these risks, As You Sow and Sierra Club point out in their report. Utilities can require developers to disclose the number of other utilities they\u2019ve brought their data center proposal to and how far along they are in finalizing a project. When inking contracts, they can also require long-term service agreements, hike-up nonrefundable deposits, and raise fees for canceling a project.<\/p>\n Tech companies clearly have a big role to play, too, by improving the energy efficiency of their technologies and investing in renewables. For years, tech giants including Amazon, Meta, and Google have been top corporate purchasers<\/a> of renewable energy. Inking those kinds of long-term agreements to build out new solar and wind farms can have even more impact now, counteracting the Trump administration\u2019s rollback of financial incentives<\/a> for renewables, if companies are willing to prioritize their own sustainability goals as much as their AI ambitions.<\/p>\n 0 Comments<\/a>Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates.Justine CalmaClose Posts from this author will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All by Justine Calma<\/a><\/p>\n AICloseAI<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All AI<\/a><\/p>\n AnalysisCloseAnalysis<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All Analysis<\/a><\/p>\n ClimateCloseClimate<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All Climate<\/a><\/p>\n EnergyCloseEnergy<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All Energy<\/a><\/p>\n EnvironmentCloseEnvironment<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n See All Environment<\/a><\/p>\n ReportCloseReport<\/p>\n Posts from this topic will be added to your daily email digest and your homepage feed.<\/p>\n PlusFollow<\/p>\n![\"Justine](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/247148_staff_portraits_2024_AKrales_JUSTINE_2787-1.jpg\"\/)
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