By Greg Gorman • ggorman@embargmail.com
On January 23, 2025, President Trump signed an order (EO 14179) to retool America’s policy for AI development. Trump’s order focused on speed, deregulation, and global AI dominance. It removed Biden-era safeguards for worker protection, cybersecurity, product safety, and fairness in AI contracting. Now growing rapidly, the AI industry will be an enormous consumer of electricity. It must be reliant on clean energy to mitigate the threat of global warming.
“AI data centers have two unique energy-related features compared with traditional ones: They have an enormous appetite for electricity, with generative AI [able to create new text, images, code, etc.] consuming 10-30 times more energy than task-specific AI, and they require advanced liquid-based cooling solutions, as they generate substantially more heat than traditional [cloud or web-hosting] operations,” according to the American Action Forum, an independent policy advisory body.
Power demand for data centers in the United States is expected to reach 606 terawatt-hours (TWh) by 2030, up from 147 TWh in 2023. AI data centers used 3.7% of total US electricity in 2023. By 2030, data centers will account for 11.7% of total US power demand. The United States needs to quickly develop new sources of energy and increase generation capacity by upgrading existing infrastructure.
The competitive advantage for quick and affordable development of new sources belongs to renewable energy. “While solar and onshore wind farms normally take less than two years to build, gas-fired power plants usually take as many as four years to become operational, and can also require construction of gas pipeline infrastructure,” according to the World Resources Institute.”
On average in 2024, solar power was 41% cheaper than the lowest-cost fossil fuel power, and onshore wind was 53% cheaper than fossil fuel–based generation. Onshore wind remained the most affordable new source of electricity at $0.034 per kilowatt-hour (kWh), with solar following at $0.043/kWh. Clearly, renewables are the most scalable and affordable means to meet rapidly growing energy demand.
AI data centers and next-generation chip foundries demand vast, uninterrupted flows of energy, and fossil fools are quick to point out the intermittent (fluctuating) nature of sun and wind power. Yet, fossil fuel power stations experience outages, such as those in Texas during the 2021 Ground Hog Day blizzard. The recent blackout in Spain is attributed to conventional power plants using coal, gas and nuclear that failed to help maintain an appropriate voltage level. Denmark, whose primary energy source is renewable, has a grid reliability of 99.9%. This corresponds to an average consumer being without electricity for around 40 minutes a year. Yet, in practice, many consumers never experience an outage during the year.
The discussion of providing reliable energy needs to include energy backup. Small data centers rely on gasoline or natural gas generators in the event of blackouts, but large AI data centers will require grid-scale type energy storage systems. Google partnered with Energy Dome to provide long-duration CO2 batteries for 24/7 carbon-free data centers across Europe, the Americas, and the Asia-Pacific. California-based B2U Storage Solutions is building a new battery energy storage facility east of San Antonio, Texas, that will be powered by used EV batteries. Energy storage will play an important role in the age of AI.
Finally, the aging grid wasn’t designed to accommodate today’s rising household electricity needs and electric vehicles, let alone the massive demands from data centers. Utility companies must invest in costly upgrades to increase transmission capacity and to integrate power sources. Those costs, which are ultimately passed on to customers, could cause electric bills to increase as much as 70% by 2029, according to the Jack Kemp Foundation.
“For homeowners in data center-heavy regions, home solar panel systems offer a way to take control and avoid falling prey to impending electricity rate increases. By generating electricity independently, solar-equipped homes can reduce or eliminate their electric bills, insulating themselves from rising rates tied to utility infrastructure upgrades,” EnergySage, an online solar energy marketplace, wrote in a recent article about data center growth.