As gas plants rise to power AI data centers, renewable energy allies fight for cleaner alternatives
The rapid energy demand from AI data centers is prompting a surge in fossil fuel power plant construction. In response, lawmakers and clean energy advocates across multiple US states are pushing for legislation and regulatory changes to ensure data centers are powered by renewable sources and that utilities expand grid access for clean energy projects.
The escalating energy demands of artificial intelligence are driving a significant increase in natural gas-fired power plant construction, and even extending the life of some coal plants, prompting renewable energy advocates to push for cleaner alternatives for data centers.
Lawmakers in states like New York are considering legislation that would mandate data centers over a certain size to meet renewable energy benchmarks, aiming for 90% renewable energy by 2040. Michigan, Oregon, and Minnesota have already enacted laws requiring utilities to use emissions-free energy, with Michigan specifically requiring hyperscale data centers to meet a 90% clean energy threshold within six years to qualify for sales tax exemptions. Similar legislative provisions are emerging in California, Illinois, New Jersey, Pennsylvania, and Virginia.
Tech companies, while investing in their own zero-emissions projects, often encounter utilities unable to promptly supply the necessary clean power. Consequently, they, along with environmental groups, are working to persuade regulators to expand grid access for clean energy projects. For example, Colorado regulators ordered Xcel Energy to create a program allowing large energy users to connect clean energy projects to the grid, a model successfully utilized by Google in Nevada and Minnesota, and by the Corporate Energy Buyers Association with Georgia Power.
These regulatory and policy innovations are seen as critical steps to shape energy policy for decades, ensuring that the growth of the AI industry aligns with climate goals.