Demand from Data Centers May Keep More Coal Plants Online
Image courtesy of Sean Ellis under Attribution 2.0 Generic Deed, resized to 700 x 391 pixels.
It’s no secret that electricity demand is set to increase in the coming years thanks to the emergence of things like data centers and artificial intelligence (AI). Think about behemoths like Google, Meta, Amazon Web Services, Microsoft, and OpenAI, to name a few.
In fact, a recent report from Bloomberg Intelligence indicates that these 2 factors could account for a whopping 17% of total U.S. electricity demand by 2030! And the DOE recently said that a single data center would require 50 times the electricity of a standard office building. What follows is a look at what the implications are for the U.S. electric utility industry.
Managing the Expected Power Consumption from Data Centers
Methods to satisfy the projected increase in demand have been discussed by utilities and government officials across the U.S., so there is clearly an awareness that this is an issue. Several potential solutions for this dilemma have been proposed, such as nuclear power including small nuclear reactors (SNRs), virtual power plants (VPPs), microgrids, and incremental gas-fired capacity.
However, these options alone will probably not be enough to completely solve the problem. To plug the gap, it is likely that coal-fired plants will need to be kept running longer than expected. For example, Nebraska, Utah, Virginia, and other states, as well as the PJM Interconnection, have argued that keeping coal plants online for longer is necessary while newer forms of generation evolve.
A related approach is that older coal sites could be repurposed as data center campuses. Although the use of coal should diminish over time as more clean energy sources come online, the curve will be extended.
This is especially true in certain states like Virginia, which houses about 50% of all data centers in the U.S. (for example, Amazon Web Services operates 40 facilities in the state). This is why Dominion Energy officials have projected that demand will increase by an eye-popping 85% over the next 15 years.
In the final analysis, data centers are increasingly necessary in our interconnected world, and meeting the energy demand stemming from these facilities will be a challenge for utilities in the years ahead.
