HARRISBURG, Pa. (AP) — The rising energy demands of artificial intelligence are renewing interest in fossil fuels. However, supporters of renewable energy are advocating for data centers to be powered by eco-friendly sources. Lawmakers in states with robust climate policies want data centers to help reduce greenhouse gas emissions.
In states with weaker climate directives, environmental groups and corporations with clean energy objectives are using regulations to influence utility companies. These utilities traditionally control access to energy supply and the grid.
Tech companies need power rapidly and extensively—some data centers use more energy than a mid-sized city—making wind and solar deployment lag behind. Consequently, the AI boom is leading to the construction of the most natural gas-fired power plants ever. Additionally, there are efforts to keep aging coal plants running beyond retirement dates.
Legislation before New York Gov. Kathy Hochul intends to impose renewable energy benchmarks on large data centers from 2030. By 2040, these centers would require 90% of their energy from renewables. State Sen. Kristen Gonzalez, a Democrat who authored the bill, stated that the requirements are feasible, as affluent companies planning to build in New York can invest in both data centers and renewable energies.
Concerns about AI’s energy demands leading to climate issues have prompted states like Michigan, Oregon, and Minnesota to enact laws to safeguard pre-existing emissions-free energy requirements by 2040. Bob Jenks, executive director of the Oregon Citizens’ Utility Board, expressed the difficulty in meeting clean energy goals, noting the increased challenge with data centers.
Minnesota and Oregon mandated regulators to ensure data centers’ energy aligns with emissions-reduction goals. Michigan imposed a clean energy standard on hyperscale data centers—90% within six years—to qualify for sales tax benefits.
Similar bills have appeared in California, Illinois, New Jersey, Pennsylvania, and Virginia. California state Sen. John Padilla emphasized the need for a new business model to address oversized demand and facility impacts.
Tech giants, including Google, are investing in zero-emissions projects like solar, wind, and battery storage. Utilities often cannot promptly provide needed power, prompting tech companies, environmental groups, and energy entrepreneurs to push for expanded grid access, even in states resistant to clean energy mandates.
Greg Robinson, from Aston Power in North Carolina, drew a parallel to FedEx’s growth when the U.S. Postal Service couldn’t keep pace with business demands, indicating an opportunity for new services. Clean energy advocates argue that utilities could profit from linking to a power source without charging customers, especially amid rising electricity bills.
Last year, Colorado regulators were persuaded to let Xcel Energy create a program allowing large power users to build clean energy projects connected to the grid. In an April filing, Xcel Energy cited the benefits, referencing Google’s projects approved in Nevada and Minnesota.
A contentious design issue between Xcel Energy and clean energy advocates persists before state regulators. Google achieved regulatory approval for a partnership with Nevada’s largest utility, NV Energy, seen as a pioneering model. The company seeks similar arrangements in other states.
The Corporate Energy Buyers Association, including tech giants, formed an agreement with Georgia Power allowing their members to establish and connect clean energy sources to the grid. A similar effort is underway in North Carolina.
Nidhi Thaker, CEBA’s senior VP of policy, stated that current actions will define energy policy for the next decades. These regulatory and energy procurement innovations are noteworthy yet underappreciated.