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The staggering demand for electricity needed to power next-generation technology is forcing the US to rely on yesterday’s fuel source: coal.
Decommissioning dates for the country’s aging fleet of coal-fired power plants are being pushed back as concerns about grid reliability and expectations of rising electricity demand push operators to keep capacity online.
The move to phase out these devices underscores a growing dilemma facing the Biden administration as the US race to lead in artificial intelligence and manufacturing leads to unprecedented growth in energy demand that conflicts with its decarbonization goals. The International Energy Agency estimates that AI ChatGPT uses almost 10 times more electricity than Google Search.
According to S&P Global Commodity Insights, an estimated 54 gigawatts of U.S. coal-fired generation resources, or about 4 percent of the nation’s total electricity capacity, are expected to be retired by the end of the decade, a 40 percent downward revision from last year. citing reliability concerns.
“You can’t replace fossil plants fast enough to meet demand,” said Joe Craft, chief executive of Alliance Resource Partners, one of America’s largest coal producers. “To be the first mover of AI, we’re going to have to embrace keeping what we have.”
Among the operators slowing retirements is Alliant Energy, which last week delayed plans to convert its Wisconsin coal plant to gas from 2025 to 2028. Earlier this year, FirstEnergy announced it was scrapping its 2030 goal to phase out coal citing “resource adequacy concerns”. “.
Consulting firm Grid Strategies forecasts U.S. electricity demand growth of 4.7 percent over the next five years, nearly doubling the projection from the previous year, citing new manufacturing and industrial capacity and data centers used to power everything from artificial intelligence to mining cryptocurrency to the cloud. A study released Wednesday by the Electric Power Research Institute found that data centers will account for 9 percent of U.S. energy demand by 2030, more than double the current level.
The White House has set a goal of achieving a carbon-free energy sector by 2035. Last month, the Environmental Protection Agency finalized controversial rules to phase out coal-fired power plants starting in 2032 unless they install expensive carbon capture systems.
The EPA found in its analyzes that the power sector can meet demand while reducing pollution and providing reliable and affordable electricity under the rules, a spokesman said, adding that the agency “believes the rules are on a solid legal footing.”
Indiana leads a group of 25 states in a lawsuit to stop the EPA rules.
“We need more energy, not less,” Indiana’s Republican governor, Eric Holcomb, told the Financial Times. “We as Americans absolutely cannot afford to lose the war against AI.”
U.S. coal-fired power generation has been in long-term decline, accounting for 16 percent of the nation’s electricity supply last year, up from nearly 40 percent in 2014, according to the U.S. Energy Information Administration.
Seth Feaster, a data analyst at the Institute for Energy Economics and Financial Analysis, cautioned against comparing reports of delayed retirement to the older generation. The EIA projects that U.S. coal-fired power generation will fall another 4 percent this year, and utilization rates at coal-fired power plants will remain low.
“Just moving the retirement date doesn’t mean those plants will be used,” Feaster said. “The coal rail didn’t really move.