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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.
Retirement dates for the country’s aging fleet of coal-fired power plants are being pushed back as concerns over grid reliability and expectations of increased electricity demand force operators to keep capacity online.
The move to phase out these facilities underscores a growing dilemma facing the Biden administration, as the US race to lead in artificial intelligence and manufacturing fuels an unprecedented surge in energy demand that conflicts with its decarbonization goals. The International Energy Agency estimates that the AI application ChatGPT uses nearly 10 times more electricity than Google Search.
An estimated 54 gigawatts of U.S. coal-fired generating assets, about 4 percent of the nation’s total electricity capacity, are expected to be retired by the end of the decade, according to S&P Global Commodity Insights. , 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 the largest U.S. coal producers. “To be a first mover in AI, we’re going to have to embrace preserving what we have.”
Operators slowing retirements include 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 dropping its target for 2030 to phase out coal, citing “resource sufficiency concerns”.
Grid Strategies, a consultancy, predicts US electricity demand growth of 4.7 percent over the next five years, nearly double its forecast from a year ago, citing new manufacturing and industrial capacity and data centers used to power everything from AI to crypto mining. cloud. A study released Wednesday by the Electric Power Research Institute found that data centers will account for 9 percent of U.S. electricity demand by 2030, more than double current levels.
The White House has set a goal of achieving a carbon-free power 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 analysis that the energy sector can meet demand by reducing pollution and providing reliable and affordable electricity under these rules, a spokesman said, adding that the agency “believes the rules are on a strong legal basis.” .
Indiana is leading 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 absolutely cannot as Americans afford to lose the AI war.”
U.S. coal-fired power generation is in long-term decline, accounting for 16 percent of the nation’s electricity supply last year, down 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 equating ratios of retirement delays with older generations. The EIA predicts 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 putting off the retirement date doesn’t mean those plants will be used,” Feaster said. “Coal’s trajectory hasn’t really moved.”