by Syd Peng
It’s not hard to sense that something extraordinary is happening in the United States: Digital technology has been neglected by policymakers in the nation’s energy demand.
The evidence can be found in the vast computer-server farms that move and store data and activate everything from smartphones to laptops to digital TVs and make up the backbone of what’s called “the cloud,” providing digital services such as streaming, artificial intelligence and virtual reality. And it can be found in smart manufacturing, ranging from implants for hip joints and teeth to lighter and stronger aircraft parts. Some products are being made from computer-engineered materials that did not exist 10 years ago.
However, there needs to be a political discourse about the fast-growing demand for electricity — in particular for the more than 2,500 warehouse-sized data centers across the country, the biggest infrastructures ever built, each requiring as much as 500 megawatts of electricity. Meanwhile, the erosion of grid reliability has fueled debate about whether the United States can produce enough electricity to run the data centers and keep pace with the fast-growing energy needs of the digital economy. But the more pressing question is whether the U.S. can afford to shut down coal plants, since many utilities have encountered electricity demand levels they did not project for a decade.
The situation was brought home in October when the North American Electric Reliability Corporation said in its long-term reliability assessment that large parts of the country are vulnerable to power shortages this winter. Should that happen, blackouts could incapacitate data centers that are the foundation of the digital economy.
Paradoxically, the Biden administration’s Environmental Protection Agency is forcing the shutdown of coal plants that provide much of the base load power. Never mind that the need for power is projected to rise sharply in the years ahead, not only to meet growing demand from data centers but also from the shift to electric vehicles, increased residential and commercial use and growing electrification in industry.
The Wall Street Journal says electricity demand from data centers could double by 2030. Many states have projected increase in electricity demands in the next 15-20 years. For example, Dominion Power in Virginia expects electricity demand to increase by 85%. In northern California, where Silicon Valley sits, Pacific Gas and Electric expects electricity demand to rise 70%. Arizona Public Service has told regulators it will need 19,000 MW of new resources to meet the need for electricity. Colorado has said new electricity supplies are needed to power additional data centers and two new semiconductor plants. And New York’s grid operator expects electricity demand will more than triple.
Biden’s goal is to power the country with emission-free renewable energy, but the cost of power shortages that might result from a shift to intermittent wind and solar is much too high. So far wind and solar combined supply less than 15% of the nation’s electricity, and it has been slow growing even with so many types of federal subsidizing programs.
What’s more, no new U.S. nuclear plants are being built, and many existing nuclear plants are nearing retirement. Some regions of the country that rely heavily on natural gas for electricity generation are at risk of plant shutdowns due to a shortage of pipeline capacity.
Contrast that with reliable power from coal, which is available around the clock. In fact, coal power is so reliable and easily available, renewal energy proponents are advocating to keep coal power plants as backup for solar and wind power.
For many states, coal is a commodity too precious to lose. Although dozens of coal plants have been closed in recent years due to environmental dictates, there are still about 225 plants operating, producing nearly 20% of the nation’s power.
If ever there was a time for an honest assessment of policy on coal, it is now. And what that reassessment would conclude is that the public interest requires an honest recognition that coal will be needed to help power our digital economy well into the future.
