Recently, US data centers have been shifting back towards coal power in response to steep natural gas prices and escalating energy requirements driven by AI advancements. Financial services firm Jefferies highlights this trend in a recent report, noting that data center operators are eager to expand their power supply to keep up with growing loads expected in the coming years. This demand is causing coal power usage to rise again, with a notable increase in coal generation reported this year.
The reliance on coal raises environmental concerns. While coal plants are being kept operational to meet immediate electricity needs, their extended use threatens local air quality and global climate goals. According to Greenpeace, coal remains one of the most harmful energy sources, intensifying both air pollution and greenhouse gas emissions. A report from Morgan Stanley estimates that data centers worldwide could emit 2.5 billion tonnes of greenhouse gases by 2030 if reliance on coal and other non-renewable sources continues.
In Omaha, a local power company reversed its decision to phase out coal to ensure sufficient electricity supply for nearby data centers. This reversal underscores the tension between rapid data center expansion and sustainable energy use. Meanwhile, renewable sources like wind and solar are economically competitive and could meet energy needs sooner and at lower costs than alternatives like small modular reactors.
However, the current policy environment in the US poses hurdles for clean energy adoption. The administration’s steps to restrict wind and solar projects contrast with evidence supporting the economic benefits of renewables over fossil fuels. Despite these challenges, industry leaders express concerns over maintaining power capacity to support AI developments. The balancing act between meeting immediate power demands and progressing towards greener solutions continues to be a pressing issue.