Trump and the AI Power Boom Are Putting Utility Climate Goals at Risk
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(Bloomberg) -- Big US utilities’ climate goals are in peril as artificial intelligence turbocharges electricity demand and Donald Trump’s reelection signals policy shifts that would favor fossil fuels.
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These companies all have ambitious targets to cut their carbon emissions, most often to reach “net-zero” by 2050. But the surprising growth in power consumption led by data centers, combined with Republican electoral victories, has some utilities delaying the retirement of coal-burning plants and planning a massive buildout of natural gas generation.
The AI revolution, along with increased demand from new factories and the electrification of everything from vehicles to home heating, has forced power companies to tear up their projections for consumption. Meanwhile, president-elect Trump has repeatedly vowed to “terminate” a suite of federal rules that stifle power-plant pollution and encourage the closure of units generating electricity from coal.
Electric companies are rushing to meet power demand that's suddenly surging after more than a decade of sluggishness. While utilities continue to add renewable power to their systems, some are are reluctant to shutter dirty plants that still can provide reliable electricity.
“Trump will definitely slow down climate progress,” said Andy DeVries, an analyst for CreditSights Inc. The power demand from data centers, however, will have an even bigger impact, he said. “It just comes out to math. If these data center demand figures are anywhere near realistic, you don’t have the ability to retire coal plants.”
Republican control of the White House and Congress will shift US energy policy away from decarbonization goals, according to a report this month from energy consultancy Wood Mackenzie. So far, the utilities that have indicated plans to delay or reconsider climate goals operate primarily in Republican-led states and swing states. President Joe Biden’s already lofty target for a carbon-free power system by 2035 is increasingly in doubt.
“The net-zero targets get sacrificed on the altar of economic growth,” Ryan Sweezey, director of power and renewables for Wood Mackenzie, said in an interview. “If a utility has a corporate net-zero target, and it’s not tied to some state law, it’s really not worth the paper it’s written on.”