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The enormous electricity demand for next-generation technologies is forcing the United States to depend on a fuel of yesterday: coal.
The dates for the closure of the country's ageing coal-fired power plants are being pushed back as concerns about grid reliability and expectations of rapidly rising electricity demand force operators to maintain their capability on the grid.
The postponement of the phasing out of those plants underscores a growing dilemma facing the Biden administration because the U.S. race for leadership in artificial intelligence and manufacturing results in unprecedented growth in electricity demand that clashes with decarbonization goals. The International Energy Agency estimates that the AI application ChatGPT uses nearly 10 times as much electricity as Google Search.
An estimated 54 gigawatts of coal-fired power plants within the U.S., about 4 percent of the country's total electricity capability, will likely be retired by the tip of the last decade, in accordance with S&P Global Commodity Insights, citing reliability concerns. That's 40 percent lower than last 12 months.
“You can't replace fossil-fuel power plants fast enough to satisfy demand,” said Joe Craft, CEO of Alliance Resource Partners, considered one of the most important coal producers within the U.S. “To prepared the ground in AI, we’d like to deal with preserving what we’ve.”
Among the operators delaying their shutdowns is Alliant Energy, which last week pushed back plans to convert its Wisconsin coal-fired power plant to gas from 2025 to 2028. Earlier this 12 months, FirstEnergy announced it was abandoning its goal of phasing out coal by 2030, citing “resource availability concerns.”
Consulting firm Grid Strategies predicts U.S. electricity demand will grow 4.7 percent over the following five years, doubling its forecast from last 12 months. It cites latest manufacturing and industrial capability in addition to data centers used for every part from AI to crypto mining to the cloud. A study released Wednesday by the Electric Power Research Institute found that data centers will meet 9 percent of U.S. electricity demand by 2030, greater than double current levels.
The White House has set a goal of making a carbon-free energy sector by 2035. Last month, the US Environmental Protection Agency (EPA) passed controversial rules to phase out coal-fired power plants starting in 2032 unless they install expensive carbon capture systems.
The EPA's evaluation concluded that by following these rules, the energy sector could meet demand while reducing pollution and providing reliable and inexpensive electricity, a spokesman said. The agency believes the foundations have a solid legal basis.
Indiana leads a bunch of 25 states that plan to file a lawsuit difficult the EPA regulations.
“We need more energy, not less,” Indiana Republican Governor Eric Holcomb told the Financial Times. “We as Americans absolutely cannot afford to lose the AI war.”
In the United States, coal-fired power generation has been on a long-term decline. According to the U.S. Energy Information Administration, coal accounted for 16 percent of the country's electricity supply last 12 months, down from nearly 40 percent in 2014.
Seth Feaster, an information analyst on the Institute for Energy Economics and Financial Analysis, cautions against equating reports of delays in coal-fired power plant retirements with increased electricity generation. The EIA forecasts that electricity generation from coal-fired power plants within the U.S. will fall one other 4 percent this 12 months and coal-fired plant utilization will remain low.
“Simply postponing the closure date doesn’t mean that these plants will likely be used,” Feaster said. “The trajectory of coal has not likely modified.”
