Big Tech's AI dreams and Dems' electrification push keep more coal online for longer

According to The Wall Street Journal, power-hungry data centers and Democrats' broad electrification agenda are combining to keep more coal capacity online for longer than originally planned.

technology companies data centerspolicies that drive the adoption of products like electric vehicles (EVs) and heat pumpsand manufacturing activity is rapidly driving electricity demand projections, forcing some utilities to keep coal-fired power plants operating longer than expected, seconds in the WSJ. In 2023, S&P Global Commodity Insights projected that the U.S. would retire about 133,000 megawatts of remaining coal capacity by 2035, but the organization's outlook for 2024 projects that roughly 105,000 megawatts of coal generation will retire this year.

“Utilities across the country are going into panic mode” because they are unprepared for the growing demand for energy, Michelle Solomon, senior policy analyst at Energy Innovation, told the WSJ. Almost all regional US electricity markets raised their five-year annual electricity demand growth projections between 2022 and 2023, doubling the rate in some cases.

According to the WSJ, coal-fired power plants are also benefiting from the fact that green power generation is not starting up fast enough to replace retiring fossil fuel capacity. Coal is a dirtier fuel source than alternatives like natural gas, but the boom in artificial intelligence (AI) and the push by Democrats electrification — an effort to counter climate change — are extending their use.

“The existing fleet [of fossil-fuel generators] it has to stay longer and run more,” Patrick Finn, an analyst at energy-focused consultancy Wood Mackenzie, told the WSJ. This dynamic will likely be a headwind to reducing emissions, which has been a top domestic i international priority for the Biden administration.

The Biden administration has pursued policies that will increase long-term demand for electricity while making it difficult to build cheap, reliable fossil fuel capacity.

In terms of demand, the administration has pushed policies that will substantially increase the number EVs on the road and issued regulations that often favor electrical appliancesin addition to encouraging intensive energy consumption manufacturing while the AI ​​boom takes shape. On the supply side, Biden's Environmental Protection Agency (EPA) has moved to effectively reshape the American power grid. mandate the installation of costly carbon capture and sequestration (CCS) technology for coal plants, requiring those plants to control 90% of their emissions by 2032 if they are to operate beyond 2039 , seconds at the Center for Strategic and International Studies.

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