By Syd S. Peng, Charles E. Lawall Chair of Mining Engineering, Emeritus, West Virginia University
January 9, 2024 - It's not hard to sense that something extraordinary is happening in the United States. A belief that digital technology is nonessential may be making way for a new measure of its worth -- the idea that it is playing a major role in bolstering the nation's economy.
The evidence can be found in the vast computer-server farms that move and store data and activate everything from smartphones to laptops and digital TVs and make up the backbone of what's called "in the cloud," providing digital services such as streaming, artificial intelligence and virtual reality. And it can be found in smart manufacturing, in which advances in computerized technology have revolutionized the fabrication of products, 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 ten years ago.
However, there needs to be a political discourse about the fast-growing demand for electricity -- in particular from 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, the amount of power used by a large steel mill. 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 forcefully in October when the organization responsible for overseeing the nation's electricity reliability warned there might not be enough electricity supply to meet rising demand. 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, with wide impacts on jobs, economic development and energy production.
The impact has become evident in Virginia, where 75 data centers have been built since 2019, with electricity demand jumping 7%. Home to Amazon, Google and dozens of other technological giants, Virginia has over 275 data centers, more than any other place in the world. With the explosion in information communications technologies, otherwise known as the digital economy, Dominion Power expects electricity demand in Virginia to increase by 85% over the next 15 years. Virginia is not alone.
In northern California, home of Silicon Valley, Pacific Gas and Electric expects electricity demand to rise 70% in the next 20 years. Arizona Public Service has told regulators it will need 19,000 megawatts of new resources to meet the need for electricity over the next 15 years. Echoing the power problems other states are experiencing, Colorado has said new electricity supplies are needed to power additional data centers, two new semiconductor plants, and a growing population -- supplies equal to the power production of the entire fleet of Xcel Energy. New York's grid operator, NY150, expects electricity demand will more than triple installed generating capacity by 2040. And in Texas, the nation's largest electricity producer, power sales grew 5 times the national rate for the past decade -- and are rising.
According to the International Energy Agency (EIA), the world's digital system uses as much as 340 terawatt-hours of electricity per year. That's about 10% of the world's electricity -- equal to the combined power production of Germany and Japan. In fact, more money is being spent to increase the capacity of the system than all the world's utilities spend annually to produce electricity and distribute it.
President 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. Even with generous government subsidies, wind and solar combined supply less than 15 percent of the nation's electricity. What's more, no new U.S. nuclear plants are being built, and many existing nuclear plants are nearing retirement. And 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 plant as backup for solar and wind powers.
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 still are 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.