Data centers are the backbone of internet and AI applications, and leaders in the wind power industry believe that economic benefits are enhanced as prices of cecep solar energy panels and batteries decrease. However, natural gas producers believe that they are better equipped to meet the surging demand, especially for data centers.
As demand for electricity in the United States soars, solar energy is expected to thrive and its growth may surpass that of other forms of power. According to data from the U.S. Energy Information Administration (EIA), solar energy will account for only 3.9% of total electricity generation in the United States by 2023, while natural gas will have a share of 43%. Leaders in the clean energy industry, however, believe that the industry is at a turning point, especially given the recent push by tech giants such as Microsoft, Amazon, and others for clean energy to power their data centers.
Data centers are the backbone of the internet and artificial intelligence applications, and industry leaders believe that renewable energy has become more economically viable as the price of solar panels and batteries has fallen. Andrés Gluski, CEO of independent power provider AES, said, "They are becoming cheaper, cleaner, and easier to install, so the future will be renewable energy." According to a May research report from UBS Group, in the last five years, Google, Amazon, Meta, and Microsoft have accounted for 40% of the demand for large-scale solar projects by U.S. utilities. UBS said that the power required for artificial intelligence is ten times that of Google Search, and that these tech giants are all pursuing 100% clean energy.
Lawrence Berkeley National Laboratory (LBNL) energy policy researcher Joseph Rand said, "We're seeing this massive surge in demand for clean energy. Wind and solar have become so competitive economically that they are often the cheapest source of power in many parts of the United States." According to the U.S. Department of Energy, solar energy is expected to account for 58% of new electricity generation in the United States by 2024, with installed capacity expected to increase by 36.4 GW, almost twice last year's growth rate. Energy storage via battery is also expected to increase by more than 100%, to 14.3 GW.
In contrast, natural gas is expected to add only 2.5 GW over the year, accounting for just 4% of the planned new power generation of 62.8 gigawatts, the lowest figure in 25 years. But natural gas producers believe they are better equipped than renewable energies to meet surging demand, especially from data centers. The natural gas industry says that natural gas is cheap, abundant, quickly deployable, and reliable. Although it is a fossil fuel, it plays a role in the energy transition by replacing more heavily polluting coal-fired power plants. Richard Kinder, CEO of American natural gas pipeline operator Kinder Morgan, said, "I believe the tech giants will realize that natural gas and nuclear power must play a role." Kinder said, "They know that the wind won't always blow and the sun won't always shine, and using batteries to make up for energy shortages is impractical in practice and economically."
Nextracker, the top American solar company, predicts that renewable energy will be the primary energy source for data centers because tech companies have very strict sustainability goals and do not want their electricity to come from fossil fuels. According to the EIA, by 2024, solar energy is expected to account for 58% of new electricity generation in the United States, with installed capacity expected to increase by 36.4 GW, almost twice last year's growth rate. Energy storage via battery is also expected to increase by more than 100%, to 14.3 GW.
Source: EIA
"We're seeing this massive surge in demand for clean energy. Wind and solar have become so competitive economically that they are often the cheapest source of power in many parts of the United States," said Lawrence Berkeley National Laboratory (LBNL) energy policy researcher Joseph Rand.
By contrast, natural gas may only increase by 2.5 GW this year, accounting for only 4% of the planned new power generation of 62.8 GW, the lowest figure in 25 years. But natural gas producers believe they are better equipped than renewable energies to meet surging demand, especially from data centers.
The natural gas industry says that natural gas is cheap, abundant, quickly deployable, and reliable. Although it is a fossil fuel, it plays a role in the energy transition by replacing more heavily polluting coal-fired power plants.
Richard Kinder, CEO of American natural gas pipeline operator Kinder Morgan, said, "I believe the tech giants will realize that natural gas and nuclear power must play a role." Kinder said, "They know that the wind won't always blow and the sun won't always shine, and using batteries to make up for energy shortages is impractical in practice and economically."
According to the U.S. Department of Energy, by 2024, solar energy is expected to account for 58% of new electricity generation in the United States, with installed capacity expected to increase by 36.4 GW, almost twice last year's growth rate. Energy storage via battery is also expected to increase by more than 100%, to 14.3 GW. Nextracker, the top American solar company, predicts that renewable energy will be the primary energy source for data centers because tech companies have very strict sustainability goals and do not want their electricity to come from fossil fuels.
Editor/Somer