Coal- and gas-fired power plants have a new best friend: data centers

AI generated summary

The Virginia Clean Economy Act mandates that Dominion Energy transition to renewable energy by 2045, yet the utility is leveraging the growing demand from data centers to delay the retirement of fossil fuel power plants. Virginia, hosting the largest data center market globally, has seen Dominion cite this demand as justification for maintaining coal and gas plants, including the Clover Power Station, which disproportionately affects low-income communities. Similar trends are emerging across the Southeast, where utilities are planning significant new gas power generation, largely driven by data center growth.

Despite the potential overestimation of energy demand from data centers, utilities are incentivized to build new infrastructure, often passing costs onto consumers. Regulatory measures are being explored to mitigate these impacts, such as new rate classes for high energy users and incentives for renewable energy procurement. However, the persistent demand from data centers poses challenges for climate progress, necessitating stricter regulations and a reevaluation of how utilities project energy needs to avoid further entrenchment in fossil fuel reliance.