Data centers now power everything from websites to generative AI—and they use enormous amounts of electricity. In the United States, which hosts more data centers than any other country, that rising demand is stressing transmission systems, driving up power costs and pushing grid operators to keep polluting plants online or consider new fossil-fuel or nuclear capacity to avoid outages.
PJM Interconnection, the largest U.S. grid that serves 13 eastern states including Virginia, halted or reversed planned closures for roughly 60% of its fossil-fuel plants last year. Many of those retained units were “peakers” that run only during demand spikes. “It is clear today, nationally, that electricity demand is outstripping supply,” PJM spokesman Jeff Shields told Reuters. “We need every single megawatt of energy we can get right now.”
Utilities that once promised cleaner futures are revising plans to ensure reliability. Dominion Energy in Virginia, which had targeted 100% renewables by 2045, now plans substantial gas and nuclear investment through 2039. NV Energy in Nevada warned that rapid data center growth could jeopardize its goal of 50% renewables by 2030. NextEra Energy in North Carolina said it no longer sees “a realistic path to achieving actual zero-carbon emissions by 2045.”
Analysts say the peculiar scale and timing of data-center demand help explain the turn to fossil fuels. Dave Jones, chief analyst at Ember, notes that some AI facilities already use as much power as 100,000 homes, and the largest centers under construction could require many times that. Because these loads can grow quickly and unpredictably, operators often favor on-site or fast-response gas generation. “The quickest, cheapest, easiest way in the eyes of many companies is to use gas,” Jones said.
The International Energy Agency estimates that in the U.S. natural gas supplies more than 40% of data centers’ electricity and coal about 15%. Globally, the IEA projects natural gas and coal will supply over 40% of the extra electricity data centers need through at least 2030, while renewables combined with gas are expected to provide over 65% of data center electricity by 2030.
Policy and market signals are also shaping choices. Low U.S. natural gas prices and tariffs on imported solar equipment have slowed renewable rollouts for new facilities. Critics point to a broader political shift away from aggressive climate policy under the Trump administration; federal messaging and actions have emphasized boosting fossil fuels and exploring nuclear to sustain industrial and AI ambitions. At a 2025 briefing Energy Secretary Chris Wright framed the trade-offs plainly: “Climate change, like every other issue, is a trade-off,” and posed questions about how to “reindustrialize America” and “win the AI race.”
Clean-energy advocates counter that digital growth and decarbonization need not be mutually exclusive. Investments in transmission upgrades, large-scale battery storage, and coordinated planning between utilities and data center developers can deliver flexible capacity without relying on peaker plants or reversing emissions gains. Renewables already supply roughly a quarter of the electricity for more than 4,200 U.S. data centers, particularly in sun-rich southern and southwestern regions. In parts of Asia, where data center demand could more than double by 2030, renewables are being integrated into energy strategies alongside coal and nuclear.
Geopolitical shocks and fuel-price volatility also affect planning. Jones suggested that the energy consequences of conflicts such as the US-Israeli war in Iran might push Asian countries to reduce dependence on oil and gas and accelerate renewables and nuclear development.
Local opposition is growing, too. A Quinnipiac University poll found 65% of Americans would oppose a data center being built near their home, often citing concerns about higher electricity costs. A New Jersey community recently blocked a planned facility amid grid and environmental worries, and Maine legislators backed a bill pausing new data center construction until November 2027 to study impacts. “If these centers aren’t thoughtfully planned and coordinated, they can place extraordinary demands on electric infrastructure, the surrounding environment and host communities,” said state Representative Melanie Sachs.
The central challenge is balancing rapid expansion of digital infrastructure with climate and community goals. In the near term, gas and coal are meeting urgent needs. Long term outcomes will hinge on policy choices, market incentives, and whether governments and industry commit to the transmission upgrades, storage, renewables build-out and siting coordination needed to decarbonize the data center revolution.
Edited by: Tamsin Walker