Data centers consume vast amounts of energy to run servers and power services from websites to generative AI models. The United States, home to more data centers than any other country, is seeing that extra demand strain transmission grids and raise electricity costs. Grid operators under pressure have turned to polluting fossil fuels to supply power quickly, and in some cases are delaying planned retirements of oil, gas and coal plants or considering nuclear options.
PJM Interconnection, the largest US power grid covering 13 eastern states including Virginia — a major data center hub — postponed or canceled closures for about 60% of its fossil-fuel plants last year. Eleven of the plants stayed online were “peakers,” plants 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 had pledged clean-energy transitions are revising plans. Dominion Energy in Virginia, which had aimed for 100% renewables by 2045, is planning major gas and nuclear investment through 2039 to ensure reliable supply. NV Energy in Nevada warned that data center growth could threaten the state’s target 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.”
Dave Jones, chief analyst at Ember, says the unique and large electricity demand of data centers helps explain the turn to fossil fuels, especially natural gas. Some AI data centers today can use as much electricity as 100,000 households; the largest centers under construction could need 20 times that. Rapid technological change makes future demand hard to predict, and many operators favor on-site or quick-response gas generation. “The quickest, cheapest, easiest way in the eyes of many companies is to use gas,” Jones said.
In the US, the International Energy Agency (IEA) estimates natural gas supplies more than 40% of data centers’ electricity and coal about 15%. Globally, the IEA projects natural gas and coal will provide over 40% of the additional electricity needed by data centers through at least 2030, and that demand from new facilities will be “a significant near-term driver” for gas- and coal-fired generation.
Policy and market signals are also tilting choices. Low US natural gas prices and tariffs on imported solar panels and related tech have slowed renewable expansion for data centers. Observers point to a political shift away from climate-focused policies under the Trump administration: commitments by tech firms to power operations with clean energy have weakened or been delayed. Energy Department messaging and executive actions favor boosting fossil fuels and considering nuclear to sustain industrial and AI ambitions. Energy Secretary Chris Wright framed the challenge bluntly at a 2025 briefing: “Climate change, like every other issue, is a trade-off,” asking how to “reindustrialize America” and “win the AI race.”
Clean-energy advocates counter that the choice need not be fossil fuels versus digital growth. Investments in grid transmission upgrades, battery storage and coordinated planning can supply flexible power without relying on peaker plants or reversing emissions gains. Globally, renewables already play a major role: in the US they provide electricity for roughly a quarter of more than 4,200 data centers, particularly in sunnier southern and southwestern regions. The IEA expects renewables plus natural gas to account for over 65% of electricity used by data centers by 2030. In parts of Asia, where data center demand could more than double by 2030, renewables are becoming integral to energy strategies alongside coal and nuclear.
Geopolitical events and fuel-price volatility can also shift planning. Jones said the energy shock from the US-Israeli war in Iran could prompt Asian countries building out data center networks to avoid oil and gas dependence and prioritize renewables and nuclear.
Local opposition is rising in the US. A Quinnipiac University poll found 65% of Americans oppose a data center near their home, with many citing higher electricity costs. Residents in a New Jersey town recently blocked a planned facility amid environmental and grid concerns; in Maine, legislators backed a bill to pause new data center construction until November 2027 to study risks to the electric grid and environment. “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 debate centers on how to balance fast-growing digital infrastructure and climate goals. While natural gas and coal are fulfilling immediate needs, advocates say strategic grid investments, storage, renewables and careful siting can support AI and cloud growth without locking in higher emissions. The outcome will depend on policy choices, market signals, and whether governments and industry commit to the investments and coordination required to green the data center revolution. Edited by: Tamsin Walker