Data centers use huge amounts of electricity to run servers, host websites and power generative AI. The United States, home to more data centers than any other country, is feeling that demand on its grid: higher loads are straining transmission systems and contributing to rising power prices. To meet sharp demand spikes, grid operators and utilities are leaning on fossil-fuel generation, postponing plant retirements or keeping older coal and gas units available.
One striking example is PJM Interconnection, which manages the grid for 13 eastern states including Virginia, a major data center hub. Last year PJM postponed or canceled planned retirements for about 60% of fossil-fuel plants scheduled to close, Reuters reported. Eleven of those were ‘‘peakers’’—units that run only during surges in demand. ‘‘It is clear today, nationally, that electricity demand is outstripping supply — the market reflects this, and generators are responding,’’ PJM spokesman Jeff Shields said. ‘‘We need every single megawatt of energy we can get right now.’’
Some utilities have shifted investment plans toward gas or nuclear to safeguard reliability as data center demand grows. Dominion Energy in Virginia, once committed to 100% renewables by 2045, now plans substantial gas and nuclear investment through 2039. NV Energy in Nevada warned that data center load could jeopardize the state’s goal of 50% renewables by 2030. NextEra Energy said it no longer sees ‘‘a realistic path to achieving actual zero-carbon emissions by 2045.’’
Why gas is attractive
Analysts point to the particular and often unpredictable power needs of data centers as a reason natural gas is favored. Dave Jones, chief analyst at Ember, notes that some AI data centers today can draw as much electricity as 100,000 households; the largest facilities being built may require up to 20 times that. Fast-changing technology makes long-range planning difficult, and many operators view on-site gas generation or grid-delivered gas as the fastest, cheapest and simplest way to secure capacity.
According to the International Energy Agency (IEA), in the U.S. natural gas supplies more than 40% of data centers’ electricity while coal provides about 15%. Globally, the IEA projects that natural gas and coal will supply over 40% of the additional electricity demanded by data centers through at least 2030, meaning new builds are a near-term driver of fossil-fuel generation. Relatively low U.S. natural gas prices—reported at an 18-month low at the time—further favor gas-fired power.
Policy and market headwinds for renewables
Cheap gas, together with tariffs on imported solar panels and other clean-energy equipment, has slowed renewable deployments for data center needs in the U.S. Jones also points to weakened climate policy under the Trump administration and a reduced appetite for aggressive corporate climate commitments in some quarters. Federal energy officials have emphasized coal and nuclear as part of strategies to secure enough power for data center and AI growth; Energy Secretary Chris Wright framed energy choices as trade-offs at a 2025 briefing, saying, ‘‘Climate change, like every other issue, is a trade-off.’’
Where renewables can help
Clean-energy advocates argue those trade-offs aren’t inevitable. Upgrading transmission lines, expanding storage such as batteries, and improving regional planning could provide the flexible, reliable power data centers need without increasing air pollution. Renewables already supply roughly a quarter of electricity for the more than 4,200 U.S. data centers, concentrated in sunnier southern and southwestern states. The IEA expects that renewables and natural gas together will account for more than 65% of data centers’ electricity by 2030, and it notes that in parts of Asia renewables are keeping pace with demand even while coal remains part of the generation mix.
Geopolitical shocks or commodity-price spikes can also accelerate clean-energy choices. Jones says the energy disruptions tied to the U.S.-Israeli war in Iran might push some Asian countries building data center capacity to favor renewables and nuclear over oil and gas.
Local resistance and policy responses
Communities hosting data centers are pushing back as residents worry about higher bills, environmental impacts and stress on local infrastructure. A Quinnipiac University poll found 65% of Americans would oppose a data center near their home, with nearly two-thirds citing electricity costs. In one New Jersey town, officials canceled a planned data center after residents faced average electricity bills that rose nearly 17% in a year. Maine legislators backed a bill to pause new data center construction until November 2027 to study risks to the grid and environment; state Representative Melanie Sachs warned that without careful coordination, ‘‘these centers can place extraordinary demands on electric infrastructure, the surrounding environment and host communities.’’
The tension between rapid digital growth and clean-energy goals highlights a transition challenge: meeting immediate reliability needs often favors existing fossil-fuel options, while longer-term investments in transmission, storage and renewables would reduce pollution and reliance on coal and gas. How utilities, regulators, companies and communities balance those priorities will shape whether the cloud becomes cleaner as demand for data and AI continues to expand.