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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--As Donald Trump has now been declared winner of the 2024 presidential election race, the reactions of energy groups depend on their type of power. Fossil fuels are fired up, renewables are reluctant. But even renewable groups have some members that are at least relatively unconcerned.
The rise of large data centers that are pulling about 4% of U.S. power demand means that all power sources--green, gray, brown, and otherwise--are on call to supply this need. Much of that funding is secular, beyond the direct reach of any administration, although some renewable power companies are receiving some U.S. Department of Energy grants.
Data center operators are looking to both the general grid and to individual supplies of solar, geothermal, wind and nuclear as non-fossil fuels, along with natural gas, to power these behemoths.
Mixed Greens in the Market
Some in the clean energy sector are cautiously optimistic. The American Clean Power Association's Chief Executive Officer Jason Grumet was quoted as saying, "Our industry grew by double digits each year under the first Trump Administration and has accelerated this rate of progress since," and that he was looking forward to working with Trump because renewable power is also "American made," implying a connection to energy independence usually associated with the domestic oil and gas industry.
Investors are less positive, as shares of some top renewable energy companies traded down on Wednesday. The Motley Fool reports that First Solar (NASDAQ:FSLR) (Tempe, Arizona), Sunnova (NYSE:NOVA) (Houston, Texas) and Plug Power (NASDAQ:PLUG) (Latham, New York) were down Wednesday morning, by -10.99%, -52.05% and -21.91% respectively.
On the campaign trail Trump did promise to cancel all unspent Inflation Reduction Act dollars as "too expensive," which would create waves of closures and layoffs in states and congressional districts hosting companies promised those funds.
Data Center Projects
Conventional Power Grid and Fossil Fuels
In October, Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) announced plans to spend $1 billion on a data center east of Columbus, Ohio, in Licking County.
And they are not alone. Licking County is already becoming home to data centers from Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California), Amazon Web Services, Google and Quality Technology Services (QTS) (Overland Park, Kansas). And Intel (NASDAQ:INTC) (Santa Clara, California) is building two semiconductor fabrication plants in the county. Some projects still await local approval, which they are generally expected to receive.
To assure funding for grid expansion, the local utility, AEP Ohio, has requested the Public Utilities Commission of Ohio to let them add tariffs on the new data centers, asking that they be required to pay for at least 85% of the energy they want infrastructure for each month, whether they use it or not (also known as "take or pay"). A group of data center owners has proposed a slightly lower 75% tariff.
The fuel mix for American Electric Power (NASDAQ:AEP) (Columbus, Ohio) as of 2023 was listed on its website as 42% coal, 27% natural gas, 8% nuclear, 21% wind/solar/hydroelectric and 2% demand-reducing response. Their goal is to be 50% wind/solar/hydro by 2033.
Natural Gas-Powered Data Centers in Virginia: Virginia-based Balico LLC is planning to power multiple data centers with a natural gas-fired plant in Pittsylvania County, Virginia. The proposed center would occupy 2,200 acres.
In the Permian Basin of Texas and southwest New Mexico, and in natural gas regions such as Utica and Marcellus, many companies with data centers and bitcoin mining centers have in recent years partnered with energy companies to buy natural gas at the wellhead to fuel generators powering the computers and the climate control they require.
Clean Energy
Google Geothermal: in 2023 began operating a geothermal plant built by Fervo Energy (Houston), in a partnership agreement, to power a data center in Nevada. Fervo has received several government grants. In 2024 Energy Secretary Jennifer Granholm announced that Fervo would share $60 million in U.S. Department of Energy funds with two other companies. Its purpose is to fund pilot projects to determine the economic viability of geothermal "for reliable electricity production."
Nix for Amazon Nuclear: On Monday, the Federal Energy Regulatory Commission (FERC) denied Amazon's request to expand its colocated load at an Amazon Web Services data center connected to the Susquehanna nuclear plant in Luzerne County, Pennsylvania. The agreement would have allowed the 2.5-gigawatt (GW) plant to serve Amazon "behind the meter." The FERC was concerned that the agreement would have raised electricity prices for consumers and compromised the grid's reliability.
Yes for Amazon's SMR Funding: In October, Amazon announced it was joining a $500 million financing round for small modular reactor (SMR) startup X-energy to build in excess of 5 GW of "mini nuclear" technology to support data centers over the next 15 years.
Nuclear Waste Issues
For years nuclear energy was an anathema, mainly because of world-shaking meltdowns in Chernobyl, Three Mile Island, and Fukushima, along with the difficulty in dealing with waste that is toxic for centuries, and exorbitant construction costs for new facilities. New developments have made nuclear somewhat safer and more economical, but no one has yet solved the NIMBY (not in my back yard) problem of disposal. As with many alternative fuels, this one comes with its own dark side.
Trump Cards
Much of what a Trump II administration could accomplish will depend on the balance in Congress, since the Senate has been declared for the Republicans. A Democrat congress could limit the president's options for changing energy policy, leaving more of it intact than was promised during the campaign.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
The rise of large data centers that are pulling about 4% of U.S. power demand means that all power sources--green, gray, brown, and otherwise--are on call to supply this need. Much of that funding is secular, beyond the direct reach of any administration, although some renewable power companies are receiving some U.S. Department of Energy grants.
Data center operators are looking to both the general grid and to individual supplies of solar, geothermal, wind and nuclear as non-fossil fuels, along with natural gas, to power these behemoths.
Mixed Greens in the Market
Some in the clean energy sector are cautiously optimistic. The American Clean Power Association's Chief Executive Officer Jason Grumet was quoted as saying, "Our industry grew by double digits each year under the first Trump Administration and has accelerated this rate of progress since," and that he was looking forward to working with Trump because renewable power is also "American made," implying a connection to energy independence usually associated with the domestic oil and gas industry.
Investors are less positive, as shares of some top renewable energy companies traded down on Wednesday. The Motley Fool reports that First Solar (NASDAQ:FSLR) (Tempe, Arizona), Sunnova (NYSE:NOVA) (Houston, Texas) and Plug Power (NASDAQ:PLUG) (Latham, New York) were down Wednesday morning, by -10.99%, -52.05% and -21.91% respectively.
On the campaign trail Trump did promise to cancel all unspent Inflation Reduction Act dollars as "too expensive," which would create waves of closures and layoffs in states and congressional districts hosting companies promised those funds.
Data Center Projects
Conventional Power Grid and Fossil Fuels
In October, Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) announced plans to spend $1 billion on a data center east of Columbus, Ohio, in Licking County.
And they are not alone. Licking County is already becoming home to data centers from Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California), Amazon Web Services, Google and Quality Technology Services (QTS) (Overland Park, Kansas). And Intel (NASDAQ:INTC) (Santa Clara, California) is building two semiconductor fabrication plants in the county. Some projects still await local approval, which they are generally expected to receive.
To assure funding for grid expansion, the local utility, AEP Ohio, has requested the Public Utilities Commission of Ohio to let them add tariffs on the new data centers, asking that they be required to pay for at least 85% of the energy they want infrastructure for each month, whether they use it or not (also known as "take or pay"). A group of data center owners has proposed a slightly lower 75% tariff.
The fuel mix for American Electric Power (NASDAQ:AEP) (Columbus, Ohio) as of 2023 was listed on its website as 42% coal, 27% natural gas, 8% nuclear, 21% wind/solar/hydroelectric and 2% demand-reducing response. Their goal is to be 50% wind/solar/hydro by 2033.
Natural Gas-Powered Data Centers in Virginia: Virginia-based Balico LLC is planning to power multiple data centers with a natural gas-fired plant in Pittsylvania County, Virginia. The proposed center would occupy 2,200 acres.
In the Permian Basin of Texas and southwest New Mexico, and in natural gas regions such as Utica and Marcellus, many companies with data centers and bitcoin mining centers have in recent years partnered with energy companies to buy natural gas at the wellhead to fuel generators powering the computers and the climate control they require.
Clean Energy
Google Geothermal: in 2023 began operating a geothermal plant built by Fervo Energy (Houston), in a partnership agreement, to power a data center in Nevada. Fervo has received several government grants. In 2024 Energy Secretary Jennifer Granholm announced that Fervo would share $60 million in U.S. Department of Energy funds with two other companies. Its purpose is to fund pilot projects to determine the economic viability of geothermal "for reliable electricity production."
Nix for Amazon Nuclear: On Monday, the Federal Energy Regulatory Commission (FERC) denied Amazon's request to expand its colocated load at an Amazon Web Services data center connected to the Susquehanna nuclear plant in Luzerne County, Pennsylvania. The agreement would have allowed the 2.5-gigawatt (GW) plant to serve Amazon "behind the meter." The FERC was concerned that the agreement would have raised electricity prices for consumers and compromised the grid's reliability.
Yes for Amazon's SMR Funding: In October, Amazon announced it was joining a $500 million financing round for small modular reactor (SMR) startup X-energy to build in excess of 5 GW of "mini nuclear" technology to support data centers over the next 15 years.
Nuclear Waste Issues
For years nuclear energy was an anathema, mainly because of world-shaking meltdowns in Chernobyl, Three Mile Island, and Fukushima, along with the difficulty in dealing with waste that is toxic for centuries, and exorbitant construction costs for new facilities. New developments have made nuclear somewhat safer and more economical, but no one has yet solved the NIMBY (not in my back yard) problem of disposal. As with many alternative fuels, this one comes with its own dark side.
Trump Cards
Much of what a Trump II administration could accomplish will depend on the balance in Congress, since the Senate has been declared for the Republicans. A Democrat congress could limit the president's options for changing energy policy, leaving more of it intact than was promised during the campaign.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
