AI is piling risks onto already-shaky power grids

Politico

05-06-2025

From OpenAI founder Sam Altman on down, U.S. tech industry goliaths couldn't be clearer that they plan to build huge data farms to dominate China in the race to control artificial intelligence.
That's raising anxiety levels for the regional power executives whose systems would need to handle those data centers' voracious demands for electricity — and who are already coping with extreme weather shocks and the nation's deep divides on energy and climate policy. And it means that the risks of outages across the United States are hitting new highs, power market leaders told federal regulators this week, Peter Behr writes.
Microsoft, Meta, Amazon, Google's parent company Alphabet, chip maker Nvidia, and the army of financiers supporting OpenAI's ambitions are driving record forecasts for electricity demand, just as President Donald Trump is promising an era of unrestrained growth for AI.
As a result, state officials and power industry execs have been huddling with members of the Federal Energy Regulatory Commission to try to get a handle on a future that likely sees old coal and nuclear plants restarting at a high cost and more natural gas-fueled power stations built from scratch.
'AI is going to change our world,' said Manu Asthana, CEO of the PJM Interconnection, the grid operator for 67 million customers in all or parts of 13 Eastern states and the District of Columbia.
'In our forecast between 2024 and 2030, currently we have a 32-gigawatt increase in demand, of which 30 is from data centers,' Asthana said. 'We need to stabilize market rules and find that intersection between reliability and affordability that works both for consumers and suppliers, and that intersection is getting harder and harder to find.'
Too much, too fast?
Politics is compounding the problems. So is the fact that electricity infrastructure is expensive and in place for decades.
Regional grids in the Northeast, such as the one that serves New York state, have invested in a gradual transition to low- to zero-carbon energy technology. But under Trump, that is no longer U.S.policy, and offshore wind projects that the Northeastern corridor had counted on are being canceled or fighting for their lives.
Extreme weather resulting from climate change is also putting immense pressure on grids.
The power grid that serves the Plains states had so little demand growth until about 2017 that it lowered the amount of extra power it had in reserve. Extreme weather threats increased the chance of power outages, said Lanny Nickell, head of a regional electric grid called the Southwest Power Pool.
'As if this wasn't challenging enough,' Nickell said. 'We are now projecting our peak demand to be as much as 75 percent higher 10 years from now, and that's largely driven by electrification and data center growth.'
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Today in POLITICO Energy's podcast: Matt Daily breaks down the fight between the White House and the Government Accountability Office over Trump's funding pause for electric vehicle chargers.
Power Centers
Get out the popcornThe alliance between President Donald Trump and Tesla CEO Elon Musk is blowing up in spectacularly public fashion.
The two have spent the day attacking each other, including with a barrage of posts on their respective social media networks, days after Musk came out against the GOP megabill. The spending bill would add trillions of dollars to the national debt to pay for tax cuts and boosts to military spending, among other Trump priorities — while cutting funding to a slew of climate, health care and safety net programs.
Trump told reporters that Musk is 'upset' because the bill would end electric vehicle tax cuts. Musk's clapback: 'Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill.'
It's only gone downhill from there. As of publication, Trump had threatened to terminate Musk's 'Billions and Billions of Dollars' in government contracts, Musk had accused Trump of being in the 'Epstein files' and coined the term 'Big Ugly Bill,' and Tesla stock had plummeted 14 percent.
That's quite a turnaround from last week, when Musk was still Trump's special adviser and the two were celebrating their government-slashing efforts. Republicans — who are working to corral enough votes in the Senate to pass the bill — have begun to ascribe Musk's attacks to his displeasure over how the bill would affect his bottom line.
'I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!' Trump wrote today on Truth Social.
Another CO2 milestone fallsThe level of climate-warming carbon dioxide in the atmosphere broke another record in May, reaching a concentration never before seen in recorded history, writes Chelsea Harvey.
The National Oceanic and Atmospheric Administration gathered the data and announced the findings on social media but declined to put out a press release, breaking with precedent.
The atmospheric concentration breached 430 parts per million last month, 50 percent higher than preindustrial levels, as the world continues to burn fossil fuels that emit planet-warming pollution. The last time CO2 concentration was that high was likely 30 million years ago, when the climate was vastly different.
EPA v. its own AIA new generative AI tool the Environmental Protection Agency is using says climate change is real and dangerous, putting it at odds with the Trump administration as the agency aims to repeal regulations and sideline climate science, Jean Chemnick writes.
The internal tool was rolled out to staff May 22, along with instructions to staff to check the tool's answers for 'accuracy and bias.'
While the tool was introduced under Trump, a memo to EPA staff noted it has 'been in the works for some time.'
In Other News
Green business: Boston Metal is finding success using a novel process to make steel that creates no carbon dioxide emissions.
Gassed up: Data center developers in Texas are building their own gas-fired generation in their rush to get online.
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Federal scientists and companies are embracing AI to find new sources of oil, gas and minerals.
Forest preservation could worsen climate change because of the prevalence of wildfires, a United Nations-affiliated report says.
EPA is preparing to let oil and gas operations miss compliance deadlines under a Biden-era methane rule.
That's it for today, folks! Thanks for reading.