AI's Thirst For Power Keeps Coal Fires Burning Bright

More evidence has emerged that AI-driven demand for energy to power datacenters is prolonging the life of coal-fired plants in the US.

With AI still the hot new trend, demand for compute to operate it is pushing the growth of bit barn capacity along with the need for ever more energy to power it all. This growth is having some unintended effects, at least in America.

In Omaha, one power company has had to abandon plans to stop burning coal to produce electricity because of the need to serve demand from nearby datacenters, according to The Washington Post, picking out Google and Meta in particular.

It claims that rising energy demands from those facilities mean that two coal-burning generators at the North Omaha power plant cannot be decommissioned without risking a power shortage for that district.

This is despite previous undertakings from the operator, the Omaha Public Power District, that it would cease burning coal in order to improve air quality in the surrounding area, endangering public health as well as continuing to spew out greenhouse gas emissions.

In response, Google pointed us to an announcement it made last month that it is working with the Omaha Public Power District on a procurement framework that will enable the search giant to supply the utility firm with carbon-free energy resources.

This isn't an isolated incident. The Register reported earlier this year that coal-generated energy was being given a reprieve in the US thanks to the growing energy demands of datacenters, not helped by developers determined to throw as many high-performance servers packed with energy-guzzling GPUs as possible at training their generative AI models.

This growth has caught out many utility companies, which have until now faced flat or shrinking demand in the US market and planned their infrastructure investments accordingly. A report published last week by management consultants Bain & Company warned that unless they adapted quickly to expand generation and supply capacity by up to 26 percent, energy use might outstrip supply within a couple of years.

It also warned that datacenter operators might seek alternative sources of power if utility companies don't move quickly enough, but this already seems to be happening, as can be seen from various reports of tech companies showing interest in nuclear power.

Oracle is one of the more recent examples, disclosing during its latest earnings call that the company has secured building permits for a trio of small modular reactors (SMRs) to power a bit barn with over a gigawatt of AI compute capacity.

Earlier this year, Amazon Web Services (AWS) revealed that it had taken possession of a datacenter campus owned by Talen Energy built next to its Susquehanna nuclear power plant in northeast Pennsylvania.

• Energy companies told to recharge for AI datacenter surge
• Eric Schmidt: Build more AI datacenters, we aren't going to 'hit climate goals anyway'
• Not just AI datacenters needing own power: Taiwanese server-maker Quanta has bought microgrids
• AI's energy appetite too big for Texas grid, regulators warn

Last month, Microsoft announced a deal that will see the Three Mile Island nuclear plant come back online, thanks to a 20-year power purchase agreement (PPA) with Constellation Energy, which owns the facility.

However, some of these projects are likely to be long-term, with one analyst telling us a while back that the most optimistic time frame for deployment of technology such as SMRs in the United States is by 2030.

If cleaner sources of energy cannot be found, power companies will likely continue to rely on fossil fuels such as coal and gas to meet the growing demand from bit barns and other applications such as electric vehicles.

Financial services giant Morgan Stanley last month published its own report on the datacenter industry, warning that global greenhouse emissions between now and the end of the decade are likely to be three times higher than if generative AI had not been developed. ®