CEOs in the renewable energy sector believe the industry is at inflection point, as Big Tech seeks carbon-free energy to power electricity-intensive data centers.
But leaders in the clean energy industry argue that the sector is reaching a turning point, particularly as Big Tech firms such asseek clean energy to power data centers that are the backbone of the Internet and artificial intelligence applications. The economic argument for renewables has also strengthened, they say, as the price of solar modules and batteries has fallen.
And Big Tech is building out energy intensive data centers to support the artificial intelligence revolution. In 2023, data centers representing three gigawatt hours of electricity were under construction in the top eight U.S. markets, a 46% increase over 2022, according to "The primary use of these data centers is big tech and I believe they're beginning to recognize the role that natural gas and nuclear must play," Richard Kinder, executive chairman of Kinder Morgan, one of the nation's largest natural gas pipeline operators, told analysts on the company's first quarter earnings call in April.
Solar demand is rising as the power source has become cost competitive with natural gas in areas. Solar for large utility projects costs $29 to $92 per megawatt hour of electricity, while combined cycle gas plants cost between $45 to $108, according to a June analysis by financial advisory firm Lazard.
But it is taking longer to build power plants after their initial application. For plants that came online in 2023, it took about five years from the initial application for grid connection until construction was finished, said Rand, the Lawrence Berkeley analyst. In 2008, it took just two years, he said.
A fully renewable electric grid is not possible today because banks of longer duration batteries are not currently cost effective, said Reid Ramdathsingh, senior renewables and power analyst at the consulting firm Rystad Energy.
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