The renewable energy industry is creating a new pitch as President Trump works to slow wind and solar growth and expand US fossil fuel production. You need us.
Wind and solar developers increasingly point out that US electricity demand is rising and the data center boom has driven them, and it has proven difficult to build a new gas plant enough to supply all the extra electricity the country needs.
Storage of wind, solar and batteries is relatively quick and inexpensive. It could help avoid energy shortages and keep prices low. This is the argument that renewable energy companies are making policymakers.
“Let's make this realistic with the message to the administration,” said John Ketchum, chief executive of Nextera Energy, one of the nation's largest electricity producers, in an interview. “If we remove renewable energy and storage from the table, we will force electricity prices on the month.”
At the same time, Congressional Republican leaders are talking about ending federal grants in the form of low-carbon electricity tax credits, which are expected to surpass wind and solar growth. These uncertainties around credit have paralyzed the renewable energy industry, with businesses delaying projects and firing workers.
Even as scientists are escalating risks from climate change, chaos can make it difficult for the US to reduce emissions that warm the planet.
However, environmental debates are not far from presidents who dismiss global warming. Therefore, many wind and solar companies are now casting an industry essential to achieving our energy abundance.
“The focus is what we need to ensure enough energy to maintain control in manufacturing, electrification and artificial intelligence?” said Sandhya Ganapathy, CEO of EDP Renewables North America, a leading wind and solar developer.
As tech companies build large data centers for artificial intelligence, factories expand, and millions of people plug in electric vehicles, U.S. electricity demand could rise by up to 50% as tech companies build large data centers for artificial intelligence, according to a new study from S&P Global Commodity Insights.
Renewable companies say they are in a position to help them respond to their growth in the near future. This year, wind, solar and batteries are projected to account for 93% of the new power capacity added to the American grid. The rest comes from power plants that burn natural gas. In many places, building new wind turbines and installing solar panels are often the cheapest ways to generate additional electrons.
However, data centers require a round-the-clock view. Wind and solar power alone cannot be provided. So, last week at the nation's largest annual meeting of the energy industry in Houston, many executives argued that demand must be provided by sophisticated nuclear reactors or enhanced geothermal plants that can generate electricity today and in the future, in the future, in all times.
“The AI revolution is coming, it's going to get bigger, it's going to take a lot of power,” said Ryan Lance, chief executive of oil giant Conoco Phillips. “And Gas will be on the forefront of driving that electricity demand.”
Nextera's Ketchum looked at it differently. His company already owns a fleet of 19 gas-fired power plants, one of the largest in the country, and plans to build more gas units as the power needs grow. But Ketchum said wind, solar and batteries are equally important to meet the growing demand over the coming years.
The big reason he explained is that utility companies will have to wait up to five years to order new gas turbines as manufacturers struggle to keep up to global demand. New gas projects that are not yet under development are unlikely to come online before 2030, he said. Other new technologies, such as advanced nuclear generation, are even further apart.
In contrast, you can build many wind and solar projects within 12-18 months.
Since the inflation shock in 2022, the cost of building new gas power plants has also almost tripled, Ketchum said, but wind and solar prices have risen modestly.
Ketchum added that the intermittent nature of renewables is not necessarily a problem. This is because wind and solar are just one of the large-scale electrical systems. In some areas, there are gas turbines that don't run very often at night, so raising them and then adding solar and batteries during the day will help add 24 hours of power.
“Look, no one has built more gas-burning generations than we have in the last 20 years. I agree that we will need more gas,” Ketchum said. “But there's a matter of time, a matter of cost. So, our message should not be separated from renewables, because they are the only countries we have as a country that we can build to meet the demands we have here and now, and it's really low cost.”
Some high-tech titans reflected that view. Microsoft says it will spend $800 billion on new data centers this year, but it is paying a large sum of money to reopen a shuttered nuclear power plant on Pennsylvania's three-mile island, with new gas production potential. But the company still says it wants as much wind and solar as it can get.
“It would have been a different conversation 10 years ago when wind and solar weren't cost-competitive, but now it's actually the most cost-competitive option,” said Bobby Hollis, Microsoft's vice president of energy.
Jim Robb, chief executive of North American Electric Reliability Corporation, a country's grid monitor, has long warned that reliance on renewable energy could create new challenges for utilities.
But even Rob agreed that there were no other options to rapidly expand its energy supply over the next few years. “As long as we unleash the abundant energy of North America in the near future, it will mostly be wind and solar,” Rob told Washington's Grid Reliability Panel last month.
That message is beginning to catch up with conservative lawmakers. As Republican leaders are searching for trillions of dollars to pay for tax cuts, at least 21 GOP House members this month signed a letter that was part of the 2022 Climate Act, signing by President Joseph R. Biden Jull, a part of the 2022 Climate Act, urging the preservation of low-carbon power incentives, including wind, solar, solar, hydropower, nuclear and geothermal.
One recent study commissioned by conservative environmental group Conservamerica estimated that eliminating these tax credits could raise US electricity costs by $51 billion a year by 2035.
“Common sense tax credits that preserve all energy options for reliable energy are essential to keeping America's energy dominance and costs low,” said Gabe Evans, a Colorado Republican, by explaining why he signed the letter. Evans' district has several factories that manufacture wind power components.
For now, many Trump administration officials are deeply skeptical of renewable energy. In Houston last week, America's new energy secretary, Chris Wright, said wind and solar power are not as useful as natural gas and often trigger local opposition.
“Wind was chosen because it has a very poor record of raising prices and increasing public outrage, whether you're on a farm or in a coastal community,” Wright said.
“There has been a significant increase in wind and sun penetration everywhere, and prices have risen,” Wright said. (That's not necessarily true. California's power rates have jumped as rooftop solar panels have grown, but Texas is falling in prices, despite wind and solar providing a quarter of the state's electricity.)
Some renewable energy advocates said they hope that the wind and sun output will set as the reality of America's need for more electricity sets. They compared it to the early days of the Biden administration, where White House officials blocked new drilling leases just to soften after Russia invaded Ukraine and global oil prices.
“The last administration saw US oil and gas denounce Americans until gas prices go up. And they, um, produce more oil and gas. “We believe that once emotions move through the system and economics starts to focus, we really get all the energy policy.”
