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“The crazy thing about renewables is that both political arguments are correct,” says Pierre Lafarge, co-founder of utility services company Spark Fund. “It’s the cheapest power at the source of generation – but it also raises prices due to eventual upgrades to the distribution network.”
Simply reintroducing tax credits for wind and solar power will not be enough to stave off the worst effects of climate change. The UCS study also modeled the costs of policies that would lead to more aggressive decarbonization of the U.S. grid as demand from AI rises. This includes stricter regulations for power plants and more investment in the transmission upgrades that renewable energy needs. The analysis concludes that this scenario would raise wholesale electricity costs slightly through 2050, by about $412 billion, an increase of 7 percent. However, the analysis finds that it would avoid up to $13 trillion in climate costs: damage from floods, wildfires, droughts, and other extreme weather around the world, as well as local health costs associated with dirty power plants. (Earlier this month, the EPA announced that it would no longer consider costs Saving lives from excess pollution When considering pollution policies around power plants.)
Much of the American grid is in dire need of modernization, especially if the country gets serious about ditching fossil fuels. Part of the challenge in the next few years will be ensuring that the upgrades the grid needs — with or without more renewables — are not unfairly forced on consumers.
“There’s definitely a need to put much stronger guardrails in place for the data centers themselves, and also to make sure that we have enough electrical capacity and generation to run those data centers, and that it doesn’t impact other customers,” Clymer says.
Despite the Trump administration’s aggressive attacks on renewables and staggering numbers for AI energy requirements, there are some reasons for hope. LaForge believes that utilities’ increased deployment of batteries, along with contracts that make data centers pay for infrastructure and other associated costs, will help lower electricity prices for average consumers. (Unlike tax credits for wind and solar, tax credits for batteries mostly came about through big, nice bill negotiations.) In this scenario, the United States might look more like Texas: tons of cheap wind and solar power on the grid, a few gas plants, and lots of batteries installed.
“The good news is that just as the Biden administration could not control the fate of the universe, neither can the Trump administration,” he says. Pointing out Solar, wind and storage accounted for more than 90 percent of the new energy put on the grid last year. “We are building more renewables more quickly in more places for purely economic reasons.”