Energy-hungry tech companies told to pony up to improve power grid

illuminem summarises for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:

🗞️ Driving the news: U.S. utilities are pressing major tech companies — including Amazon, Microsoft, and Google — to cover a greater share of the costs for expanding grid infrastructure, as surging demand from data centers strains the power system
• With AI and cloud computing driving an unprecedented build-out of energy-intensive facilities, utilities warn that ratepayers should not bear the brunt of the necessary upgrades

🔭 The context: Data centers can consume as much electricity as tens of thousands of homes, and the rapid acceleration in their construction — especially to support artificial intelligence — has outpaced grid planning in many regions
• Traditionally, utilities recover infrastructure costs from their full customer base
• But as tech giants build more private, high-demand facilities, regulators and utilities are reconsidering who should pay for new power lines, substations, and generation capacity

🌍 Why it matters for the planet: The explosion in data center energy demand risks increasing dependence on fossil fuels if not matched with clean energy investments
• Assigning cost responsibility to tech companies could encourage more efficient site selection, renewable energy procurement, and investment in grid resiliency
• Without reform, grid stress could slow decarbonization goals and increase emissions during peak load events

⏭️ What's next: Expect regulatory proceedings in several U.S. states where utilities and data center developers are clashing over cost allocation
• Some utility commissions may require data center operators to directly fund grid upgrades or shift project timelines
• Tech firms may also respond by investing in on-site renewables, battery storage, or private microgrids to avoid delays and added fees
• The outcome will shape the pace and sustainability of the AI and cloud computing boom

💬 One quote: “We can’t have regular customers footing the bill for the infrastructure demands of private tech giants,” said a utility commissioner involved in one such case.

📈 One stat: Data centers in the U.S. could account for up to 9% of total electricity demand by 2030, nearly triple today’s share, according to estimates from the Electric Power Research Institute

See on illuminem's Data Hub™ the sustainability performance of Amazon, Microsoft, and Google and their global tech peers Meta, and Oracle

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