Data centers will keep natural gas running
Data center construction mean running natural gas plants longer for Xcel Energy, according to remarks by Ryan Long, president of Xcel Energy’s Minnesota and Dakotas division, at an MPUC conference in October.
Energy News Network reports:
“As we take all of that coal off the system — even if you didn’t add data centers into the mix — I think we may have been looking to extend some gas (contracts) on our system to get us through a portion of the 2030s,” said Ryan Long, president of Xcel Energy’s division serving Minnesota and the Dakotas. “Adding data centers could increase the likelihood of that, to be perfectly honest…”
The expansion of power-hungry data centers, driven by artificial intelligence, has caused anxiety across the country among utility planners and regulators. The trend is moving the goalposts for states’ clean electricity targets and raising questions about whether clean energy capacity can keep up with demand as society also tries to electrify transportation and building heat…
Pete Wyckoff, deputy commissioner for energy at the Minnesota Department of Commerce, expressed doubts about the ability to meet unchecked demand from data centers. Even with the state’s recent permitting reforms, utilities are unlikely to be able to deliver “power of any sort — much less clean power — in the size and timeframes that data centers are likely to request.”
He sees hydrogen, long-duration batteries, carbon capture, and advanced nuclear among the solutions that will eventually be needed, but in the short-term the grid could serve more data centers with investments in transmission upgrades, virtual power plants, and other demand response programs.
Xcel believes it will still meet Minnesota’s mandate requiring 100% carbon-free electricity by 2040: “[Mr. Long] said the company wants to attract 1.3 gigawatts worth of data centers to its territory by 2032.”
Data center developers often make corporate commitments to run them on “clean” electricity. Some Meta, Facebook’s parent company, will open an $800 million data center in Rosemount in 2026 and create 100 long-term jobs. Amazon has swooped in to purchase 348 acres near Xcel’s Sherco site in Becker.
The easiest, cheapest and most reliable way to procure the 24/7 carbon-free electricity that data center developers want is through nuclear energy. Minnesota prohibits the building of new nuclear facilities.
The wind, solar, and batteries that must be built to meet the 2040 mandate will need some natural gas or coal-fired backup plants to ensure data centers — and residences — receive 24/7 electricity, too.