The Club's principal advisor for climate and energy, Jeremy Fusher, puts it plainly: "the numbers continue to sort of boggle our minds." He's referring to an estimate that with the output from pending data center builds, the output from the U.S. power sector is set to put 2.1 billion metric tons of CO2 in the atmosphere by the end of the decade, an uptick of 42% compared to 2025 figures. The researchers' previous estimates were between a quarter and half of the current projections.
An increasing number of countries and states are enacting laws demanding that new data center builds have a large portion of their power generated by green sources. However, those laws rarely apply retroactively, and oftentimes have a phase-in period. Even the Irish law on the matter demanding that new data centers be fed by 80% of renewable power only requires that that happens six years after they're powered up.
In the current AI-driven market, speed of construction is king. Roughly 40% of U.S. data centers are fed by natural gas turbines , and the situation doesn't look like it'll be changing much. It'll likely get worse, as the addition of green sources almost assuredly won't keep up with demand. Much like RAM, GPUs, and storage, turbines were all slurped up by data centers. Their prices have risen by 50%, and production is backlogged for years, with one maker stating it's opening slots for production in 2032 .
Having said all that, Brendan Pierpont from Energy Innovation, another climate-concerned organization, points out that although the current path looks dangerous for the environment, it's hard to make a hard prediction of how the situation will play out. He justifies his position with common data center roadblocks: the availability of turbines, delays in grid connections, and other delay factors.
US AI data centers projected to become the fifth-largest natural gas consumer in the world by 2035
Amazon’s new 7.65GW Texas AI data center power plant could become the largest source of CO₂ pollution in the U.S.
Amazon warns $68 billion in blocked data centers threatens US AI lead
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/data-centers/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/data-centers/us-data-centers-could-wipe-out-15-years-worth-of-progress-in-greenhouse-gas-emissions-report-claims-buildouts-could-emit-as-much-carbon-dioxide-as-all-of-mexico#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.