Why the cloud still runs on coal and gas in Commodity News 22/04/2026 Data centers need vast amounts of energy to fuel servers and process the information that keeps our websites, applications and generative AI models running. The United States has more data centers than anywhere else in the world and the extra energy demand is straining transmission grids and driving up the cost of electricity. Struggling grid operators are turning to polluting fossil fuels to quickly supply the power. In some cases, they are considering nuclear energy, or even bringing back oil, gas and coal power plants that had been slated for closure. According to recent analysis by Reuters, the country’s biggest power grid postponed or canceled the planned closure of 60% of its fossil fuel plants last year. PJM Interconnection covers 13 eastern states, including Virgina, the “data center capital of the world.” Eleven of the plants due to close were so-called “peakers,” which are brought online during periods of spiking electricity demand. “It is clear today, nationally, that electricity demand is outstripping supply — the market reflects this, and generators are responding,” PJM spokesman Jeff Shields told Reuters. “We need every single megawatt of energy we can get right now.” To meet that demand, some power companies are letting other priorities slide. Virginia-based Dominion Energy, which had pledged to shift to 100% renewable sources by 2045, has planned significant investment in gas and nuclear power until 2039 to “reliably generate power when customers need it the most.” In Nevada, utility company NV Energy has said data centers could cause it to miss the state’s clean energy targets of 50% renewable power generation by 2030. And in North Carolina, home to nearly 100 data centers, NextEra Energy announced in December that it no longer saw “a realistic path to achieving actual zero-carbon emissions by 2045.” Gas is ‘quickest, cheapest, easiest way’ to power data centers Dave Jones, chief analyst at global energy think tank Ember, said the unique electricity demands of data centers explains the heavy reliance on fossil fuels, especially gas. AI data centers today can use as much electricity as 100,000 households, but the largest centers currently under construction will need 20 times as much. And rapid technological advancement makes future needs tricky to predict. “It’s very hard in that context to plan for how much electricity you’re going to use,” Jones said, adding that some centers are also looking into on-site power generation. “The quickest, cheapest, easiest way in the eyes of many companies is to use gas.” In the US, natural gas provides more than 40% of the electricity for data centers, according to the International Energy Agency. Coal-fired power plants provide 15%. Worldwide, the IEA projects that these two dirty fuel sources will power over 40% of the additional electricity required by data centers until at least 2030. The agency adds that demand from upcoming plants will likely be “a significant near-term driver of growth for natural gas-fired and coal-fired generation.” Jones said the fact that “US natural gas prices are at an 18-month low” makes the fuel an attractive option. Climate goals a ‘trade-off’ for AI growth? The low price of gas, combined with the added tariffs on importing solar panels and other technologies from abroad, means the expansion of renewable energy for US data centers has slowed. But Jones said that’s not all that’s at p