The US data centre industry has warned that the Trump administration’s crackdown on renewable energy could slow its growth and undermine Washington’s goal to win the global artificial intelligence race.
Renewables have become a flashpoint since Donald Trump re-entered the White House, with his administration suspending clean energy developments on federal land, pausing federal loans and last month cancelling high-profile projects such as Equinor’s $5bn Empire Wind site.
For tech companies struggling to secure reliable energy supplies to power and train AI, a clampdown on renewables could create power bottlenecks, drive up costs and push operators towards dirtier energy, experts said.
Simon Ninan, senior vice-president at Hitachi Vantara, which builds equipment and infrastructure for data centres, said the Trump administration’s “antagonistic approach” towards renewable energy could make it “impossible to satisfy the data growth that’s happening”.
“Strategically, the US could risk undermining its current pole position in the global AI race . . . China, on the other hand, has taken a proactive approach towards grid modernisation and efficient power distribution.”
Energy shortages could “result in cancellation or delays in data centre build-outs or infrastructure upgrades”, he said.
The Trump administration has warned that losing the AI race to China is a bigger threat to the world than global warming and has advocated increasing the use of fossil fuels to power them. But experts warn it will be difficult to meet surging demand without adding a lot more renewable energy capacity, which is faster and cheaper to deploy than building gas power plants.
The assault on renewables has alarmed Democratic leaders in north-eastern states, which are relying on the expansion of wind energy to meet future electricity demand.
On Monday a coalition of Democratic attorneys-general from 17 states sued the Trump administration in an effort to block its attempt to end the development of wind energy.
Data centres are expected to add 83.7 gigawatt of energy demand by 2030, equivalent to adding a new state the size of Texas to the grid, according to the Center for Strategic and International Studies think-tank. While many companies are investing in nuclear small modular reactor technologies, it may be years before they are operational.
“We’ve seen increased competition for green energy over the last couple of years,” said Nick Hertlein, a managing director at Stonepeak, an alternative investment firm specialising in infrastructure and real assets.
“If US AI development is a priority, [policymakers] need to find ways to accommodate the data centre industry’s growth.”
While large-scale gas generation projects are being fast-tracked by major grid operators such as PJM, MISO and ERCOT, this may come at the expense of cheaper sources such as renewables. Gas turbine suppliers such as Siemens and GE Vernova have warned lead times can stretch to 2029 for larger models.
“If we can’t bring on new, lower-cost resources when demand is increasing, we’ll have to rely more and more on higher-cost resources,” said Rich Powell, chief executive of the Clean Energy Buyers Association.
“We just need to flood the zone with new electricity as quickly as we can.”
Although big participants in the technology industry may be able to lobby the administration to “loosen up” restrictions on new power sources, small to medium-sized players were in a “holding pattern” as they waited to see if permitting obstacles and tariffs on renewables equipment were lifted, said Ninan.
“On average, [operators] are most likely going to try to find ways of absorbing additional costs and going to dirtier sources,” he said.
Amazon, which is the largest corporate purchaser of renewable energy globally, said carbon-free energy must remain an important part of the energy mix to meet surging demand for power, keep costs down and hit climate goals.
“In addition to being a source of carbon-free energy, historically renewable energy has often been less expensive because there is no fuel to purchase,” said Kevin Miller, vice president of Global Data Centers at Amazon Web Services.
Efforts by state and local governments to stymie renewables could also hit the sector. In Texas — the third-largest US data centre market after Virginia, according to S&P Global Market Intelligence — bills are being debated that increase regulation on solar and wind projects.
“We have a huge opportunity in front of us with these data centres,” said Doug Lewin, president of Stoic Energy. “Virginia can only take so many, and you can build faster here, but any of these bills passing would kill that in the crib.”
The renewables crackdown will make it harder for “hyperscale” data centres run by companies such as Equinix, Microsoft, Google and Meta to offset their emissions and invest in renewable energy sources.
“Demand [for renewables] has reached an all-time high,” said Christopher Wellise, sustainability vice-president at Equinix. “So when you couple that with the additional constraints, there could be some near to midterm challenges.”
Additional reporting Jamie Smyth
This story has been amended to correct a quote from an Amazon web services executive
