COP29: A Wake-Up Call for Data-Center Energy Demands and Coal's Role

At COP29, world leaders gathered to address the ongoing climate crisis, but a surprising challenge has emerged. The rapid growth of data centers, fueled by artificial intelligence (AI) and cloud computing, is driving up global electricity demand.

Utilities and regulators are warning that fossil fuels, particularly coal, are playing a bigger role in meeting this demand than expected. The delay in clean energy deployment is allowing coal and natural gas to fill the gap.

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Rising Data-Demand Meets Fossil Fuels

Countries around the world are experiencing a surge in energy use driven by the expansion of data centers. In the U.S., a country home to a third of the world's data centers, utilities are investing in new natural gas plants to meet the growing electricity needs.

Even more concerning is the reliance on coal in some regions, where the pace of renewable energy development is lagging behind. Poland, Germany, and Malaysia are among the countries turning to coal to meet the electricity demands of new data facilities.

For example, coal remains a critical part of the energy solution for new data centers in Poland, where renewables still make up a small share of the energy mix, according to a Reuters report.

Similarly, in Malaysia, many data companies continue to draw power from coal and gas-based grids instead of paying a premium for renewable sources.

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The Role of Coal in Meeting Data-Center Demand

Despite promises from major tech companies like Microsoft, Amazon, and Meta to shift to renewable energy, coal plays a significant role in meeting the growing energy demands. In Ireland, data centers now account for over 20% of electricity consumption, Reuters reports.

The country has delayed the retirement of coal and gas plants to keep up with the demand. Emergency backup generation capacity and the continued use of natural gas will be key to meeting short-term needs.

In Germany, Microsoft is planning a major data-center expansion near a coal mine, though it remains unclear whether coal will be directly used for this new project. This highlights a troubling trend: the growing energy consumption of data centers is locking in fossil-fuel use, potentially for decades to come.

A Global Challenge for COP29

At COP29 in Baku, the issue of digitalization's environmental impact took center stage. Countries, including China and Korea, endorsed a declaration to limit the environmental footprint of digital technologies.

However, the growing reliance on coal to power data centers is a stark reminder of the challenges in achieving global decarbonization goals. With the rise of digitalization, countries face a difficult balancing act between meeting energy needs and reducing carbon emissions.

In the face of this new energy crisis, coal's continued role raises questions about the ability of world governments to meet their climate targets. If data centers continue to rely on fossil fuels, the path to a low-carbon future will become even more difficult.

Looking Ahead: Coal or Clean Energy?

The growth of data centers poses an immediate challenge for both the energy sector and climate policy. With countries struggling to meet clean energy targets, coal remains a fallback solution for many.

However, COP29 highlights the urgent need to accelerate renewable energy adoption. Without a significant shift toward cleaner power sources, the data industry's growing energy needs could undermine global efforts to combat climate change.

The ongoing reliance on coal and natural gas for powering data centers underlines the urgency for governments and industries to rethink their energy strategies. Clean energy deployment must catch up with demand if we are to avoid further damage to the planet's climate.