Key Issues: Data Centers and Fossil Fuel Reliance
Utilities in the U.S., Europe, and Asia are ramping up fossil-fuel generation to meet demand due to delays in renewable energy deployment. For instance:
- In the United States, utilities are building new gas plants and delaying fossil fuel retirements to power expanding data centers. Dominion Energy and Entergy are among those constructing large gas facilities, while NiSource plans to invest heavily in natural gas systems.
- In Poland and Germany, coal remains a fallback option for new data center projects due to limited renewable energy capacity.
- In Malaysia, data centers often depend on a fossil-fuel-heavy grid despite renewable energy incentives.
Data Centers: A Growing Climate Burden
Morgan Stanley estimates the global data center industry could emit 2.5 billion metric tons of CO₂ through 2030, matching Russia’s annual emissions. These facilities, essential for AI and cloud applications, now face scrutiny over their environmental footprint.
Although companies like Meta, Microsoft, and Amazon have pledged to source renewable energy, critics argue these commitments often repurpose existing clean power rather than adding new capacity. Agreements to use advanced nuclear reactors or other innovative solutions remain years away.
COP29 Initiatives and Renewable Energy Gaps
At COP29, Azerbaijan introduced the first Digitalization Day, endorsing a declaration by 68 countries to minimize the environmental impact of digitalization. However, clean-energy consultancy RMI warns the current approach of relying on gas and coal risks locking in high emissions for decades, undermining decarbonization targets.
Global Outlook
Balancing digitalization’s energy needs with climate commitments requires immediate and innovative action. Without accelerating renewable energy deployment and exploring advanced solutions like XBRL-based sustainability reporting, global power systems may struggle to sustain data-driven growth while curbing emissions.
| Find out more here. |
