AI boom power surge: Plants revived, fossil fuels reconsidered

Rising power demand is causing retired power plants to be reopened and repurposed. 

Power demand in the United States was relatively stagnant for many years, but now new demand from artificial intelligence data centers is changing that. Power demand is projected to rise significantly in the coming years.

To meet this new demand, power plants across the country are being brought back from retirement. Among these are two nuclear power plants, Palisades in Michigan and Three Mile Island in Pennsylvania. 

There has also been a significant shift in the outlook for both natural gas and coal. This change is a result of rising demand coupled with the likelihood that the EPA rule that would have required the closure of all coal fired and most gas fired power plants by the mid-2030s will be revoked. The current administration has signaled that the power plant rule is on its way out. Although any move to revoke the rule will likely be challenged in court, there has still been a sea change in how current administration treats both coal and gas, as evidenced by recent executive orders on coal and reliability. It’s my suspicion that this is in part driving a big change in decision making for energy companies as they look to build more gas plants and keep coal plants open longer than was previously planned. 

In Georgia, two coal plants slated for closure are staying online. Natural gas plants are being built all over the country, prompting long wait times for components.

 In Homer City, Pennsylvania, what was once the state’s largest coal-fired power plant, the Homer City Generating Station, is set to reopen as a gas power plant. Once reopened, the new facility will be called the Homer City Energy Campus and will have a nameplate capacity of 4.5 gigawatts. Construction on the project is set to begin this year with the expectation that the plant will produce power by 2027. 

Reinvestment in existing sites is a great way to recoup some of the costs of existing retired facilities while also using land that has often already been permitted for energy specific uses. Sites like this, including the one in Homer City, are already considered brownfield sites and would require remediation. Retooling the facility in this way saves money and resources while allowing more power to come back into the PJM grid, the Regional Transmission Organization that covers the mid-Atlantic region including Pennsylvania. That grid is in urgent need of new power as many new data centers are being sited within its boundaries including in Northern Virginia, which currently has the highest concentration of data centers anywhere in the world. 

As the Trump administration’s pro-energy actions coupled with rising demand continue, we are likely going to see increased investment in natural gas as well as the repurposing of old facilities for new power production. 

A version of this article first appeared in the Independent Institute.