Why let Big Tech destroy our climate?

As the globe struggles to meet current climate goals, a new threat is emerging.

The threat is coming from Big Tech companies like Apple, Microsoft, Amazon, Alphabet (Google) and Meta (Facebook). Together, these companies represent a sector that dominates the market. At $3.6 trillion, Apple is now seven times the size of ExxonMobil, the nation’s leading oil company.

And Big Tech is demanding big resources: Tech companies are already major electricity consumers and are now calling for a major expansion of data centers to meet the demands of increased cloud computing and artificial intelligence utilization. The electricity demand from data centers is forecasted to double or even triple by 2030. Utilities are using this forecast to justify a major buildout of new gas-fired electricity generation — a move that could undo much of the progress we were making on climate change.

The U.S. utility industry is planning for a level of growth that is unprecedented in the last two decades, thanks largely to these data centers. Two years ago, the utility predicted 23 gigawatts (GW) of demand growth over the next five years; last year, the prediction exploded to 128 GW, more than five times higher. The main driver? More than 90 GW of projected new data centers, which would cause nationwide electricity demand to increase almost 16% by 2029.

Before explosive data center growth took off within the past two years, serious energy system modeling emphasized that maintaining current lifestyles implied the need for an unprecedented buildout of renewable energy from now through 2050 and unprecedented levels of capital deployment into the clean energy transition in the United States. We are already dangerously far behind.

Forecasts of massive data center demand would make those already “unprecedented” numbers even larger and more difficult to achieve, even if the proposed data centers were all powered by renewable energy (hardly the current plan). Utilities in just four states — Virginia, North Carolina, South Carolina and Georgia — are planning a buildout of natural gas infrastructure equivalent to the energy demand of about 12 million households.

Virginia is the largest hotspot for data centers, which account for more than a quarter of the state’s entire electricity consumption. Virginia’s electricity consumption is projected to more than double by 2040, with more than 85% of growth coming from data centers. In 2040, data centers are projected to comprise fully two-thirds of Virginia’s electricity demand — double the consumption of residents and all other businesses and industry combined.

The Institute for Energy Economics and Financial Analysis (IEEFA) recently published an analysis arguing that utilities may be poised to overbuild natural gas infrastructure for demand that may not fully materialize. The recent revelation of the apparently far more energy-efficient Chinese AI model DeepSeek has further called into question Big Tech’s forecasts.

To add insult to grave injury, Big Tech is also insisting that we subsidize their profligate electricity usage. In the absence of much stronger action from regulators, all transmission lines and power plants that get added to the grid solely because of data center energy demand will be paid for by all electricity consumers. In Virginia, the average residential electric bill will increase by $170 to $440 a year — between $14 and $37 every month. In other words, without a moment to pause and evaluate realistic needs and renewable energy sources, we will subsidize the largest companies in the world for the privilege of locking us in to future fossil fuel use.

Cathy Kunkel (ckunkel@ieefa.org) is an IEEFA energy consultant. She also served as an IEEFA energy finance analyst for 7 years, researching Appalachian natural gas pipelines and drilling; electric utility mergers, rates and resource planning; energy efficiency; and Puerto Rico’s electrical system. Kunkel has degrees in physics from Princeton and Cambridge.

The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. IEEFA receives its funding from global philanthropic organizations and individuals, and is funded by ClimateWorks Foundation, the U.S. Energy Foundation, The Heinz Endowments and other funders.