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Powering the AI Boom: Surge in Electricity Demand Challenges Renewable Energy Goals

The rise of artificial intelligence (AI) is expected to significantly increase electricity demand over the next decade. This surge is challenging for power companies to manage, especially since the amount of power renewable energy sources like solar and wind can generate depends on the weather. A report by Wells Fargo predicts that U.S. electricity demand could grow by as much as 20% by 2030, with AI data centers alone adding around 323 terawatt-hours to this demand. This increase is about seven times that of New York City's uses in a year.

While major technology companies such as Amazon, Google, Microsoft, and Meta are trying to use renewable energy for their data centers to cut carbon emissions, the inconsistency of solar and wind energy might not be enough to handle the full electricity needs. As a result, the natural gas industry is preparing to step in and help meet this increased demand.

Richard Kinder, executive chairman of Kinder Morgan, highlighted the vital role of natural gas, especially for powering data centers. Natural gas could provide 60% of the electricity needed for the growth of AI and data centers, with renewables covering the remaining 40%.

In places like Northern Virginia, a hotspot for data centers, electricity demand from these centers is expected to double by 2030. Natural gas companies, like EQT Corp. in the Appalachian Basin, are well-placed to supply this booming market.

Although environmental groups worried about carbon emissions oppose expanding natural gas use, industry leaders argue it's a necessary "bridge fuel." They believe natural gas is essential until renewable and nuclear technologies can more reliably meet our energy needs. Thus, natural gas will play a crucial role in supporting the growing demand for electricity from AI and data centers in the near future.


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