18 Data-Based Facts To Weigh In On U.S. Policy For AI Power

Recently, President Trump declared an energy emergency, which turned out to be an electricity crisis presaged by huge amounts of electricity needed to drive up to 5,000 new data centers in the U.S. to enable AI expansion.

To resolve this crisis, President Trump, through Chris Wright his Secretary of Energy, has turned to natural gas and therefore gas-fired power plants. “Beyond the obvious scale and cost problems, there is simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas.”

Wright criticized the emphasis of past Democratic administrations on renewable energy, which he says has yet to prove itself as a reliable source of electricity. This is not correct, as data from other countries show solar and wind resources are commercial successes when tied to grid-scale batteries, and they are cheaper (see below). This combination of renewable resources we call green SoWiBess. As used elsewhere, Bess stands for battery energy storage system.

Wright also plugged small nuclear reactors and geothermal resources, but in reality each of these produce less than 1% of current electricity in the U.S.

What should be government policy for additional power needs for AI data centers? Should it be some combination of fossil and renewable energies? What is realistic? Lots of one-sided books have addressed fossil versus renewable energies but a balanced view is rare. Here we present a balanced list of energy realities, based on data and facts from independent sources, that will clarify the situation. First some background, then we hit the issue of energy feed to AI data centers.

JP Morgan View On Fossil Energies Versus Renewables.

This was presented in a report by Roger Pielke that draws on a JP Morgan article written by Michael Cembalest.

One. The world continues to thrive on fossil energies. Global consumption of fossil fuels (coal, oil and gas) have increased linearly since 1965 and, surprisingly, each source provides about a third of total world energy.

Two. In several “countries”, total fossil fuels are a high fraction of total consumption: Asia (except Japan and China) is at 92%, Japan and China are each at 87.5%, US is at 87%, and Europe is at 79%. But fossil fuels in all of these are in decline: Europe the most, Asia (ex Japan, China) the least.

Three. Carbon-free renewables were 14% of total global consumption in 2012 versus 18% in 2024. Globally, renewables are advancing at 0.3-0.6% per year, a very slow rate. About $9 trillion has been spent globally on carbon-free sources such as wind, solar, battery, EVs.

Four. Solar power accounts for only about 7% of global energy generation, rising to 14% in 2027. But it has made great strides in 2024, due largely due to China.

Five. Economic prosperity is energy-intensive. From the JP Morgan report: “Human prosperity, in places where it thrives, relies heavily on steel, cement, ammonia/fertilizer, plastics, glass, chemicals and other industrial products which are energy- intensive to produce. . . these products currently rely on fossil fuels for 80%-85% of their energy.”

Climate Warnings That Shouldn’t Be ignored

Six. Global temperature rise since 1950s is close to 1℃. If the rate of increase is projected out to the year 2100, global temperature will be higher than it’s been in a million years. Does the world want to take this risk?

Seven. Average sea level rise caused by global warming is only 2-3 mm per year. But if warming is uncontrolled, and the current rate of increase is projected out to 2100, sea level will have risen by about 3 feet. This will have severe effects on several shoreline countries. Singapore has committed $74 billion over the next 100 years (that’s $740 million each year) to strengthen their borders against sea level rise.

Eight. If global warming is uncontrolled, 90% of all coral reefs in the world will be functionally degraded by 2050. Coral reefs are a vital source of food, livelihood and cultural heritage for half a billion people on the planet.

Nine. The killer quad of droughts, wildfires, flooding, and hurricanes, have not worsened over the last fifty years, even though the global temperature has risen 1°C. The killer weather extremes are those that can wreak havoc in the form of famines, flooding, migration, government instability, and oftentimes death. This result implies less urgency about temperatures rising another 0.3°C to the Paris limit—and also places less blame on the oil and gas industry which produces 50% of carbon emissions.

Headwinds For New Electricity For AI Data Centers

Ten. A data center contains banks of computers run by electricity. The additional electricity can be gas-fired or green. But the expansion will require larger transmission lines, more transformers, etc.

Eleven. Growth of transmission lines in the U.S. is frozen, and new transformer equipment is now delayed by 2-3 years. This sets back delivery of electricity (green or not) to data centers that are needed for AI. The electricity share of final energy consumption in the U.S. has not increased as anticipated, and this is part of the electricity crisis.

Twelve. Electricity costs more than natural gas in the U.S. JP Morgan said, “The high cost of electricity compared to natural gas (particularly in places without a carbon tax) is another impediment to electrification that is not easy to solve since this ratio reflects relative total costs of production and distribution.” In Texas and California industrial plants, electricity is about 5 times the cost of gas (on an equivalent energy basis). In Texas and California residential, the ratios are 2.8 and 3.6 respectively.

However, new-build facilities that burn gas will cost more than green SoWiBess installations. The advantage of SoWiBess costs has been shown in South Australia, where in 6 of 8 recent quarters the wholesale cost of electricity in the low-carbon state (70% renewables) is less than high-carbon states of Australia that depend more on coal-fired power plants.

Policy For AI Power: Gas-Fired Or Green Electricity

Thirteen. Individual states and countries have exceeded the global averages for green power. Leading the world, South Australia has lifted its electricity from SoWiBess renewables from 1% to 74% in just 16 years. This is likely to rise to 85% by 2025/2026, and 100% by 2027.

Fourteen. Battery storage (BESS) has increased storage time toward 8 hours of dispatchable energy, and price has dropped by 40% in the past year. Australia started and leads the world in grid batteries. Now a large new battery project at Stoney Creek (125 MW/ 1000 MWh) is designed for an 8-hour supply, compared with a typical 2-4 hour supply. The New South Wales (NSW) government supported by tender this improvement in dispatchable supply of electricity. To assist the state’s move away from coal-fired power, five 8-hour batteries are being built in NSW. Battery technology costs at Stoney Creek declined by 40% in the past year due to price changes in China.

Fifteen. In the U.S., renewables (excluding nuclear) accounted for about 90% of new installed capacity in 2024. The market has spoken out about the policy for AI power. Renewables plus battery storage (SoWiBess) now make up 30% of U.S. power capacity. In the U.S., installed solar capacity now totals 220 GW, and can provide 7% of U.S. electricity. BESS doubled in 2024 to 29 GW, and is likely to grow almost 50% in 2025. This dispatchable energy from batteries stabilizes the U.S. power supply.

Sixteen. SoWiBess developments can be built much more quickly than gas-fired power plants. Construction of new gas-fired plants as policy for AI power may be impossible, since the demand has become urgent but there currently exists a gas turbine backlog. GE’s backlog of gas turbines was $73 billion as of January 1, 2025.

But new SoWiBess renewables are also delayed— by interconnection backlogs. A creative proposal suggests linking them to existing peaker gas plants which are often idle, in a scheme called “power couples”. A new data center would be built near an existing peaker gas plant. And a new SoWiBess would also be built to provide power to the data center. When power from SoWiBess falls at night, the gas peaker fills the gap. A disadvantage is that peaker gas power is more expensive at $200/MWh than SoWiBess at $40/MWh. Caveat: one wonders if a larger battery at the SoWiBess site would serve the same purpose as the peaker plant, at much less cost.

Seventeen. To generate more electricity for AI, it makes sense to expand commercially proven SoWiBess rather than natural gas, nuclear SMRs, or geothermal.

If the U.S. crisis is about generating 80% more electricity to supply AI data centers in the next five years, is gas the solution? Nuclear SMRs and geothermal are out because of high costs and barely proven commerciality. SoWiBess generation of electricity is at an all-time high in the U.S., and exceeds by 27 times nuclear SMRs and geothermal generation which are both at the starting gate.

But why not build more gas-fired power plants and pipelines?

The head of FERC, Mark Christie, is pushing combined-cycle gas turbines that provide consistent baseload supply, using both a gas turbine and a steam turbine to generate electricity more efficiently. There was no mention of dispatchable power from BESS via grid-batteries, which is the fastest way to dispatch extra electricity.

But what about the cost of a new-build combined-cycle gas turbine? How does it compare with new-build SoWiBess installations? One answer is given by comparing the unsubsidized levelized cost of electricity (LCOE) operations in 2023. Each category has a range of LCOEs:

The authors say that BESS prices may come down significantly within two years of 2023. And it has been reported that battery costs in China are coming down by 40%. With this, the table of costs shows the cost advantage lies with SoWiBess—and it’s also cleaner energy than fossil gas plants. Altogether, cheap and reliable clean electricity can be provided by SoWiBess.

Eighteen. Data centers are using mobile gas turbines to provide power that is inefficient and unclean. Elon Musk’s AI company, xAI, has a new Colossus data center in Memphis, Tennessee, that has four of these mobile turbines, which are normally used in disaster recovery. This is a stopgap solution when the grid can’t provide all the power, and rentals of mobile turbines are now going crazy. But the turbines are very inefficient, and are also spitting out pollutants—not just CO2 but nitrous oxide and formaldehyde. Despite this, their use has not been authorized by any public agency.