(Correction: This article has been updated. Amazon Web Services last year made a $10 billion planned investment in Entergy Mississippi’s service area.)

Some of the largest buyers of renewable energy may be falling short on their lofty emissions reduction ambitions, but Big Tech is still pumping big bucks and support into clean and low-carbon energy to feed power-hungry data centers.

It will take a mix of energy sources to meet rising demand, though the lower carbon mandate hasn’t changed, panelists said recently during American Council on Renewable Energy’s Finance Forum.

“In this moment we know that our path to net-zero carbon is not going to be a linear one, but we’re working with our utility partners in particular on a number of different strategies,” said Craig Sundstrom, head of energy and sustainability public policy for Amazon Web Services’ Americas region. “I don’t think we’re going to single one [energy source] out over the rest at this point, but we know that it’s going to take new generation and frankly, new transmission resources to get it done.”

Amazon, Google and other Big Tech firms are reaching out to U.S. electric utilities like Constellation and renewable energy companies, looking for enormous amounts of electricity to power data centers and artificial intelligence (AI) infrastructure. Their needs are only one piece of the U.S. power consumption growth story. Reshoring of industries, industrial and manufacturing, and the electrification of buildings and transportation are also driving up demand.

Many are relying on renewables and nuclear energy to meet needs while shrinking their carbon footprints, but natural gas and other technologies are also playing a role in the all-of-the-above strategy to procure power.

The International Energy Agency (IEA) forecasts demand from data centers worldwide will more than double by 2030 to reach approximately 945 terawatt-hours. That is slightly more than Japan’s entire electricity consumption, the IEA said. “AI will be the most significant driver of this increase, with electricity demand from AI-optimized data centers projected to more than quadruple by 2030.”

More than renewables

Amazon Web Services last year made a $10 billion planned investment in Entergy Mississippi’s service area. Entergy’s energy sources in 2024 were mostly gas (42%), followed by nuclear (27%), while renewables comprised 2%, according to an Entergy fact sheet.

“We rely on them to make decisions around their generation portfolio, but there was also a lot of creativity baked into that particular transaction as well,” Sundstrom said. “As a customer, we were also able to bring about 650 megawatts of utility-scale solar onto Entergy’s grid to support our investment there.”

Meta on June 3 said it signed a “landmark” 20-year agreement with Constellation Energy for nuclear power from the utility’s Clinton Clean Energy Center. Starting in 2027, Clinton will start supplying Meta with more than 1.1 gigawatts of emission-free nuclear energy.

“Clinton’s license was supposed to expire in 2027. … That’s a 20-year license commitment to go through 2047,” said Mike Kramer, vice president of data economy strategy for Constellation. “Our power markets today are generally two to three years out. … There are prices five years out, but generally very liquid. It’s very difficult to get that level of revenue certainty.”

Natural gas may be considered the safer source policy- and technology-wise; however, like other energy sources such as geothermal, it is location specific, panelists said.

Plus, “There’s a lot of cost and time and permitting and difficulty in getting things built today. … Having some policy certainty to make these large investments pencil and understand what the economics are is really important to get new stuff built,” Kramer said. “In the interim, we need to power the data centers as quickly as possible,” which may call for using existing sources whether that’s nuclear or gas.

Expanding data infrastructure and data use contributed to a 150% increase in indirect carbon emissions from four of the world’s largest AI companies, according to a report released in June by the International Telecommunications Union and World Benchmarking Alliance. The report showed electricity consumption by data centers increased by 12% each year from 2017 to 2023, four times faster than global electricity growth.

Net-zero goals remain

Is the mandate to lower emissions now outranked by needs to supply data centers with baseload power?

“Nothing has changed for our own commitment and that’s why we are taking such big strides now at looking at new advanced reactors, small modular reactors (SMRs) for example, because we know that the work we do now will ultimately help us in the future hit net-zero carbon by 2040 with new clean firm resources,” Sundstrom said.

Everything starts with the customer, he added, and they want to be on the Cloud.

“Yes, we need to respond to customers, and we do that by one, securing enough power to build the infrastructure that we’ll need to provide for our customers,” Sundstrom said, “but our customers also want AWS to be clean, which is why nothing’s changed in terms of our own commitment to hitting that longer-term target of net zero by 2040.”

Google began tweaking its carbon-free energy by 2030 goal when the company realized that its actual emissions profile can go up or down based on what is happening when renewable energy is not generating, according to Will Conkling, head of data center energy for Google’s Americas region. But the company is still marching toward the goal, annually boosting its carbon-free energy on an hourly basis.

“That content every year goes up and we are going to continue to try and push as close as possible to a 100% by 2030,” Conkling said. “I don’t think that it should be considered a failure or the wrong goal if we only achieve 90%, right? I think 90% is a huge accomplishment relative to where we would’ve been [had] we done nothing.”

Flexibility is also key, Sundstrom added.

Kramer agreed that clean is still important, but reliability and firm power are also becoming more important. With more intermittent resources on the grid, “we need to make sure that we have that firm and reliable power.”

More than money

Google has also invested in SMRs and geothermal among other clean energy sources. But the time it takes technologies to scale commercially is an influential factor.

“Even at Google, we can’t wish things to be true. We are to deal with the reality of technology and commercialization curves,” Conkling said. “Our goal remains as close to a 100% as possible, and we think we’re going to get really close.”

Like Google, Amazon also has invested in SMRs and other clean energy technologies that have not reached the commercial scale of solar and wind. It’s important to keep in mind that Amazon is a customer, not a project developer, Sundstrom said.

“Our SMR investments was really a step further because we are putting capital upfront for a technology that has still not yet been deployed,” he said. “In many ways I think that we are helping to close a very significant gap to ensure success of this technology.”

The technology companies are also working with utilities to find ways to build new sources of generation while being flexible and more efficient in their energy use.

In the midst of it all is the seemingly never-ending search for policy and regulatory certainty.

“There’s a lot of uncertainty around tariffs. And then the ITC and the PTC,” said Jessica Johnson, director of offtake for Clean Capital. The reconciliation bill, or President Donald Trump’s so-called “One Big Beautiful Bill Act,” passed the House and is with the Senate. Many clean energy incentives would be eliminated. The legislation eliminates the IRA’s clean electricity production and investment tax credits, among others, for facilities not under construction within 60 days after Trump signs the bill and in service by the end of 2028.

RELATED

Industry Warns of Fallout from Trump’s Anti-Clean Energy Bill

Big Bill Not Beautiful for Clean Energy Passes US House

Belcher: Senate Should Revise ‘Big, Beautiful Bill’ to Spare Geothermal

Even geothermal, which was included alongside fossil fuels supported by Trump, is at risk.

Tariffs have also been impacting the pace of developments, including solar projects that rely on inexpensive foreign parts. The last five years have been tumultuous, she said.

“What we’re seeing is energy prices go up and so you’ve got this unsettled political landscape,” she said, adding the future of the investment and production tax credits and tariffs are unknown. Outside of some large tech companies, “You’ve got buyers that are shying away … saying, ‘let’s push pause right now. Let’s see what else is out there.’”

Conkling pointed out that although energy needs are growing, an emergent situation doesn’t exist. Some regional transmission organizations say all available power is not utilized at times.

“There’s this narrative that Amazon and Google and data centers are sort of just sucking up all the energy … And in fact, Google and Amazon and others are leaning in hard with utilities to figure how to build new source generation,” Conkling said, “how to be more efficient and more flexible, how to make sure that we’re tailoring solutions such that we can grow, that utility can grow, and we don’t create reliability issues. There’s no incentive for us to have an unreliable grid.”

Comments