States are struggling to meet their clean energy goals. Data centers are
to blame
[April 09, 2026]
By JESSICA HILL
LAS VEGAS (AP) — Nevada's largest utility says it will need three times
the electricity required to power Las Vegas just to handle proposed data
centers — and it probably can't do that without fossil fuels.
That means the utility could miss Nevada's clean energy targets
requiring 50% renewable power by 2030.
“I can’t remember a time in the history of the industry where we’ve seen
as much interest in adding load, which is primarily driven by data
centers,” said Shawn Elicegui, senior vice president of regulatory and
resource planning for NV Energy, which provides electricity to 90% of
the state.
It's one of many utilities across the country grappling with how to meet
the exploding electricity demand for data centers to power artificial
intelligence without sacrificing long-term plans to move away from
fossil fuels in favor of renewable and zero-carbon sources.
In North Carolina, which is also seeing a surge of data centers, the
largest utility is revising its long-term plans to delay the retirement
of coal plants and to build more natural gas plants. Legislators removed
an interim goal for utilities to cut carbon emissions, spurring concern
from environmentalists that the state might miss its goal of zero carbon
emissions by 2050.
NextEra Energy, which serve commercial electricity in over a dozen
states, completely dropped its goal to reach zero emissions by 2045 due
to the “demand for all forms of power generation,” the company said in a
recent business filing.
The Trump administration has encouraged states to use coal to meet the
demands from manufacturing and data centers. Tech companies are also
slowing down on their own climate goals to meet the consumer demands for
artificial intelligence.
“It’s very alarming, and it’s probably the single largest natural
resource issue of our time,” said Olivia Tanager, director of the Sierra
Club’s Toiyabe chapter covering Nevada.
Nevada is one of the fastest-growing data center markets in the U.S.
thanks to its lack of a corporate income tax, cheap land and tax breaks
for data centers. There are dozens already with more on the way. Now
lawmakers are eyeing more regulations and debating how to balance both
the state's clean energy goals with the economic benefits data centers
bring.
Some data centers say they want to be part of the solution; the industry
was responsible for half of all corporate clean energy procurement in
2024, said Dan Diorio, vice president of state policy for the Data
Center Coalition.
But renewable energy’s contribution to the power grid is not growing
fast enough. Nationally, orders for gas turbines are backlogged and
processing renewable energy projects take time, industry experts say.
One Vegas data center built its own solar fields
South of the Las Vegas Strip, the Switch data center stretches for
nearly a square mile (kilometer). It’s the largest data center in
Southern Nevada, and it runs entirely on renewable energy, according to
Jason Hoffman, chief strategy officer. Unlike other data centers, Switch
is licensed to build its own sources of renewable energy at the scale of
a utility company. It has built 1 gigawatt of solar energy and is in the
process of building more solar fields, he said. The company only uses NV
Energy's grid for the delivery of electricity, and it sources its own
power from third-party suppliers.
Inside of the massive buildings, hundreds of servers hum within gigantic
soundproof and waterproof chambers. They contain vital information for
Switch’s clients, including major banks, streaming services, online
shopping websites, casinos and state and local governments.
[to top of second column]
|
Lights illuminate a Switch data center, Wednesday, April 1, 2026, in
Las Vegas. (AP Photo/Ty ONeil)
During the summer heat, when more energy is required to keep the
equipment cool, Switch can remove itself from the grid and be
self-sufficient, Hoffman said. The data center is designed to
require minimal air conditioning during the rest of the year.
Many other utilities and tech companies are turning to gas-fired
generation to power data centers, including the controversial xAI
data center near Memphis that is using mobile gas turbines strapped
to semitrucks.”
Tanager, of the Sierra Club, said multiple proposed data centers in
Northern Nevada would use hundreds of low-quality diesel-powered
backup generators that will worsen air quality. Data centers have
backup generators in case the power goes out and are not used often.
At a recent seven-hour legislative meeting, Nevadans complained to
lawmakers about the noise data centers produce, and their worries
about how the centers will affect water supply and energy bills.
Residents of Boulder City, home of the Hoover Dam, are also opposing
a proposed center for similar concerns.
State provides financial incentives for clean power
NV Energy requires data center developers to agree to fund their own
infrastructure and energy needs — but it doesn't have to be
renewable.
Nevada designed a volunteer funding model that allows companies to
put up money for NV Energy's clean energy development then count it
toward their corporate energy goals. It was the first such model of
its kind in the country and led to the development of a geothermal
plant in Northern Nevada with Google as a partner.
Environmental groups want the state to make that model mandatory,
but still worry it wouldn't bring enough clean energy to meet
demand. They also worry NV Energy could expand its reliance on
fossil fuel without the guarantee that all the proposed data centers
will be built.
NV Energy will require companies to sign contracts ensuring their
commitment to the state before energy is built, Elicegui said. The
utility's philosophy is that “growth is welcomed,” but that
companies need to be responsible for power load added on their
behalf “whether they show up or not.”
The public utilities commission in Nevada may impose a fine, grant
an exemption or take some other action if it determines NV Energy
failed to meet the state’s clean energy goals. The utility is set to
publish a report with more specifics by the end of the month.
Democratic Assemblymember Howard Watts of Las Vegas said it is
“unacceptable” to bring forward projects that will threaten the
state's renewable energy portfolio. Watts wants to see it required
that data centers take on the costs of clean energy development.
While many companies are already taking those steps, putting those
guardrails in statute is necessary, he said.
“Building more gas plants seems like going in the exact opposite
direction of what we need to do as a state," he said, noting the
state has “tremendous solar and geothermal energy potential.”
All contents © copyright 2026 Associated Press. All rights reserved |
