US data centers get thirstier for power; EU approves laws to boost local content
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US data center builders hike power requests - utility
U.S. utility Dominion Energy is receiving growing power requests from data center developers and expects to supply a further 15 more data centers by the end of the year, company executives said on May 2.
Dominion's service territory includes Northern Virginia, the world’s biggest data center market with more than 250 facilities owned by Amazon, Alphabet, Microsoft and others.
A growing thirst for data processing and storage is driving up U.S. power demand and creating new opportunities for solar and wind developers.
Total U.S. power demand from data centers will double to 35 GW by the end of the decade, property consultants Newmark said in a report in January.
"The way data centers are ramping up is faster than they have before and their requests are bigger than they've been before," Dominion CEO Robert Blue said at the group's first-quarter earnings on May 2. Dominion has connected 94 GW of data center capacity in the past five years, he said.
After historically requesting electricity capacity demand of about 30 MW, data center developers are now requesting two to three times that amount, Dominion executives said. Projects with multiple data centers can require several gigawatts of capacity.
The power demanded by data centers in Virginia is forecast to quadruple over the next 15 years, a spokesperson for regional utility Dominion Energy told Reuters Events in February.
Virginia's total power demand is forecast to rise 85% over that period and data centers and electrification will be the "two primary drivers," the spokesperson said.
The technology groups behind the growth in data centers are attracted to the clean power credentials of solar and wind. Low costs have made solar the primary choice for most U.S. power installations in the coming years and tech titans are continuing to sign large power deals that help finance new projects.
Biden completes reform of environmental act to speed up solar, wind
The White House completed its reform of the National Environmental Policy Act (NEPA) on April 30 in its latest bid to speed up the approval of solar, wind and power transmission projects on federal lands.
The reforms are the second and final phase of adjustments to NEPA by the Biden administration and follow overhauls to the act in 2021 by the previous Trump administration. Earlier last month, the Interior Department issued a final rule on new regulations that will reduce costs and streamline permitting on federal land, doubling down on interim regulations imposed in 2022.
The NEPA reforms include clear one- and two-year deadlines for federal agencies, page limits for reviews, and tasks lead agencies with coordinating the process, the White House's Council for Environmental Quality (CEQ) said.
The reforms also create new ways for agencies to establish more streamlined reviews for transmission lines and other projects on land that has already been disturbed.
"This will make it faster to build a variety of projects on federal lands from solar and storage facilities to new carbon capture ventures," the Solar Energy Industry Association (SEIA) said in a statement.
"We are pleased to see that the Council on Environmental Quality implemented many of SEIA’s common-sense suggestions to both protect the environment and make it easier to build clean energy projects on public land," the industry group said
The Biden administration aims to decarbonise the power sector by 2035, requiring a massive expansion of solar and wind capacity.
The 245 million acres of U.S. public land managed by the Interior Department's Bureau of Land Management (BLM) represent around 10% of the country's entire land area but host just 6% of national installed solar capacity and 1% of wind, according to data in 2022. Much of the land lies in 12 western states and the Rockies.
U.S. utility-scale solar installed by end of 2022
(Click image to enlarge)
Source: Berkeley Lab, October 2023
In January, the Interior Department expanded its Western Solar Plan for priority development on public lands to include Idaho, Montana, Oregon, Washington and Wyoming.
The Western Solar Plan offers a combined environmental impact statement to developers in areas with high solar potential and minimal conflict with other uses and was last updated in 2012 to cover areas in California, Nevada, Utah, Colorado, Arizona and New Mexico.
The new plan proposed by the Interior Department identifies 22 million acres for priority solar access across the 11 states and reflects rising demand for clean energy capacity and advances in solar technology. The areas lie within 10 miles of existing or planned transmission lines to minimise costs and reduce the risk of delays during development.
EU Parliament approves law to boost local manufacturing
The European Parliament has approved the Net Zero Industry Act (NZIA) that aims to ensure 40% of clean technology products deployed in the European Union by 2030 are supplied by local companies.
The EU is heavily dependent on Chinese solar manufacturers and European suppliers are concerned that tax credits in the U.S. Inflation Reduction Act will also damage their competitiveness and lure investors away from Europe.
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Under the new act, at least 30% of the volume of renewable energy auctioned by public authorities must include pre-qualification and non-price award criteria to encourage developers to source materials from EU suppliers. Permits for solar manufacturing will be accelerated.
EU solar manufacturers have welcomed the support package but have called for more urgent emergency aid following a surge in exports from China that has driven solar prices far below the cost of manufacturing in Europe.
Europe faces the widespread closure of solar factories within months without emergency support measures from EU authorities, the European Solar Manufacturing Council (ESMC) warned in a letter to the European Commission (EC) in January.
The NZIA is now set to become law next month but it could take years for some member states to implement the measures.
"The importance of the Net-Zero Industry Act can’t be understated and is demonstrated by its rapid negotiation and conclusion – few EU laws are introduced and agreed within a year," Dries Acke, Deputy CEO of industry group SolarPower Europe, said in a statement.
"Of course, the NZIA is only one part of the story, while landing the NZIA sends a strong signal, it doesn’t negate the need for emergency support and for a structural EU fund for scaling solar manufacturing soon," Acke said. "Some manufacturers have weeks left of survival, this emergency requires urgent action from EU and national authorities."
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