How Trump’s AI, crypto push would spur clean energy

The giant data centers behind AI models and crypto farms consume so much power that they will require every possible source of electricity generation, including renewables such as solar and wind, industry executives say.

Data centers put unique stress on the power grid by sucking up energy around the clock on top of short bursts of even more electricity. A new breed of giant data centers each need as much energy as a midsize city.

“We already don’t have enough electricity to meet the demands of these server farms, whether it’s AI or crypto," said Sen. Kevin Cramer (R., N.D.), who has discussed energy strategy with Trump and his advisers.

That is why the U.S. needs as much energy as it can generate including from renewables and fossil fuels, Cramer said. He supports former North Dakota Gov. Doug Burgum, a Republican and Trump’s pick for interior secretary who is slated to head the White House’s National Energy Council.

Investors are buying shares of power companies to bet on rising demand from data centers and the all-sources strategy. An exchange-traded fund tracking big utilities has risen more than 20% this year, the second time in the past decade it has climbed that much.

Natural gas and renewables will continue to account for the bulk of new electricity generation, utility executives say. A gusher of solar and wind projects waiting to connect to the power grid likely represent the fastest path to raise electricity demand. New nuclear plants some technology giants are considering would take a decade or more to construct.

“Renewables are poised to supply immediately what no one else can do, and that growth will be explosive," said Sheldon Kimber, chief executive of renewable-energy developer Intersect Power.

Intersect recently said it would join with Google and investment company TPG on renewable-power and battery-storage projects for data centers. The companies are targeting $20 billion in investments by the end of the decade.

Technology behemoths driving AI, including Google and Microsoft, have made ambitious pledges to cut carbon emissions. The companies are plowing billions of dollars into zero-carbon energy sources such as nuclear and geothermal power from under the earth’s surface.

“The demand swell that’s unfolding is really going to push and advance a lot of clean-energy technologies," said Chase Lochmiller, CEO of Crusoe, a startup that aims to power data centers and AI infrastructure with clean energy. Crusoe recently raised $600 million from investors including Peter Thiel’s Founders Fund, Nvidia and Fidelity.

The likelihood that Trump could inadvertently trigger a surge of investment into clean energy runs counter to fears the sector is in for a reckoning. Trump has vowed to pull out of the Paris climate accord, as he did during his first term. The U.S. rejoined under President Biden.

Trump has said he wants to repeal Biden’s 2022 climate law. But the law has bipartisan support in Congress. Trump has criticized wind energy and electric vehicles, though he softened his stance on EVs after Tesla CEO Elon Musk began backing his campaign.

In a post announcing he was naming venture capitalist and Musk ally David Sacks as AI and crypto “czar," Trump said the two industries are “critical to the future of American competitiveness." Trump has said increasing energy production would be key to winning the AI arms race with China and other countries.

He has also proposed accelerated permitting for companies that invest more than $1 billion in the U.S., which would give a boost to clean-power efforts such as transmission lines across states.

After the election, OpenAI, the maker of the popular ChatGPT chatbot, put out an “infrastructure blueprint" for the U.S. that included streamlined state and federal permitting for solar, wind and nuclear projects as well as a law to speed transmission and gas pipeline construction.

Tech and energy executives say they need such projects to meet U.S. electricity demand that is forecast to increase nearly 16% by 2029, according to consulting firm Grid Strategies. “We’re going to need every kind of resource that’s ready and able to get built," said Shashank Sane, who leads energy developer Invenergy’s transmission business.

The company is working on a giant transmission project to carry wind and solar power from Kansas to Missouri, Illinois and Indiana. The Energy Department’s Loan Programs Office recently said it would lend Invenergy nearly $5 billion for phase one of the project taking power from Kansas to Missouri.

The data-center frenzy is also fueling investment in new natural-gas gas plants. Facebook parent Meta Platforms recently said it would spend $10 billion on a data center in Louisiana, prompting the utility Entergy to build three new gas plants and new solar and battery storage projects.

“I can’t think of a time that the gas business has had more fun than they’re having right now," Scott Strazik, CEO of gas turbine maker GE Vernova, said recently.

Write to Scott Patterson at scott.patterson@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com