“What’s so crazy about renewables is this [that] both policy arguments are true,” says Pier LaFarge, co-founder of Sparkfund, a utility company. “It’s the cheapest energy at the source of generation, but they also raise rates as they upgrade the rest of the distribution network.”
Simply restoring tax breaks for wind and solar energy will not be enough to prevent the worst impacts of climate change. The UCS study also modeled the costs of policies that would further decarbonize the U.S. power grid as demand from artificial intelligence increases. This includes tighter power plant regulations and greater investment in transmission upgrades needed for renewable energy. The analysis shows that this scenario would slightly increase wholesale electricity costs by about $412 billion by 2050, an increase of 7%. But the analysis shows it would avoid climate costs of up to $13 trillion: damage from floods, wildfires, droughts and other extreme weather around the world, as well as local health costs associated with dirty power plants. (Earlier this month, the EPA announced it would no longer include costs lives saved from excessive pollution when considering pollution policy around power plants.)
Much of the U.S. power grid needs major modernization, especially if the country gets serious about moving away from fossil fuels. Part of the challenge over the next few years will be ensuring that the upgrades the grid needs – with or without more renewable energy – are not unfairly forced on consumers.
“There definitely needs to be much stronger guardrails put up for the data centers themselves, and there needs to be enough power and electricity to power those data centers so that they don’t take away from other customers,” Clemmer says.
Despite the Trump administration’s aggressive attacks on renewable energy sources and breathtaking energy demand data from artificial intelligence, there is reason for hope. LaFarge believes that the increasing deployment of batteries by utilities, combined with agreements requiring data centers to pay for infrastructure and other related costs, will help lower electricity rates for regular consumers. (Unlike wind and solar credits, battery tax credits mostly passed through negotiations on one big beautiful bill). In this scenario, the United States could be more like Texas: tons of cheap wind and solar power on the grid, a few gas-fired power plants, and lots of battery installation.
“The good news is that just like the Biden administration couldn’t control the fate of the universe, neither can the Trump administration,” he says: pointing that solar, wind and storage accounted for more than 90 percent of up-to-date energy added to the grid last year. “We are building more renewables faster and in more places for purely economic reasons.”