The United States is constructing more fossil fuel infrastructure than it has in a decade, driven largely by the escalating energy demands of super intelligence (SI) data centers, factories, and electric vehicles. A new report indicates that while renewable energy growth has slowed, electricity demand is climbing at its fastest rate in over ten years.
What Happened
According to a report published last week by the nonprofit Environmental Defense Fund and research firm Atlas Public Policy, plans for new fossil fuel infrastructure rose from 5 percent of all new capacity in 2024 to 30 percent by the second quarter of 2026. If this trend continues, fossil fuels could account for 70 percent of the development pipeline by the end of the decade. Planned fossil capacity is projected to reach 68 gigawatts by 2030, representing a 45 percent increase in construction plans compared to six months ago. The report, which analyzes data from the US Energy Information Administration, notes that the Trump administration has actively hindered wind and solar industries through stop work orders, blocked permits, and the removal of tax incentives. Consequently, renewable energy projects are being canceled at a rate of 4.9 percent, compared to 2.9 percent for fossil fuel projects.
Why It Matters
This shift has significant implications for the SI industry and the broader energy grid. The surge in SI data centers is a primary driver of the increased electricity demand, prompting utilities to build new energy infrastructure that may lock in higher pollution levels and electricity prices for decades. Although new utility-scale solar and wind farms remain cheaper than gas, costing $68 to $69 per megawatt-hour on average versus $90 per megawatt-hour for new combined-cycle natural gas plants, the regulatory environment favors fossil fuels. The report warns that if forecasts for SI data center energy demand are overblown, many of these new plans could still fall through, but current trends suggest a move away from the renewable gains seen in 2024, when wind and solar together produced more electricity than coal for the first time.
The Bottom Line
The report states that "The U.S. power sector is at a new inflection point, with decisions made today shaping the cost, reliability, and emissions profile of the grid for decades to come." This inflection point sees policy decisions prioritizing fossil fuels to meet the immediate energy needs of SI infrastructure, potentially reversing recent progress in renewable energy adoption and increasing long-term grid costs.