Although big participants in the technology industry may be able to lobby the administration to “loosen up” restrictions on new power sources, small to medium-sized players were in a “holding pattern” as they waited to see if permitting obstacles and tariffs on renewables equipment were lifted, said Ninan.
“On average, [operators] are most likely going to try to find ways of absorbing additional costs and going to dirtier sources,” he said.
Amazon, which is the largest corporate purchaser of renewable energy globally, said carbon-free energy must remain an important part of the energy mix to meet surging demand for power, keep costs down, and hit climate goals.
“Renewable energy can often be less expensive than alternatives because there’s no fuel to purchase. Some of the purchasing agreements we have signed historically were ‘no brainers’ because they reduced our power costs,” said Kevin Miller, vice-president of Global Data Centers at Amazon Web Services.
Efforts by state and local governments to stymie renewables could also hit the sector. In Texas—the third-largest US data center market after Virginia, according to S&P Global Market Intelligence—bills are being debated that increase regulation on solar and wind projects.
“We have a huge opportunity in front of us with these data centers,” said Doug Lewin, president of Stoic Energy. “Virginia can only take so many, and you can build faster here, but any of these bills passing would kill that in the crib.”
The renewables crackdown will make it harder for “hyperscale” data centers run by companies such as Equinix, Microsoft, Google, and Meta to offset their emissions and invest in renewable energy sources.
“Demand [for renewables] has reached an all-time high,” said Christopher Wellise, sustainability vice-president at Equinix. “So when you couple that with the additional constraints, there could be some near to midterm challenges.”
Additional reporting by Jamie Smyth.
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