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Politico
2 days ago
- Business
- Politico
AI's energy appetite exposes a renewables rift in Washington
With help from Aaron Mak The astronomical energy needs of data centers for the fast-growing artificial intelligence industry have triggered a huge buildup of new power generation across the country — but the role that renewable energy will play in that mix is still very much up for grabs. Tech companies, which have long touted their public commitments to climate goals, have leaned heavily on renewable energy as a way to ramp up their power-hungry data centers without pumping more carbon into the air. In late 2024, U.S. data centers accounted for half of total US corporate clean energy procurement, according to an analysis by S&P Global. Now, however, the energy politics of Washington are changing — and this week's horse trading over the Senate's megabill showed that the tech industry may be shifting its stance. At the center of the debate are the tax credits for solar, wind and energy storage that were part of the Biden-era Inflation Reduction Act. Republicans running the reconciliation process on the tax bill in the House and Senate have pledged to eviscerate the subsidies. The tech industry has publicly pressed Congress to preserve those tax incentives — an issue that became urgent when the House tried to gut clean energy subsidies far sooner than the IRA timeline. A group called the Data Center Coalition — whose 38 members include Amazon Web Services, Google, Meta, and Microsoft — sent a letter last month to Senate Majority Leader John Thune, asking him to extend the deadline for building new clean energy facilities with the subsidies. The letter warned that energy constraints could hinder or delay the buildout of data centers vital to U.S. leadership in AI, and that the credits were important to being sure that new power got built. 'We urge you to take a pragmatic approach to ensure we can meet the energy needs of data centers at a pivotal moment for our industry and country,' the letter reads. The Senate did not exactly comply. In its tax proposal, the Senate Finance Committee took a more moderate approach than the House of Representatives, but still issued a plan to wind down subsidies for most renewable energy by 2028. Senate Finance Chair Mike Crapo (R-Idaho) said in a statement that his committee's portion of the megabill 'achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs.' Instead of solar and wind tax incentives, the legislation bolstered nuclear and geothermal energy. DFD asked Amazon, Google, Microsoft and Meta — some of the biggest members of the Data Center Coalition — for a response to the Senate's latest moves. None provided an answer. The Data Center Coalition, which initially pressed the Senate to keep the credits, also didn't comment on the Senate's bill. One industry player willing to address it this week was Chris Lehane, chief global affairs officer for OpenAI, whose CEO Sam Altman is an aggressive investor in clean energy. Lehane did not critique the Senate or House moving to sunset off the tax credits. Instead, he focused on permitting delays as an impediment to building new power sources. 'Ultimately … the big challenge in all of this is time,' he said, saying that slow permits were the bigger threat to getting new energy online for data centers. That view dovetails with Republican perspectives on the industry. A senior Senate GOP aide called wind and solar 'mature industries' that no longer need federal support, especially given the high demand for electricity for AI, and said Republicans were more focused on removing permitting hurdles. Climate change used to be a central tenet of tech companies' energy policy. Both Microsoft and Google once said they would be at net-zero or negative carbon emission by 2030, and invested heavily in wind and solar to meet their targets. AWS, Meta, Google and Microsoft did not provide a response on where their climate goals stand right now. OpenAI just agreed to help build data centers in the United Arab Emirates — and the source of energy for those data centers remains unclear. The apparent industry shift is frustrating to some longtime clean-energy advocates. 'Companies like Microsoft, Google, and Amazon have increasingly moved toward an 'all-of-the-above' energy strategy,' said Evan Chapman, senior director of policy at the nonprofit Clean Tomorrow. That includes nuclear, gas, geothermal and utility-owned generation — especially as AI workloads strain power systems. The final shape of energy policy in the AI era is still under construction; the reconciliation bill needs a full Senate vote and House approval before it's passed. But one thing is clear: Big Tech's original ask for keeping renewable energy tax credits isn't likely to be heeded. Lehane said OpenAI would be fine under the new policy and had not been planning to use IRA incentives as part of its massive Stargate data center project in the U.S. The company expects some of its early sites to be natural gas and solar powered, but will look to include nuclear and geothermal energy where possible, a spokesperson said. Observers say the tech sector hasn't turned against renewables. But it's not fighting for them, either — suggesting that in 2025 Washington, there's more to be gained from playing ball with Republicans than from sticking their necks out for clean energy. Local news' tech blues As Donald Trump feuds with journalists and cuts funding to public broadcasting, several blue states are scrambling for ways to protect their local newsrooms as they lose revenue to tech companies like Google and Meta. POLITICO's Tyler Katzenberger reports that Democratic legislators from five states – Hawaii, Illinois, New York, Oregon and Washington – are engaged in parallel efforts to get tech companies to compensate news outlets for using their content. These lawmakers fear that aggregating articles and posting them on Google search results and various social media platforms deprives local outlets of revenue. But it's been an uphill battle. Bills in four of those states failed this year, with only Oregon's proposal still alive. Lawmakers who pushed for the failed bills have pledged to try again. The journalism industry has a long history of trying and failing to get help from governments to stanch the bleeding brought on by digital media. In 1980, Washington Post Publisher Katharine Graham lobbied senators to block a proposal from AT&T to develop electronic yellow pages. The company was able to launch the product only a few years later. More recently, Australia and Canada passed laws requiring the likes of Meta to pay outlets for their content, though pushback from the industry has diminished their intended effects. Prosecutors seize millions in cryptocurrency The Trump administration is asking a federal judge to let it keep $225.3 million in seized cryptocurrency allegedly connected to fraud. On Wednesday, the Department of Justice filed a civil forfeiture complaint allowing the government to keep cryptocurrency confiscated during an investigation into an alleged investment fraud scheme. The department believes more than 400 people were tricked into forking over money for what they thought were legitimate cryptocurrency investments. The department conducted the investigation in conjunction with the U.S. Secret Service and the Federal Bureau of Investigation. The cryptocurrency seizure is the largest in the history of the Secret Service, which investigates the illicit exploitation of U.S. financial systems. Crooks on the blockchain have been stealing and scamming people out of cryptocurrency since the early years of the technology. By 2018, about 80 percent of initial coin offerings – the first round of token sales for a new cryptocurrency – were fraudulent according to estimates from the digital asset investment bank Satis Group LLC. President Joe Biden tried to rein in these scams, and issue a 2022 executive order directing federal agencies to implement new industry regulations and consumer protections. President Donald Trump repealed that order in January. Initially a skeptic of the technology, he's now become an outspoken booster – loosening crypto restrictions and pushing a law passed on Tuesday that would make it easier to launch stablecoins, or tokens pegged to another asset. post of the day THE FUTURE IN 5 LINKS Stay in touch with the whole team: Aaron Mak (amak@ Mohar Chatterjee (mchatterjee@ Steve Heuser (sheuser@ Nate Robson (nrobson@ and Daniella Cheslow (dcheslow@
E&E News
10-06-2025
- Business
- E&E News
Tech giants want their say in megabill tax credit fight
The tech industry is weighing into the contentious tax credit debate on Capitol Hill, urging Republicans to make specific changes to the House-passed megabill. In doing so, the companies are relying on an a well-worn Republican talking point to make their case: beating China on artificial intelligence. In a new letter to Senate Majority Leader John Thune (R-S.D.), the Data Center Coalition — a trade group that includes Microsoft, Google, Amazon Web Services and others — called for 'thoughtful and targeted changes' to help power data centers and emerging tech across the country. Advertisement 'We urge you to take a pragmatic approach to ensure we can meet the energy needs of data centers at a pivotal moment for our industry and country,' the trade group wrote.
Mint
10-06-2025
- Business
- Mint
Tech industry fights to save clean-energy tax credits
The tech industry is fighting to save clean-energy subsidies in the tax-and-spending bill working its way through Congress, a sign that access to power is a priority for the biggest artificial-intelligence companies. The Data Center Coalition, a group that includes Microsoft, Alphabet's Google, and Meta Platforms, recently made its pitch in a letter to Senate Majority Leader John Thune (R., S.D.), according to a copy viewed by The Wall Street Journal. The group asked him to preserve tax credits and loan funding that would be aggressively phased out in the version of the bill passed by the House of Representatives last month. The bill is fueling industry concerns about rising prices and power shortages if planned investments don't materialize. But garnering enough Republican support to preserve the tax credits could prove difficult because of the party's slim majorities in both chambers. The Data Center Coalition discussed the topic with about 30 Republican senators, including Thom Tillis of North Carolina, Lisa Murkowski of Alaska and John Curtis of Utah, who have expressed support for the tax credits. Other groups that count big tech companies as members, including TechNet and the Clean Energy Buyers Association, have discussed saving the credits with the same lawmakers and have been encouraged by the talks, people familiar with the matter said. Lawmakers risk disrupting business investment and local economies if they remove tax credits too quickly, Tillis said last week. 'We need to be smart about where capital has been deployed and to minimize the impact to the message we'd send businesses," he said. The House bill would require solar, wind and other projects to begin construction within 60 days of the measure's enactment to receive tax credits. It would also require the projects to come online by 2028, setting a hard cutoff for any projects placed in service after that year. Under current law, the tax credits phase out over four years, starting in either 2032 or when the U.S. power sector's greenhouse-gas emissions fall to a quarter of their 2022 levels—whichever comes later. The tight timelines in the House bill and restrictions on the origin of components of projects would be nearly impossible to meet, industry executives say. Extending the tax credits will likely be a tough battle with little room for error given pushback from fiscal hawks urging deeper spending reductions in President Trump's 'big, beautiful bill." The bill also extends expiring tax cuts, lowers Medicaid costs and provides money for border security and national defense. Republicans have a 53-47 majority in the Senate and a 220-212 edge in the House, and most members of the party with concerns about particular pieces of the bill have been careful not to draw red lines, considering those tight margins. The tech sector's push adds to the jockeying around the bill. Tech companies are the largest purchasers of clean energy and have committed to slashing carbon emissions. They have come under pressure from some environmentalists for the emissions associated with the data centers they use to train their AI models. Those centers guzzle electricity around the clock and can consume as much power as a city. 'Energy is the pacing challenge of our industry," Cy McNeill, director of federal energy policy for the Data Center Coalition, said in an interview. The cuts would hit many clean-energy ventures that tech companies have directly invested in and are counting on to meet their power demand. Companies such as Microsoft and Google have been leading backers of technologies such as battery storage and geothermal, so funding tweaks could throw a wrench in their future plans. Renewables account for most of the near-term electricity generation expected to be added across the U.S. There is a backlog of about four to five years for natural-gas power-plant equipment, making it difficult to build many more of those plants rapidly. Industry groups have also been emphasizing that energy shortages could set the U.S. back in the AI race with China, a priority for many lawmakers. Another factor that could affect the tax credits is the recent rift between Trump and Tesla Chief Executive Elon Musk. Trump has threatened to end all subsidies benefiting Musk's companies. Tesla is a big beneficiary of battery-storage tax credits and received funding over a decade ago from an Energy Department loan office that would undergo sharp funding cuts under the House bill. Many of Tesla's customers also claim tax credits for electric vehicles, solar panels and home battery systems. The House bill would get rid of tax credits for most EVs at the end of this year. The clean-energy subsidies being targeted were passed in Democrats' 2022 Inflation Reduction Act and fueled tens of billions of dollars of private-sector investment. Many of those projects have been put on pause with their funding at risk. Some tech executives now think power could be their biggest challenge for keeping up in the AI race. 'Folks are quite concerned about basic access to electricity," said Rich Powell, CEO of the Clean Energy Buyers Association. Write to Amrith Ramkumar at and Jennifer Hiller at
Wall Street Journal
10-06-2025
- Business
- Wall Street Journal
Tech Industry Fights to Save Clean-Energy Tax Credits
The tech industry is fighting to save clean-energy subsidies in the tax-and-spending bill working its way through Congress, a sign that access to power is a priority for the biggest artificial-intelligence companies. The Data Center Coalition, a group that includes Microsoft, Alphabet's Google, and Meta Platforms, recently made its pitch in a letter to Senate Majority Leader John Thune (R., S.D.), according to a copy viewed by The Wall Street Journal. The group asked him to preserve tax credits and loan funding that would be aggressively phased out in the version of the bill passed by the House of Representatives last month.
Yahoo
21-05-2025
- Business
- Yahoo
Report highlights community pushback stalling $64 billion in data center development nationwide
A representative for the Data Center Coalition speaks in opposition to a bill on data centers with Virginia Del. Josh Thomas (D-Prince William) and labor union representatives behind her. (Photo by Charles Paullin/Inside Climate News) As Elena Schlossberg of Prince William County, Virginia sees it, the community effort to fight the richest companies in the world seeking to build data centers began about a decade ago when opposition coalesced in the early days of the industry's development. Then, a couple of years ago, when people began to learn much more about the warehouse-like server farms proliferating at double the earlier rate, the fight strengthened with a meeting in Warrenton. 'That was where we all just started saying, 'OK, in order to fight this behemoth, we have to have some organizational process,'' Schlossberg said. 'We have to be able to communicate. We have to be able to support each other. We have to have a clearinghouse for all the information.' Schlossberg's group, the Coalition to Protect Prince William County, about 35 miles southwest of the nation's capital, teamed up with several other groups, including the Piedmont Environmental Council, the Sierra Club and the National Parks Conservation Association, and met in one of the areas facing development pressure that could now triple in the state. They formed the Virginia Data Center Reform Coalition. Such community opposition is the focal point of a recent report by Data Center Watch, a research organization tracking data center opposition. A key finding: '$64 billion in U.S. data center projects have been blocked or delayed by a growing wave of local, bipartisan opposition.' 'What was once quiet infrastructure is now a national flashpoint — and communities are pushing back,' the report says. 'This report highlights political risks and local opposition as frequent factors in data center project delays or cancellations, including community resistance, environmental concerns, and zoning issues.' As data center development explodes, the industry has faced particular challenges in Virginia, its global epicenter. Some $900 million in projects in the state have been blocked, and $45.8 billion in projects have been delayed. Yet, environmental advocates say few protections have been put in place. At the state level, dozens of bills were introduced in the Virginia General Assembly this year to enact development safeguards, but only a symbolic one about utility costs was signed into law by Republican Gov. Glenn Youngkin. Josh Levi, president of the Data Center Coalition, a trade group representing many of the tech companies developing projects in Virginia, said the group is 'committed to working collaboratively with local officials, policymakers, and regulatory bodies at every level. 'Data center companies site projects where they are permitted under local zoning ordinances, rules, and regulations, which are developed by local leaders representing their communities,' Levi said. 'The industry seeks to work collaboratively with local officials to minimize community impacts, which often includes participating in town halls and other community and public engagement opportunities.' The locations of projects getting blocked or delayed are mostly centered in the Northern Virginia suburbs and exurbs of Washington, where the internet began. The region now serves a vast federal government, defense and intelligence complex. A couple other projects highlighted in the report branch out into the Northern Neck, south of the Potomac River, and outside Richmond. Virginia is home to 13 percent of the world's data center capacity, while 70 percent of the world's internet traffic moves through computers in the state. One case study in the report highlighted the effort by Schlossberg's group, the Manassas Battlefield Trust and others to stop the $24.7 billion Digital Gateway development of a campus with 37 data centers in Prince William County near the Manassas National Battlefield Park. Another is the Bren Pointe residential community in Fairfax County, fighting a $165 million hyperscale project that would need transmission lines and a five-acre substation 60 feet from the boundary of a townhome complex. In another project in Warrenton, proposed by Amazon with an undetermined development cost, hundreds of people, including actor Robert Duvall, attended and spoke in opposition, according to FauquierNow. Legal challenges have stalled the town council's approval of the project, and during that period, council members who supported it have been voted out of office. The report noted that Republican elected officials made up 55 percent of those critical of projects, expressing concerns over the use of tax incentives. Democrats made up 45 percent of those opposing projects, largely over environmental concerns. But many elected officials are approving data centers. 'What will it take for people in positions of power to make different choices?' Schlossberg said. 'As plain as the nose on my face, data centers are impacting the integrity of our water and our air and our communities and our reliable, affordable electricity.' Ann Wheeler, former chair of the Board of Supervisors in Prince William County, declined to comment on why she lost her Democratic primary race for re-election, but stood by her choices to support the industry in today's digitally driven society. The environmental concerns used 'misinformation' as part of a campaign of BANANA, or Build Absolutely Nothing Anywhere Near Anyone, she said, and supporting the facilities' construction meant union jobs and hundreds of millions of dollars in local revenue to support social services her party has traditionally aligned with. 'They'll go in somewhere,' Wheeler said, adding her county had resources for responsible planning. 'I would rather have that tax revenue in Virginia.' The report did not feature the opposition to a proposed data center in Pittsylvania County. There, community pushback and a report commissioned by the Southern Environmental Law Center, which highlighted the health effects from on-site, fossil fuel-powered generation equipment, led to the Board of Supervisors rejecting a needed rezoning application, effectively killing the project. The report included other case studies of successful data center opposition in Indiana, Texas and Arizona. Virginia's legislative research arm, the Joint Legislative Audit and Review Commission, issued a report in December that comprehensively examined the costs of data center development. It found that data-center energy demand would roughly triple from 2023 to 2040 if development went unconstrained. Even so, the legislative protections proposed this year failed to make it across the finish line. Youngkin vetoed a bill that would have had localities require a description of substation needs and a study on the noise the facilities close to homes and schools generate, which can come from their air conditioning units, and onsite power generators. House Democrats killed a requirement for state regulators to review data center power contractsto ensure that electricity generation and transmission lines could support the need. One change that did pass requires the State Corporation Commission, which regulates utilities, to review cost allocations for data center projects between consumers and the center operators. The commission already had that authority. One Republican lawmaker, Del. Ian Lovejoy of Prince William County, pushed for ways to have the industry pay for the electric grid upgrades it necessitates. But debate on the bills married business and labor union interests, which 'usually are opposed to one another,' Lovejoy said. 'When those two groups agree on something, [there are] very difficult headwinds.' The General Assembly was also leery of interfering with local land use decisions in an election year, Lovejoy said. All 100 delegates are up for election this year, along with the governor. Democrats control the chamber 51-49. The state Senate, also controlled by Democrats, 21-19, has elections in two years. A similar debate driven by community opposition to new solar projects also took place this year in the legislature. Community opposition to data centers, Lovejoy said, 'is going to affect more and more people when they build data centers directly next to houses. That's the cautionary tale. Look at Loudoun [County], look at Prince William. Don't build them next to schools, don't build them next to houses. Make sure they're set back properly, or you're going to have the same issues that we're having.' Schlossberg said members of her group traveled a couple of hours down to Richmond one early morning during the legislative session earlier in the year. They were there to lobby for the swath of data-center bills as part of the group's increasing battle at the local, state and federal level that is costing the industry money and creating a community of opponents. 'I think it's important to really talk about the building of community,' Schlossberg said. 'In a digital world, I think we have seen people who have never felt lonelier. And I think that's been a really important positive outcome, is that people connect.' This article originally appeared on Inside Climate News, a nonprofit, non-partisan news organization that covers climate, energy and the environment. Sign up for their newsletter here.
