Data centres boost the energy transition
The data centre boom has triggered an acceleration in the buildout of new power plants.
The surge in data centres has accelerated the construction of new power plants, particularly in Europe, where renewables and battery capacity investments have increased. In the US, contrary to conventional wisdom, a study revealed that the data centre buildout has boosted the construction of renewable power plants rather than gas power plants.
This trend was observed in regions with the lowest energy costs, such as Texas, Virginia, Ohio, and Nevada. The US study from 2022 to the end of 2025 showed that most new power capacity additions were from renewables, with only a small fraction from gas power. Despite government efforts, the energy transition in the US continues, as renewable energy is cheaper than building new gas power plants.
When overlaying the location of new data centres with new power plants, it was found that areas with new data centres saw a more accelerated buildout of renewable energy and battery storage systems compared to areas without data centres. Gas power plant buildouts accelerated in data centre areas as well but to a lesser extent. Therefore, the introduction of data centres in an area increases the demand for power, which is more likely to be provided by renewables and battery storage rather than gas. However, this information may not be widely known in regions like Texas.
Written by urgent.news from Klement on Investing's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
