Southern CEO: Data Center Demand, Regulatory Changes Could Keep Coal-Fired Units Online

Wedoany.com Report-Nov 14, Utilities recognizing the need to produce more electricity, in part to satisfy demand from data centers, may keep coal-fired units in operation longer than anticipated. A lessening of environmental regulations under the incoming Trump administration also means power generators are rethinking plans to retire their fossil fuel-burning facilities.

Chris Womack, CEO of Southern Co., is the latest executive to acknowledge that coal-fired power could get a reprieve as utilities plan their future generation strategies. Womack, speaking at Edison Electric Institute’s (EEI) Financial Conference in Hollywood, Florida, on Nov. 12, told Bloomberg that increasing demand for electricity means his company is looking at all of its options to provide the needed power.

Womack told Bloomberg that increased power demand from data centers and other commercial and industrial properties will require utilities to have an “all of the above” plan when it comes to generation. Womack said that Southern as part of its strategy could extend the life of its four-unit, 3,450-MW Plant Bowen coal-fired facility in Georgia.

“As we look at responding to demand growth, looking at coal operating longer is a consideration,” Womack said. “Maybe those units [at Bowen] get extended further into the next decade before they retire.” Womack noted that regulators would be part of the decision-making process; he also said Southern would not change its plan to be net-zero on carbon emissions by 2050.

Womack’s comments come one week after a Duke Energy executive said that company would continue to burn coal at some Indiana power plants, rather than converting them to run on natural gas, should environmental regulations change. Duke in its latest integrated resource plan (IRP) extended the utility’s timeline to be coal-free from 2035 to 2038, and also scaled back plans to expand its use of renewable energy resources.

Executives from several technology companies met with U.S. government officials in September to discuss how coal could fit into strategies that support infrastructure for artificial intelligence (AI) and data centers. Part of the discussion was about repurposing old coal sites as data center campuses. The U.S. Dept. of Energy has said it will work with developers on plans to repurpose former coal mines and coal-fired power plants in support of AI infrastructure.

Maksim Sonin, an energy expert who has collaborated with several companies, including Chevron and Shell, and is a Sloan Fellow at the Stanford University Graduate School of Business, in October told POWER: “Driven by recent trends in AI development, projected power consumption by data centers in the U.S. is expected to increase in the range from 8% to 17% by 2030—or potentially even higher, as progress in AI technologies is not linear but exponential, as seen in Silicon Valley today. With this sharp upward trend, it is highly likely that coal-fired power plants will remain a part of the U.S. energy system for longer, although their role is expected to diminish” as more renewable and other energy resources come online.

Womack on Tuesday said that increasing demand for electricity is a reason to postpone the retirements of coal-fired units. He also acknowledged that an easing of emissions rules under a Trump administration likely would support running coal-fired power plants longer than previously expected.

Georgia Power, the Southern Co. subsidiary that operates Plant Bowen, has said it does not have a set retirement date for the facility, though it has proposed shutting down Units 1 and 2 at the plant by year-end 2028. The company in its 2022-filed IRP said it wanted to close most of its coal-fired fleet by 2028, and exit coal-fired generation by 2035.