December 1, 2017 Read More →

Tech-Sector Backlash Against U.S. Coal Bailout Plan

Bloomberg News:

Selling custom nose rings, crocheted bunnies and hand-carved Santas is energy-intensive stuff.

Just ask Etsy Inc., the go-to marketplace for crafts that doubled its electricity use in two years to feed power-sucking data centers that keep the $2.8 billion-a-year business running. It’s one of the many technology giants including Amazon.com Inc. and Alphabet Inc.’s Google demanding cheaper — and cleaner — electricity as their data demands grow.

This hunger for power has set Silicon Valley on a collision course with the Trump administration, which is working up a plan to keep coal plants afloat by raising electricity prices. As a rare source of demand growth, these tech firms have become formidable advocates for clean energy. They’ve contracted enough renewable energy to displace at least 12 coal generators, and some are paying millions to sever ties with utilities to find their own supply.

Big Tech is no longer “afraid to throw around their weight or their ability to influence — some might say bully — their local utility or local governments in what they want to get,” said Lucas Beran, a senior research analyst on IHS Markit’s data center and cloud team.

It’s easy to see why the companies have become such advocates. Power used by all the nation’s data centers is set to climb 4 percent from 2014 to 2020, according to an Energy Department report. Server farms now draw enough electricity to light up Las Vegas and the rest of Nevada, twice over. Etsy alone used 10,679 megawatt-hours last year — enough to supply 1,000 homes.

While coal still accounts for about a third of U.S. electricity, it’s losing ground to cheaper natural gas, wind and solar. Hundreds of mines have shut in recent years, and President Donald Trump campaigned on a pledge to revive them. His administration is now calling on the Federal Energy Regulatory Commission to enact a plan that would subsidize coal-fired power plants.

This is part of a series looking at Trump’s plan to rescue coal. Read the last story here.

In a letter last month, Etsy called on regulators to reject Trump’s plan, which it described as a barrier to “making creative entrepreneurship a path to economic security.” Separately, a group that includes Amazon and Microsoft Corp. said the administration is overlooking the potential of renewable power, grid technology and energy storage, warning that the proposal would create “burdensome out-of-market costs on consumers like our companies.”

Their push for clean power extends well beyond Washington. Alphabet has called on utilities to create “buy-as-you-go” renewable energy programs. The demands of modern electricity consumers have outgrown the standard utility business model designed “for a bygone era,” it said in a white paper last year. The Mountain View, California-based company, which runs the world’s largest online search engine, has signed contracts to buy 2.6 gigawatts of renewable energy that it said will lead to $3.5 billion of investments.

More: From Yarn Bunnies to Amazon, Tech Fights Trump Coal Plan

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