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Biden's push for renewables is clashing with a growing demand for electricity

AYESHA RASCOE, HOST:

President Biden's signature climate law pours billions of dollars into subsidies for renewable energy like wind and solar. The goal is to convince electric utilities to switch away from fossil fuels. But as Emily Jones of WABE and Grist reports, that effort is now colliding with another challenge, rising demand for electricity.

EMILY JONES, BYLINE: Georgia is enjoying an economic boom. Just ask Governor Brian Kemp.

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BRIAN KEMP: We remain the No. 1 state in the country for business.

JONES: The state has seen an influx of new high-tech data centers and factories, and they all need electricity. That's created a problem for the state's biggest electric utility, Georgia Power. At recent hearings, planning chief Jeffrey Grubb told regulators the company needs to generate more power fast.

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JEFFREY GRUBB: It comes back to just - this is a generational change in this whole move in the economy.

JONES: So the utility wants to expand an existing power plant that runs on natural gas, a fossil fuel that contributes to climate change. But critics, from consumer advocates to the U.S. military, say the utility should be building renewables instead. Some of the most striking testimony came from young people who said it's past time to give up fossil fuels.

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NATALIE MALDIN: They must not increase their use of natural gas for energy sourcing. They must not build new natural gas plants.

SONYA DOUBLEDEE: Georgia residents are already paying higher rates. There shouldn't be an additional environmental cost on top of that.

DAKOTA TAUTEEQ: Fossil fuels kill. They kill our ecosystems, they kill our people, and more importantly, fossil fuels will kill our future generations.

JONES: That was Decatur High School student Natalie Maldin and Emory University students Sonya Doubledee and Dakota Tauteeq. A version of this debate is playing out all over the country. Power demand is growing as electricity-hungry data centers pop up to serve everything from email to artificial intelligence. Julien Dumoulin-Smith is a Bank of America utilities analyst. He says that faced with so much demand, utilities are falling back on their old standby, fossil fuels.

JULIEN DUMOULIN-SMITH: What we're seeing is a growing trend to go back to gas plants, mostly to effectively backstop the grid.

JONES: All of that is testing the heart of the Biden administration's climate policy. The 2022 Inflation Reduction Act aimed to make renewable energy a cheaper, more attractive alternative to fossil fuels. Noah Ver Beek is an analyst with the Sierra Club.

NOAH VER BEEK: It's this great big pool of money, this game-changing piece of legislation for them, with millions and millions of dollars that they can take advantage of.

JONES: He says many utilities are not yet taking full advantage of that giant pool of money. Ver Beek and his colleagues studied 50 utilities' energy plans. They found that about a third totally failed to take the new subsidies into account in their planning. Others underestimated the law's full potential, ignoring bonus incentives for competitive wages and U.S.-made technology.

VER BEEK: If you can get an extra 10% off the cost of your project, that's a lot of money that is being left on the table.

JONES: A spokesperson for the industry trade group Edison Electric Institute says it's too early to say utilities aren't taking full advantage of the law. Georgia Power does plan to use the new tax credits but says natural gas is still the most reliable option to meet the current surge in demand. When electricity use spikes, like when it's hot and everyone starts running air conditioners, the company can just turn on a gas turbine to meet the need. That's what utilities are used to doing.

SHELLEY ROBBINS: But the good news is there are now alternatives.

JONES: Shelley Robbins studies those alternatives for the national nonprofit Clean Energy Group. They can be a bit more complicated than flipping the on/off switch at a power plant. They require utilities to run the grid more creatively - for instance, by getting customers to use less energy when demand is high or drawing extra energy from a network of small batteries at homes and businesses called a virtual power plant. Georgia Power says it's considering some of these options for the future, but Robbins says more utilities and policymakers need to look beyond fossil fuels now.

ROBBINS: That voice is still there that is still speaking to legislators and to utility regulators and, you know, whispering in their ear that fossil is the only solution, and it simply is not true.

JONES: She says the only way to cut planet warming emissions is for utilities to embrace a new way of thinking. For NPR News, I'm Emily Jones in Savannah, Ga. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Emily Jones