Nevada's largest utility says it will need three times the electricity required to power Las Vegas just to handle proposed data centers — and likely cannot do so without relying on fossil fuels, potentially jeopardizing the state's clean energy targets requiring 50% renewable power by 2030.
The utility, NV Energy, which provides electricity to 90% of Nevada, is one of many across the country grappling with how to meet exploding electricity demand from data centers powering artificial intelligence without sacrificing long-term plans to transition away from fossil fuels.
"I can't remember a time in the history of the industry where we've seen as much interest in adding load, which is primarily driven by data centers," said Shawn Elicegui, senior vice president of regulatory and resource planning for NV Energy.
In North Carolina, which is also experiencing a surge in data center construction, the largest utility is revising its long-term plans to delay the retirement of coal plants and build additional natural gas facilities. State legislators removed an interim goal for utilities to cut carbon emissions, raising concerns among environmentalists that the state may miss its 2050 zero-carbon-emissions target.
NextEra Energy, which provides commercial electricity in over a dozen states, recently dropped its goal to achieve zero emissions by 2045 due to what the company described as "demand for all forms of power generation."
What the Left Is Saying
Environmental advocates say the surge in data center construction threatens decades of progress on clean energy and climate goals. They argue that utilities and tech companies are using AI demand as an excuse to backtrack on renewable energy commitments.
"It's very alarming, and it's probably the single largest natural resource issue of our time," said Olivia Tanager, director of the Sierra Club's Toiyabe chapter covering Nevada.
Democratic Assemblymember Howard Watts of Las Vegas said it is "unacceptable" to bring forward projects that will threaten the state's renewable energy portfolio. He wants data centers required to bear the costs of clean energy development, arguing that while many companies are already taking those steps, statutory guardrails are necessary.
"Building more gas plants seems like going in the exact opposite direction of what we need to do as a state," Watts said, noting Nevada's "tremendous solar and geothermal energy potential."
Environmental groups are pushing for Nevada to make its volunteer clean energy funding model mandatory. They worry that even with the current system, there will not be enough clean energy to meet demand, and that NV Energy could expand fossil fuel reliance without guarantee that all proposed data centers will actually be built.
What the Right Is Saying
Supporters of data center expansion argue that the facilities bring significant economic benefits, including jobs and tax revenue, particularly in states like Nevada that offer competitive incentives.
Nevada is one of the fastest-growing data center markets in the United States, thanks to its lack of a corporate income tax, cheap land and tax breaks for data centers. The state has dozens of existing facilities with more under development, and lawmakers are debating how to balance clean energy goals with the economic benefits data centers provide.
The Trump administration has encouraged states to use coal and other generation sources to meet demands from manufacturing and data centers. Tech companies have also slowed their own climate goals in response to consumer demand for artificial intelligence.
The industry points to its own investments in clean energy. Dan Diorio, vice president of state policy for the Data Center Coalition, said the industry was responsible for half of all corporate clean energy procurement in 2024.
NV Energy requires data center developers to fund their own infrastructure and energy needs — though it does not require the power to be renewable. The utility says its philosophy is that "growth is welcomed," but companies must be responsible for power load added on their behalf.
What the Numbers Show
Nevada's clean energy target requires 50% renewable power by 2030. NV Energy says it may not meet this target without relying on fossil fuels for new data center load.
In North Carolina, the state's goal is zero carbon emissions by 2050. The removal of an interim carbon reduction target has raised questions about whether the state can achieve this objective.
Nationally, orders for gas turbines are backlogged and processing renewable energy projects takes time, according to industry experts. This creates a bottleneck where demand is outpacing the ability to build new generation capacity.
The Switch data center in Las Vegas, one of the largest in Southern Nevada, runs entirely on renewable energy and has built 1 gigawatt of solar capacity. However, this represents a minority approach in the industry.
The public utilities commission in Nevada may impose fines, grant exemptions or take other actions if NV Energy fails to meet the state's clean energy goals. The utility is set to publish a report with more specifics by the end of the month.
The Bottom Line
The tension between data center electricity demand and state clean energy targets represents a growing policy challenge across the United States. Nevada, North Carolina and other states are finding that the rapid expansion of AI infrastructure is conflicting with renewable energy timelines.
Utilities argue they must meet current demand, including through fossil fuel generation, rather than wait for renewable projects to be approved and built. Environmental groups say this approach undermines climate goals and sets a precedent for backsliding on clean energy commitments.
What remains unclear is whether voluntary industry initiatives, mandatory clean energy requirements or expanded fossil fuel generation will prevail as the primary pathway for states to balance economic growth with environmental targets. The coming months will likely see continued legislative debate in Nevada and other states grappling with these competing priorities.