The Energy Vibe Shift Is Real

Decarb is dead. Data center demand is the new "it" girl

In this week’s piece, we offer a few broader thoughts about the changing feel of the energy policy debate mid-way through 2025 and the state of the industry.

Decarbonization is Dying

For the past 20 years, every year that passed saw the lens of energy policy focused more and more on decarbonization—even over historical priorities such as reliability and affordability. The justification for doing so was an endless array of fear-mongering based around the “climate crisis”:

“The climate crisis demands we act with urgency.” - Former President Joe Biden

“The cost of doing nothing is catastrophic.” - WA Governor Jay Inslee

“We can’t afford to ignore the climate crisis—it’s a threat to our way of life.” - MI Governor Gretchen Whitmer

“We are fighting for the survival of the planet… the cost of inaction is far greater than any investment we make now.” - Senator Bernie Sanders

These alarmist views shaped energy policy during the Obama and Biden presidencies, and at the state level during the Trump admins.

The Weaponization of State and Federal Policies

During the Obama administration, reducing greenhouse gas emissions was a top priority, first by attempting to pass Cap and Trade legislation, and later enacting a slew of regulations like the Mercury and Air Toxics Standards, Clean Power Plan, Effluent Limitation Guidelines, and Coal Combustion and Residuals rules to hamstring the coal industry by inflicting death by one thousand cuts.

Even during the first Trump administration, there was a concerted push by states and corporations to enact climate policy. States continued pushing policies like 100 percent renewable or carbon-free mandates, many with no cap on electricity rate increases, which were helped along the way by AstroTurf movements like Minnesota Can’t Wait. Corporate America also sought to influence the decisions of companies by attempting to institutionalize Environmental, Social, and Governance (ESG) standards into everyday commerce.

The Biden years represented the high-water mark of the decarbonization movement. The federal government took a whole-of-government approach to reducing emissions, resulting in too many policies to list them all here. Some of the most pernicious actions involved attempting to use levers like financial regulations to enforce ESG for private companies through Scope 3 emissions reporting, further weaponizing the Environmental Protection Agency (EPA) to enact onerous greenhouse gas regulations on coal and natural gas power plants, and passing the so-called “Inflation Reduction Act” (IRA), the largest spending spree on climate initiatives in American history.

It felt as if the entire world was on a collision course aimed at skyrocketing electricity costs and rolling blackouts as our “betters” lectured us about the importance of being happy being used as a “virtual power plant,” i.e. curbing their electricity use when the wind wasn’t blowing or the sun isn’t shining. This grand vision was laid out by former Energy Secretary in the Biden administration, Jennifer Granholm, who told America in 2022, “We need to align electricity use with when clean energy is available… it’s about smarter consumption to support our climate goals”

A live look at virtual power plants in the movie The Matrix

Then it all suddenly evaporated overnight. As if by magic, the entire energy narrative felt like it switched from decarbonization to meeting the exploding demand for power to run data centers in the span of about eight months.

Long Live Data Center Demand

For decades, irresponsible energy policies focusing on decarbonization reigned supreme at the state and federal level. And while being so careless is never a good idea when it comes to energy, the backbone of our entire society, it’s much easier to get away with it when load growth is stagnant because new “clean energy” sources only need to replace existing plants (which is a challenge by itself) and not meet future demand growth.

As you can see in the graph below, calls for decarbonization in the late 2000s and throughout the 2010s came at a time when electricity demand growth was largely flat in most states.

This is no longer the case, and it’s having a major impact on the trajectory of the energy industry. Data center demand projections have become the new “it girl” on the energy landscape, relegating technologies like green hydrogen or direct air capture to the dustbin of unrealistic ideas that maybe no one ever took seriously.

Seemingly overnight, data center load growth projections switched the narrative from a “climate crisis” to an “energy crisis.”

McKinzie projects that data center demand will grow from 5.2 percent of U.S. power consumption in 2025 to 11.7 percent in 2030, constituting a 17.6 percent compound annual growth rate in this sector.

The massive quantities of power needed for data centers every hour of every year have left utilities and developers scrambling for reliable megawatts of power, resulting in the natural gas turbine manufacturers selling out their inventories years in advance, the revival of shuttered nuclear plants, and causing coal plants to delay their retirement dates.

Solar Bros Change Tactics

The vibe changes have forced the solar, wind, and battery bros to adapt to the new energy landscape and change tactics in a desperate scramble for relevancy in a world where decarbonization is deeply deemphasized.

No longer able to self-righteously clutch their climate pearls, they are now pretending that their preferred intermittent technologies are necessary to meet rising electricity demand for data centers, leading to the laughable idea that solar and batteries will now provide “baseload” power.

Lampooning the absurdity of baseload solar deserves its own EBB piece, and we plan on providing that service to our readers in the near future. But for now, the transformation of the discourse from solar as a means of decarbonizing to a means of powering data centers, as laughable as that may be, may be the clearest evidence that the tone and focus of the energy debate has entered a new era.

Red/Blue Vibe Divide

Data center demand has given industry watchers something to look for, but backlash against the decarbonize-at-any-cost movement has been building for years due to rising prices and warnings of reliability issues. While many of us have been sounding the alarm on an emerging energy crisis for years, data centers have made the issue impossible to ignore.

This blowback was partially embodied in the reelection of Donald Trump as the President, as the contrast between his proposals and the policies of the Biden/Harris administration was glaring. Trump’s new all-of-government approach to growing our energy supplies and his criticisms of wind and solar have undoubtedly aided in changing the way Americans think about energy.

For years, Republicans carelessly adopted the language of supporting an “all of the above” energy strategy. This was an ill-advised preemptive surrender on the energy issue because President Obama, who popularized the phrase, never believed in this approach. It was simply a shiny slogan for more wind and solar, and a clever way of getting the ball rolling only for the goal posts to shift along the way.

However, now it feels like Republicans (except those in the U.S. Senate, apparently) have finally come to the broad understanding that wind and solar are expensive, unreliable, and destructive to their communities. There’s data to back up the vibe shift.

According to Pew Research, Republican support for solar power has fallen 26 points from 2016 to 2025. Support for wind among Republicans has cratered by a jaw-dropping 37 points during that time, and now a majority on the Red Team do not favor developing more wind power.

Interestingly, in 2016, Republicans favored wind and solar more than conventional energy development like offshore drilling, hydraulic fracturing, nuclear power, and coal mining. Now these technologies enjoy much more Republican support than wind and solar, and the folks at enviro-funded, phony conservative think tanks like the American Conservation Coalition, Conservative Energy Network, and the R-Street Institute, are the hardest hit from the trend.

Another poll from the Associated Press (AP) shows the same trend: support for expanding solar panels and offshore wind farms fell for Republicans, Independents, and even Democrats, while support for reducing their footprint rose for every group.

Independent views generally represent a good gauge of where the country is headed (in the last five presidential elections, the victor won the Independent vote) and now the majority of them no longer support an expansion of wind and solar. If that wasn’t all, the major shift in Democrats from 83 percent to 68 percent in favor of solar expansion is yet another example of the dramatic vibe changes occurring in the world of energy.

Conclusion

After 20 years of constant drum pounding for reducing emissions, it is surreal to think the entire energy landscape shifted to something entirely different in less than a year.

The choice presented in energy policy now appears to be: build reliable power plants to increase energy supply for industries like data centers, or continue to retire fossil fuel generators and build wind, solar and batteries to focus on decarbonization.

Realistically, near-term demand for data centers will require a lot of natural gas capacity. For now, focusing on decarbonization would mean wind, solar, and battery storage facilities that simply won’t be able to provide the Always On power needed for data centers. Nuclear power, if it can eventually become cost-competitive with other generating technologies in the states, has the most potential to allow for both an increase in reliable energy supply and a decarbonization of the electricity grid.

Power Systems- Lets Talk About Inverter Based Resources by Kilovar 1959

Regulatory Impact Analysis for the Proposed Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units- by the US EPA. A page turner if we’ve ever read one.