The United Nations Secretary-General, António Guterres, urged Big Tech to run data centers on 100% renewable energy by 2030. While the cost of renewables continues to decline, significant advancements are needed in grid management and the development of clean, base-load power for data centers to operate without relying on coal or gas-fired power plants.
“AI can boost efficiency, innovation and resilience in energy systems, and we must make profit of it. But it is also energy-hungry,” Guterres said on Tuesday, July 22.
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Guterres noted that in the next five years, the energy needs from Big Tech data centers are expected to skyrocket and consume as much electricity as Japan. He said, “This is not sustainable, unless we make it so.”
Guterres’ comments were bolstered by the release of a report from the International Renewable Energy Agency, which found that 91% of new renewable power added to the grid was less expensive than the lowest-cost non-renewable alternatives.
The comments come as the growth of AI is testing the progress of the energy transition from traditional power plants to a range of renewable technologies, including wind, solar, batteries, and geothermal energy. Electric utilities across the U.S. are planning to add new generation, most of it gas. Meanwhile, Big Tech companies are forming partnerships with energy companies. Although most tech companies have clean energy goals, their data centers require continuous power, necessitating new energy technologies to scale up quickly.
How cost-competitive is renewable energy?
The International Renewable Energy Agency’s latest report , analyzing a database of more than 25,000 utility-scale energy projects, found that worldwide, 91% of newly commissioned utility-scale renewable capacity in 2024 delivered electricity at a lower cost than the cheapest new gas or coal plant.
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Installation costs for utility-scale solar power are down 87% since 2010, according to a report from the International Renewable Energy Agency.
The report found that the average installation costs for a kilowatt of solar capacity fell 87% since 2010. Onshore and offshore wind installation costs dropped 55% and 48% over the same period.
The report also examines the levelized cost of electricity (LCOE), which takes into account lifetime operational expenses. Measuring levelized costs, solar now costs just 4.3 cents per kilowatt-hour on average globally — a 90% reduction since 2010. Onshore wind dropped 70% to 3.4 cents per kilowatt-hour.
Those levelized costs come cheaper than combined-cycle gas power plants at 8.5 cents per kilowatt-hour and coal power at 7.3 cents per kilowatt-hour, according to IRENA. Based on these estimates, renewables are around 40-60% less expensive.
However, some energy experts are cautious about drawing too many conclusions from the report.
“I am wary of comparing alternatives based on LCOE alone,” said Edson Bortoni, a professor at the University of Itajubá in Brazil, in a social media post. He said levelized costs do not capture the “intermittent nature of renewable energy” or how much it would cost to “make them dispatchable” using energy storage so the power can be harnessed on demand.
The IRENA report did find 17 projects with renewables and battery storage in the U.S. that achieved costs comparable to combined-cycle gas turbines and significantly below coal-fired generation.
The global report also does not reflect geographical differences in cost. In the U.S., natural gas is slightly less expensive than the global average, while coal is more expensive. Wind and solar are also slightly more expensive, but remain competitive with combined-cycle natural gas in terms of levelized cost, according to a 2025 report from the research firm Lazard.
Why do data centers want ‘clean, firm power?’
Due to their size, data centers are throwing the transition to renewable energy into flux. In some regions, data centers are already “the largest single assets on the grid, as big as any single power plant,” said Tom Wilson, principal technical executive at the Electric Power Research Institute, in an email to Straight Arrow News.
Wilson said wind and solar are valuable assets for meeting data center energy needs, particularly when paired with batteries, which continue to decline in cost. At the same time, Wilson emphasized the “critical importance of clean, firm power” from sources that can provide consistent power output at all hours of the day, such as nuclear, geothermal, hydrogen or gas with carbon capture technology to stop emissions from reaching the atmosphere.
Wilson is also a proponent of data centers becoming more “flexible,” meaning they are capable of reducing their electricity draw from the grid when needed. Wilson said, “data center flexibility can make them a grid asset, increasing reliability,” which can also help manage the grid with more renewable power sources.
Will Big Tech go green?
Big Tech companies including Google, Microsoft, Amazon, Apple and Meta have all committed to powering their operations with renewable energy, or achieving net-zero emissions around 2030. However, these commitments often rely on purchasing renewable energy credits to offset electricity consumed from coal and natural gas.
Last week, Google made a deal to purchase hydroelectricity. In June, Meta arranged to buy nuclear power. Earlier this year, Microsoft announced a partnership to build solar power in 20 communities across the country. But it is unclear whether Guterres’ pleas will speed up Big Tech’s investments in wind, solar or clean, firm power sources.
Guterres’ comments are also at odds with President Donald Trump’s views. Trump recently visited an energy summit in Pennsylvania, where he touted the role coal, natural gas and nuclear power will play in providing electricity for the AI boom.
