U.S. Secretary of Energy Chris Wright is a big fan of the country’s data center growth and says data centers can lower the rising cost of electricity in the nation. He is of the belief that the AI technology can actually lead to a more secure and lower-cost grid.
Speaking recently at Cato Institute in a fireside chat titled “How America Can Unleash the Next Energy Revolution,” he encouraged more development of data centers as a means of lowering the price of electricity.
His arguments were in contrast to the arguments heard across Oklahoma where cities are responding to the growth with studies, moratoriums or direct opposition.
“They’re the answer to drive down electricity prices. They’re not the problem. They’re the answer,” said Wright in discussing the electricity price issue.
As he continued explaining his support, Wright said in the past 10 years, states that haven’t added data centers such as California, New York, Massachusetts, Maryland and Delaware produce less electricity today. He said they’re “just like Germany and England” and are also the states with the fastest growth rate in electricity prices.
“And if you look at the states with the fastest demand growth, all of those states have electricity prices that have risen slower than the rate of inflation. And as new data center deals are signed, we have a rate application in Indiana to lower rates in nominal terms.”
Wright told the audience at the Cato Institute event there are “tons of deals in Florida, Georgia and Ohio” that are freezing rates in nominal terms for multiple years.
“So it’s bringing on new demand, getting some of the nonsense out of way, and bringing new capacity on. We can stop the rise of electricity prices.”
Permitting, he said, is part of the problem when it comes to improving the grid and lowering the cost of electricity. Pointing out that natural gas remains the largest industrial fuel for industrial processes and is also the “lowest in the world”, the nation does not have low cost electricity as it should.
“And we need to fix that problem. And we need to make it so it’s, and it has to be fast. You know, you want to build a factory in the United States. It’s expensive to get permits,” said Wright. “It’s slow to get a new electricity interconnection. There’s too much risk in that to get it. And so, yes, to reshore critical mineral processing and manufacturing in the United States, we need to make it easier to permit stuff and quicker to get electricity and for you to be able to get electricity at a long-term contract at a very competitive price.”
