CHICAGO: Surging electricity demand from artificial intelligence (AI) data centres is forcing the United States to rely increasingly on ageing, polluting “peaker” power plants, reversing years of progress toward retiring fossil-fuel-based generation.
In Chicago’s Pilsen neighbourhood, the oil-fired Fisk power plant — once slated for retirement in 2026 — will now continue operating after power prices soared in the PJM Interconnection, the country’s largest electricity market. Demand from data centres has outpaced available supply, making rarely used peaker plants suddenly profitable.
“We believe there’s an economic case to keep them around,” said Matt Pistner, senior vice president of generation at NRG Energy, which owns the Fisk plant.
Peaker plants are designed to operate only during periods of peak demand to prevent blackouts, but they are typically older, less efficient and more polluting than baseload power stations. According to a Reuters analysis, around 60 per cent of oil, gas and coal plants scheduled for retirement in the PJM region have delayed or cancelled shutdowns this year, with most being peaker units.
While peakers generate only about 3 per cent of US electricity, they account for nearly 19 per cent of total installed capacity, according to the Government Accountability Office (GAO). Their extended operation raises environmental justice concerns, as many are located in low-income and minority communities.
Environmental advocates warn that peakers often lack modern pollution controls and emit higher levels of sulfur dioxide and particulate matter. A UCLA study found that residents of historically “redlined” communities were 53 per cent more likely to live near peaker plants than those in non-redlined areas.
Power prices in PJM have surged by more than 800 per cent this summer during peak periods, encouraging utilities to keep ageing plants online. Grid operators argue this is necessary to maintain reliability as data centres, electrification of transport and extreme weather strain the system.
Energy experts say alternatives exist, including expanded transmission networks and large-scale battery storage, but these solutions require time and investment. Until then, communities like Pilsen fear a renewed legacy of pollution.
“We need every single megawatt of energy we can get right now,” said a PJM spokesperson, adding that retiring existing plants without sufficient replacement capacity “ignores reality.”
By Reuters
