As the digital age accelerates, Indiana finds itself at the center of a new kind of gold rush: a rush to locate data centers, microchip manufacturing plants, and power supplies.
These modern mines do not mine ore. They process and store the data and microchips that are the lifeblood of the 21st century. And just like the gold rushes of old, this boom is literally changing the game economically.
The AI ​​revolution, born from advances in machine learning and data processing, has led to a surge in demand for data centers. Amazon recently announced that it will invest $150 billion in new data centers over the next 15 years.
Indiana has emerged as a prime location for these technology hubs due to its size, central location, and business-friendly policies. However, this rapid growth has created an insatiable hunger for a vital resource: electricity.
Data centers are notorious for their high energy consumption. Large amounts of power are required to keep servers running and maintain the controlled environment necessary to protect sensitive equipment from overheating.
Indiana's data center industry is growing rapidly, but this expansion is already limiting the amount of electricity the state produces, causing an increase in electricity demand. Experts warn that Indiana is phasing out fossil fuels too quickly to keep up with rising energy demand from both the commercial and consumer sectors.
find balance
This poses a challenge for the Hoosier State. The economic benefits of hosting data centers are clear. It's about creating jobs, investing in our communities, and strengthening our state's reputation as a tech-friendly haven.
But Indiana's most abundant and reliable source of power, which powers these projects, is facing unprecedented early retirement. With 12 coal-fired power plants scheduled to close by 2028, Indiana leads the nation in projected retirements for baseload electricity: reliable and available coal.
Early retirement will exacerbate rising electricity costs, as many planned retirement benefits have not yet been paid in full by ratepayers. Coal-fired power generation can fill the gap that intermittent energy sources such as solar and wind cannot provide when weather conditions are not favorable.
This retreat from Indiana's reliable, clean coal has caused electricity prices to rise and puts Indiana in the precarious position of regularly purchasing energy at volatile market prices. Indiana boasted her fifth-lowest electricity rates in the nation, but fell to 32nd in the middle.
The impact of this decline is felt most acutely by residents who are facing higher utility costs. This year alone, Duke Energy has asked for his 16% increase in customers' electric rates, CenterPoint Energy has asked for his 16.5% increase and AES has asked for his 14% increase.
This leaves Indiana at a crossroads. Countries must strike a balance between promoting technological progress and maintaining reliable and affordable energy practices. This is not just a matter of preference, but a vital necessity to secure the future of our economy and the well-being of our people.
Without clean coal, the state's baseload power source, we risk losing potential economic opportunities while continuing to see higher consumer electricity rates and potential power outages.
In the modern gold rush, Indiana's economic aspirations depend on a reliable and affordable supply of electricity. High-demand industries such as microchip manufacturing and data centers require unprecedented energy reserves.
To secure this type of industry and the high-wage jobs it brings, Indiana will deploy current and future economic projects to ensure affordable and reliable power for Hoosier consumers. A moratorium on the retirement of fossil fuel vehicles should be considered until an adequate supply of possible baseload electricity is established.
john ford President of Reliable Energy, Inc. This is an industry association founded in 2020 by representatives of Alliance Coal and Hallador Energy.