Huge power plant eyed to power mysterious $5 billion Louisiana data center • Louisiana Illuminator

On By Littum

In rural northeastern Louisiana, known for its rice, sweet potato farms and poverty, an as-yet-unnamed company has agreed to build a new data center with an investment of at least $5 billion. The development is being called a “goodsend” and a “game changer” for the region, where one in five people live in poverty.

Next to the site, off Interstate 20 in Holly Ridge, utility Entergy plans to build a 1,500-megawatt natural gas plant to power the data center. The data center, power plant, or possibly both, will be built on a 1,400-acre site, called Franklin Farms, owned by the state, according to filings with the Louisiana Public Service Commission. Entergy would spend $3.2 billion on the plant, a related 754 megawatt gas plant to be built in southern Louisiana and transmission lines.

Over the past few months, concern has emerged that the construction of fossil-fired power plants to power the proliferation of American data centers will slow progress on the nation’s climate goals.

“Entergy proposes to add massive amounts of greenhouse gas emissions, with proposals to reduce these emissions ‘in the future’ with largely unproven technologies,” said Whit Cox, regulatory director of the Southern Renewable Energy Association, which has filed to intervene in Entergy’s request. And a consumer group in Louisiana questions whether the price of the new plants will be passed on to private customers.

GET THE MORNING HEADLINES.

Details of the data center are covered by confidentiality and non-disclosure agreements. But Entergy Louisiana has filed hundreds of pages of redacted documents with state regulators about its dealings with the unnamed company. In its filings, Entergy says the data center will employ 300 to 500 people with an average salary of $82,000. The utility calls the development a “game changer” that will bring “a historic investment” to the region.

The utility is asking the Louisiana PSC to approve construction of the new power plant — where the primary customer will be the data center — within 10 months.

‘Skyrocketing’ demand drives data centers

With the development, Louisiana will join a cohort of states building natural gas power plants to meet the pressing demand for electricity to power data centers being built by Amazon, Meta, Google and others.

Data centers are expected to account for up to 12% of all U.S. electricity demand by 2030, according to consulting firm McKinsey and Co., citing “skyrocketing computing and data demands.” Today, that amount is 3% to 4%, McKinsey said. The firm estimates the need for 50,000 MW of new electricity to power the data centers over that time frame.

“We see (gas expansion) as a huge threat — we’re at a moment where we need to phase out fossil fuels and not lock it in for decades anymore,” said Gudrun Thompson, energy program manager for the Southern Environmental Law Center. Projector earlier this year

Louisiana’s poorest may see higher energy costs from a natural gas deal

The company building the Louisiana data center appears to be aware of these concerns and is working with Entergy to offset its emissions, according to Entergy’s filings. The company wants Entergy to build or acquire 1,500 MW of solar power elsewhere to offset its emissions at Holly Ridge.

In addition, the unnamed company is expected to “make a significant contribution” to the cost of carbon capture and storage at Entergy Louisiana’s new Lake Charles 994 MW gas-fired power plant. The Holly Ridge power plant would also have the ability to use up to 30% hydrogen — which does not emit carbon when burned — as part of its fuel mix, according to Entergy.

The utility said it evaluated other alternatives to provide electricity for the data center, including wind or solar power, but concluded it would still need to build a natural gas power plant on site as backup generation because such renewable sources do not generate electricity around the clock around.

But Michelle Solomon, an analyst at the nonprofit climate think tank Energy Innovation, says Entergy’s analysis is flawed. With battery storage — an affordable solution being used elsewhere — solar or wind can easily be used, she said.

“Louisiana is far from the clean electricity mix of even one of its closest neighbors, let alone cleaner grids around the world, indicating that it can easily integrate even large amounts of new renewable resources,” she said, noting, that less than 1% of Louisiana’s energy comes from wind and solar combined.

The utility said in its filings that it has committed to the data center to explore other lower-emissions energy options, such as wind power and even nuclear power, to help the company meet its sustainability goals.

Cox, of the Southern Renewable Energy Association, said its members could provide renewable energy to the data center at a lower cost without greenhouse gas emissions. If the PSC grants Entergy’s request, it would avoid competitive bidding, shutting renewables and other energy developers out of the process — potentially increasing costs further, he said.

In an effort to reduce greenhouse gas emissions, several major technology companies are supporting efforts to develop small modular nuclear reactors. A recent report from Moody’s Ratings says small reactors face regulatory and cost barriers, but large tech companies with strong balance sheets, such as Google and Amazon, may be best positioned to push such developments forward.

Could the project drive up taxpayers’ bills?

In addition to concerns about how more gas-fired power plants will affect the world’s climate, Louisiana residents have more localized concerns.

Costs not paid by the data center, either through electric rates or separate agreements, would be spread across Entergy’s 1.1 million Louisiana customers, though the utility says the proposed agreement “largely insulates (Entergy’s) other customers from to pay for the necessary upgrades” for data center.

“We have a lot of questions regarding cost sharing, but also concerns about how much this has been accelerated,” the Alliance for Affordable Energy said in a recent newsletter.

On Nov. 20, the PSC will take up the project for the first time as it considers hiring outside consultants to help evaluate the proposal. In addition to the Southern Renewable Energy Association, the Large Energy Users Group, made up of large industrial energy users including Chevron and Dow, has filed to intervene in the case.

Bitcoin, data centers fuel energy surge and risk climate goals

Commissioner Foster Campbell, a Democrat who represents northern Louisiana, has consistently been skeptical of plans for new power plants and additional taxes on the electric bill. This time he is championing the new development in his home country.

“I’m always interested in what it’s going to cost,” he said. “But this is a different program because it delivers so much, so many jobs, good paying jobs to North Louisiana,” Campbell said. “I mean, I’d like to put it all in perspective, but I can’t help but thank God. Northeast Louisiana needs help more than any part of Louisiana. So it’s a gift from God.”

YOU MAKE OUR WORK POSSIBLE.

Floodlight is a nonprofit newsroom that investigates the powerful interests that stop climate action.