In Chicago’s Pilsen neighborhood, the aging Fisk power plant, owned by NRG Energy, was set to retire next year. However, rising electricity demands from data centers, especially fueled by artificial intelligence, have made older power plants like Fisk profitable again. NRG decided to postpone Fisk’s retirement due to this demand.
Fisk is categorized as a “peaker” plant, which is typically only used during times of high electricity demand to prevent blackouts. These plants are older and often generate more pollution and cost more to operate than standard power plants. An analysis revealed that around 60% of oil, gas, and coal plants scheduled for retirement in the PJM power grid have postponed or canceled those plans, with most being peaker units.
The Fisk peakers operate on land once occupied by a coal-fired power plant that closed over a decade ago due to community opposition. Although the coal plant’s shutdown reduced pollution, the peaker units still emit sulfur dioxide and other pollutants when they operate. Community advocates express concern about the health impacts of these emissions, especially given the plant’s proximity to residential areas.
Peaker plants are typically designed for quick operation rather than efficiency and often lack modern pollution controls. Some have lower smokestacks, which can contribute to localized pollution problems. The Trump administration’s push to maximize existing power sources may lead to longer operation hours for these plants, potentially increasing air pollution in neighborhoods already facing environmental challenges.
Peaker plants account for approximately 3% of the nation’s energy output but could produce up to 19% of the total energy if utilized fully. However, this could result in higher emissions, affecting low-income communities of color disproportionately. Research shows that communities historically denied financial resources, known as “redlined” areas, are more likely to have peaker plants nearby. This connection highlights environmental justice issues, as these vulnerable populations may suffer more from additional pollution as peaker plants continue to operate.
Power demands straining the grid
Most of the peaker plants in the U. S. were built during two major energy consumption periods: the mid-20th century with the rise of household electrical appliances and around the year 2000 when the economy expanded and computers became popular. Following these periods, as energy efficiency improved, the demand for power decreased, leading to the closure of many fossil-fuel power plants. At the same time, solar and wind energy began to contribute more to the energy supply, producing electricity only when conditions were favorable. Frank Rusco from the Government Accountability Office noted that the increased reliance on peaker plants results from the older systems working harder.
A recent study indicated that natural gas peaker plants emit significantly more sulfur dioxide than non-peaker plants. The PJM Interconnection, which includes the nation’s largest electrical grid, is facing challenges due to the high demand from data centers, particularly those supporting AI, which are depleting the grid’s power reserves and increasing costs. The prices charged to power suppliers in PJM rose dramatically over 800% this summer compared to last year, making peaker plants more profitable.
PJM spokesman Jeff Shields stated that electricity demand is greater than the supply, prompting a response from generators. They cannot afford to lose existing capacity while trying to meet the growing needs driven by data centers and other consumers. An analysis revealed that about 23 power plants in the PJM area were expected to retire starting in 2025, but since January, 13 of those retirements have been postponed, including 11 peaker plants. For instance, the Eddystone plant was ordered to keep running by the Department of Energy.
NRG Energy, which owns the Fisk peaker plant, emphasizes that peakers are vital for grid reliability, especially during emergencies like severe weather conditions. The Fisk site allows Chicago to maintain power supply during such events. NRG asserts that while they utilize various energy sources, oil-fired peakers provide essential backup with local fuel storage.
Experts suggest alternatives to relying on peakers, such as improving transmission lines to move excess electricity to areas lacking supply. Clean energy advocates also mention that advancements in battery technology could replace the need for many peaker plants. However, as demand for power from AI increases, communities like Pilsen, which have historically fought against pollution, may face challenges in opposing peaker plants.
John Quigley from the University of Pennsylvania pointed out that keeping these plants in operation leads to higher electricity costs and local pollution. PJM officials intend to continue integrating renewable energy into the grid irrespective of peaker plant operations, stating that every available megawatt is necessary for current needs. Northern Illinois is emerging as a data center hub, which raises concerns about the environmental impacts of peaker units, contributing to existing pollution problems in affected neighborhoods.
With information from Reuters
