Will Artificial Intelligence Save Coal and Gas Power Plants? Tech Giants in Action

• European energy companies are looking for solutions for the future of old coal and gas power plants slated for closure.
• One solution appears to be to hand over the infrastructure to technology companies, which would take advantage of existing connections and water resources needed to cool data centers.
• Europe is launching an industrial counteroffensive. Green, digital, and above all, competitive industry is the new priority. What role will Poland play in this? Discussions on this topic, among other things, will take place in October at the New Industry Forum .

As reported by Reuters, companies such as France's Engie, Germany's RWE and Italy's Enel are looking to capitalize on the AI-driven surge in electricity demand by converting old power plants into data centers and signing lucrative, long-term energy supply contracts with operators.

The data center option offers utilities a way to offset the high costs of closing aging power plants, as well as potentially finance future investments in renewable energy sources.

Tech companies see these facilities as a quick way to secure power grid connections and water cooling systems, two major bottlenecks in the AI industry.

“You have all the pieces that come together, like water infrastructure and heat recovery ,” said Bobby Hollis, vice president of energy at Microsoft.

Lindsay McQuade, Amazon's EMEA energy director, said she expects faster data center development in legacy locations where much of the infrastructure already existed.

Utilities can either lease land or build and operate the centers themselves, signing long-term energy contracts with technology companies, McQuade said.

"These deals offer much more than just the sale of unused land, as they encompass opportunities for stable, high-margin revenue," said Simon Stanton, director of global partnerships and transactions at RWE. "It's more about a long-term relationship, a business relationship that builds over time, which helps mitigate risk and insure infrastructure investments," he added.

Americans are investing billions in energy for emerging technology.

In July, U.S. President Donald Trump announced a $70 billion investment in artificial intelligence and the energy sector that supports it . The investments by a range of companies will include new data centers, expanded generation capacity, and modernized network infrastructure, as well as AI training programs and internships.

Also in July , Google agreed to secure 3 GW of hydropower in the US as part of the world's largest corporate clean energy pact. The capacity is intended to support large tech companies' efforts to expand energy-intensive data centers.

In June , Meta signed a 20-year contract to supply electricity from Constellation Energy's Clinton nuclear power plant in Illinois . The supplier will invest in increasing production capacity, which may involve building a new reactor. This is intended to satisfy the energy needs of artificial intelligence development.

Closing old, high-emission units costs money

Most of the 153 coal-fired and lignite-fired power stations in the EU and UK are scheduled to close by 2038 to meet climate targets. They will join 190 plants that have already closed since 2005.

Data center contracts can be attractive to energy companies, which can negotiate long-term energy supply contracts to secure future investments in renewable energy sources.

“Tech companies are paying premiums of up to €20 per megawatt-hour for low-carbon energy,” said Gregory LeBourg, director of environmental programs at French data center operator OVH.

Data center energy demand can range from several hundred megawatts to a gigawatt or more. Therefore, the annual "green premium" —the additional price paid for low-emission electricity—over the base market price could potentially translate into a long-term contract worth hundreds of millions, or even billions, of euros.

One long-term option is also to build an "energy park" and connect the data center to a new renewable energy project, relying on the grid in emergency situations.

France's Engie wants to double its installed renewable energy capacity by 2030 from the current 46 GW.

The group has identified 40 sites around the world that it is selling to data center developers, including coal- and gas-fired power plants that could be converted, said Sebastien Arbola, head of the company's data center division.

One of them is the Hazelwood coal-fired power station in Australia, which closed in 2017. Arbola declined to disclose details about the other sites, saying they are mostly in Europe.

Other state-owned companies, including Portugal's EDP, France's EDF and Italy's Enel, told Reuters they were also selling old gas and coal sites to build new data centers .

"It's a diversification of the business model," said Michael Kruse, managing partner at consulting firm Arthur D. Little. "These companies are creating new types of business and new revenue streams," he added.

Using existing infrastructure will accelerate investments by several years

Delays in connecting to the grid in Europe could last a decade, while rebuilt power plants potentially offer faster access to electricity and water.

According to data from Synergy Research Group, the computing power of data centers in Europe is significantly lower than in the United States and Asia due to longer network connection times and slower permitting.

Data center operators can choose to purchase the renewable energy they need directly from energy companies through long-term contracts or on the energy market.

Real estate firm JLL is working on several transformations, including a 2.5 GW data center in a former German coal-fired power station and four sites in the UK for a major technology client. British company Drax is also seeking a partner to develop unused parts of a former coal mine in Yorkshire, now partially converted to biomass combustion.

EDF has also selected developers for two gas-fired power plant sites in central and eastern France.

“Technology companies are willing to pay more for projects that can launch sooner as they fight for market share in a fast-growing industry,” said Sam Huntington, research director at S&P Global Commodity Insights.

Will a similar future await Polish coal-fired and gas-fired power plants? We will discuss the position of Polish industry in this global puzzle during the New Industry Forum , which will take place on October 14-15, 2025, at the International Congress Center in Katowice.