Loss of green smelter highlights Kentucky’s need for clean electricity

She said her focus now is ensuring that Century’s last smelter in the state, Sebree, continues operating for years to come. That means pressuring state officials and legislators to usher more renewables onto the grid. ​“If we understand that Century needs clean energy to be viable in the United States, then that is a story we can tell in Kentucky,” she said. ​“The Oklahoma smelter snafu needs to be a wake-up call.”

Gov. Beshear, a Democrat, stressed the need to diversify Kentucky’s energy mix in response to Century’s Oklahoma pivot. But GOP state legislators in recent years have adopted measures — Senate Bills 4 and 349 — that are designed to prolong the life of fossil-fueled power plants and make it harder to build renewable energy projects in their place. Opponents of the rules, including investor-owned utilities and manufacturing groups, have warned that the restrictions will jeopardize grid reliability and increase energy costs.

The Kentucky Resources Council and a coalition of other nonprofit groups commissioned an independent study to examine the lawmakers’ claims that relying on fossil fuels is the only way to ensure an affordable, reliable grid. The analysis, by Current Energy Group, found that Kentucky is presently pursuing a high-cost, high-risk path by keeping uneconomic coal plants running and hamstringing efforts to pursue alternatives.

Researchers identified the ​“least-cost” strategy as one that involves building renewable energy capacity, deploying energy storage, and adding demand-side resources like energy-efficiency programs and rooftop solar to reduce pressure on the utility grid. Using these cleaner resources to replace coal-fired power could save Kentucky customers $2.6 billion by 2050, according to the report, published in December.

This approach is also considered the lowest risk, given that a costly, dirty grid threatens to push out more industries, and since it leaves utilities vulnerable should the state or country ever decide to penalize carbon-dioxide emissions, said Byron Gary, an attorney at the Kentucky Resources Council who helped spearhead the report.

He said that the analysis didn’t include Century’s new smelter when modeling the state’s future power demand. But it did assume that some of the data centers proposed for Kentucky will get built, further increasing the need for carbon-free, lower-cost electricity resources — ​“which Kentucky clearly doesn’t have right now,” Gary said.

Pro-coal policymakers have framed the AI boom as a godsend for Kentucky’s long-suffering mining industry, as the massive facilities will need lots of around-the-clock power. For now, though, the biggest winner seems to be fossil gas. Last fall, state lawmakers gave Kentucky’s largest utility approval to spend $3 billion on building 1.3 gigawatts’ worth of new gas power capacity to serve future hyperscalers.

Still, that power likely won’t be online anytime soon, given order backlogs: Just getting the turbines needed for new gas plants can take three to five years. By contrast, large-scale solar and wind projects represent the lowest-cost and fastest path to add power to the grid, experts say.

Many residents are pushing back against the megaprojects over concerns of how data centers will affect farmland and raise living costs and electricity prices. For environmentalists who were hoping for a new green smelter, or who were surprised by Hawesville’s rebirth as a server farm, the tech infrastructure is little consolation.

Lane Boldman, executive director of the Kentucky Conservation Committee, said she doesn’t think that data centers will revitalize the state’s hard-hit industrial and mining communities in the same way that the Department of Energy had initially intended when awarding Century’s $500 million smelter grant.

“What the Biden administration had been trying to do with a lot of these grants was not just to provide economic development or drive cleaner technology but also to do something to restore communities that had been working in the energy sector before, so that they’re not abandoned,” she said.

“You want to be able to bring the communities along in that transition,” she added. ​“And what they will now get instead is either nothing or a data center, and that just wasn’t the plan.”

Holbrook, for his part, said he welcomes the potential influx of data centers in Kentucky and the regions of Ohio and West Virginia that his tristate labor council represents. As he sees it, the multibillion-dollar developments could provide well-paying construction jobs for the next decade and beyond as tech companies expand their footprints.

“We’re trying to embrace it, and we want to be at the table and building these campuses,” he said. ​“You kind of have to dance with the person that brought you. So that’s how we are with this situation.”