How much energy will new semiconductor factories burn through in the US?

A new report warns that a boom in computer chip production in the US could fuel demand for dirty energy, despite companies’ environmental claims. Surprisingly, the solution for manufacturers could be to act more like other big tech companies pursuing climate goals.

New semiconductor factories being built in the US by four of the largest manufacturers – Intel, TSMC, Samsung and Micron – could use more than twice as much electricity as the city of Seattle once they are up and running. These companies claim they run on renewable energy, but according to an analysis by nonprofit organization Stand.earth, that’s not entirely true.

Semiconductors make up a large part of a device’s carbon footprint. And unless companies turn to clean energy, they could drive up greenhouse gas emissions if domestic chip manufacturing makes a comeback.

Semiconductors make up a large part of a device’s carbon footprint

The CHIPS and Science Act, passed in 2022, set aside $52.7 billion in funding for domestic chip manufacturing. Now the four companies examined in the report have plans to build mega-factories in Arizona, Ohio, Oregon, Idaho, Texas and New York. According to the report, each of these mega-factories alone could consume as much electricity as a medium-sized city. Cumulatively, nine facilities could ultimately add 2.1 gigawatts of new electricity demand.

“We are not delaying any of our sustainability commitments, even with our recently announced investments,” Intel said in an email. TSMC, Samsung and Micron did not immediately respond The edge‘s request for comment. To be fair, all four companies have made commitments to achieve 100 percent renewable electricity for their US operations – but the devil is in the details.

A major culprit is a popular tactic for a variety of companies making clean energy commitments today: the purchase of unbundled renewable energy certificates (RECs). Please bear with me as I explain how companies can claim they run on renewable energy when in reality they do not.

For starters, there isn’t currently enough renewable energy being generated in the U.S. to power the operations of all these companies. Renewables still make up only about 20 percent of the U.S. electricity mix. And when a solar or wind farm supplies electrons to the grid, it all gets mixed up with electricity from fossil fuel power plants. When a new factory is connected to the electricity grid, it is actually impossible to say where the electricity it uses comes from.

RECs are a flawed attempt to solve these problems. An energy company can essentially sell two products from renewable energy generation: the actual electricity, and a REC that represents a claim to the benefits of the renewable energy produced. In an ideal world, the REC should generate additional income to support the development of new sustainable projects. And a company that matches its electricity consumption with an equal number of RECs can ostensibly write in its marketing and sustainability reports that its operations are 100 percent renewable.

RECs are a flawed attempt to solve these problems

Are you starting to see the disconnect? A growing body of evidence shows that RECs have not been as effective at cleaning up power grids as some companies would hope. The popularity of RECs has made them so cheap that they don’t necessarily incentivize new clean energy projects. A 2022 survey of 115 companies that purchased RECs found that they grossly overestimated the reduction in greenhouse gas emissions from electricity use.

To minimize damage to the environment, semiconductor manufacturers should follow the lead of Apple, Google and Meta, the report said. Rather than buying RECs that renewable energy producers sell as separate products, technology companies can have a bigger impact by entering into a Power Purchase Agreement (PPA). It is a long-term agreement to pay for a certain amount of electricity from a certain renewable energy project.

PPAs have been more successful in actually getting new renewable energy projects online. Google and Meta have taken PPAs one step further and have pledged to match their electricity use with local clean energy generation 24/7.

Apple’s pledge to push its suppliers to use clean energy could influence semiconductor makers. The Stand.earth report cites a sustainability report from Apple showing that semiconductors are responsible for nearly half of the greenhouse gas emissions from making its devices. The race to develop more powerful computer chips for AI only raises the stakes.

“Consumers are tired of huge tech companies making ambitious climate promises and then dragging their feet when it comes to delivering on those promises,” Gary Cook, director of climate policy at Stand.earth, said in a press release. “The rapid scale-up of domestic semiconductor manufacturing brought about by the US$53 billion CHIPS Act provides a unique opportunity to transition a critical part of the IT sector’s supply chain to factories that run on renewable energy.”

Leave a Reply

Your email address will not be published. Required fields are marked *