This story was originally published by Canary Media. When I first met John Holbrook at his office in Northeastern Kentucky, the region seemed to be on the cusp of a revival. It was a scorching summer day in 2024, and Century Aluminum was considering building an enormous smelter in this corner of Ap palachia — one that would create thousands of jobs in an area where employment was steadily drying up. Holbrook, who heads the Tri-State Building and Construction Trades Council, called the $5 billion project a ​“life-changing” opportunity. He’d joined a coalition of labor organizers, environmentalists, and local officials who supported Kentucky Gov. Andy Beshear’s attempt to hammer out an agreement to supply Century’s new smelter with clean electricity. Two weeks ago, Century finally announced its plans. The Chicago-based manufacturer said it will build an aluminum plant in Oklahoma instead, in partnership with Emirates Global Aluminium. The jointly developed facility will be America’s first new smelter since 1980 — and the largest in the country — if completed as planned by the end of the decade. “It’s very disappointing for the Kentucky craftspeople that I represent,” Holbrook said recently on a video call from his office in Ashland, which was blanketed in ice from a major winter storm. ​“It’s tough,” he added. ​“But we are resilient people.” The news of Century’s decision had barely sunk in for Kentuckians when the company made another surprising announcement. Last week, Century said it had sold its idled Hawesville smelter in Western Kentucky to a data center company, squashing any possibility that the aluminum plant would be restarted. The developer, TeraWulf, will now have access to the site’s 480 megawatts of existing grid capacity for bitcoin mining and high-performance computing — tasks that are less sensitive to power prices than smelting aluminum. When Century shut down production in Hawesville in 2022, cutting more than 600 jobs, the company pointed to ​“skyrocketing energy costs” as the primary reason. Energy has always been the Achilles’ heel of smelters. The facilities consume tremendous amounts of electricity to transform raw materials into a versatile metal that’s used in cars, planes, power cables, solar panels, and beverage cans. Producers must secure long-term contracts with utilities for affordable, reliable power in order to compete in global markets. But those deals are hard to come by, and smelters that rely on fossil fuel–heavy grids are particularly vulnerable to spikes in coal and gas prices. ‘You have to take a 30-to-50-year horizon’ For its new smelter, Century had been scouting locations where it could access not only competitive rates but also ample supplies of carbon-free electricity. In 2024, the company was awarded up to $500 million from the Biden administration’s Department of Energy to build a ​“modern, low-emission” facility as part of a broader federal effort to demonstrate cleaner manufacturing technologies for domestic industries. It’s unclear whether the terms of Century’s grant have changed under the Trump administration, which is propping up aging coal plants as it works to block renewable-energy projects. But Century recently pointed to Oklahoma’s abundant wind generation and solar power potential in explaining its decision to partner with Emirates Global Aluminium on a smelter near Tulsa. “Oklahoma is very well located, from a total energy perspective,” Matt Aboud, Century’s senior vice president of strategy and business development, said during a Feb. 2 panel at the SP Global Aluminum Symposium in Miami. “Yes, this administration is very much promoting fossil fuels and very much de-emphasizing renewables. But you have to take a 30-to-50-year horizon,” he said. ​“Ultimately, to really operate a smelter here [in the U.S.], you need an energy strategy that incorporates all the different fuel mixes.” Aboud didn’t mention Kentucky. But for clean energy advocates, the decision to build in Oklahoma and not the Bluegrass State felt like an indictment of Kentucky’s power system. Coal-fired power plants supplied 67% of the state’s electricity generation in 2024, and gas plants generated another 26%.  Hydroelectric dams provided most of the rest, though dozens of solar projects are in development, including ones atop old mining sites. “Kentucky needs to learn from this and understand that our infrastructure, too, is an economic development tool,” said Elisa Owen, a Louisville-based senior energy organizer with the Sierra Club’s Beyond Coal Campaign. ​“We cannot remain invested in 19th-century energy if we want to attract 21st-century business. It’s just as simple as that.” 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. Data centers better than nothing? 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 data centers over concerns of how the megaprojects 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.” The post Loss of green smelter highlights Kentucky’s need for clean electricity appeared first on The Lexington Times. ...read more read less