Big Tech has a growing appetite for America’s electricity and water resources
04/28/2024 // News Editors // Views

As the U.S. pushes towards federal net-zero policies aiming to transition transportation, heating, and other essentials to the electric grid, the burgeoning sector of data centers is set to massively increase electricity demands. These facilities, integral to cloud computing, are pivotal in processing and storing vast amounts of data from various online services and platforms.

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2023 report by the Federal Reserve highlights the critical role of data centers, often referred to as the “brains of the internet,” in supporting the digital infrastructure that underpins our modern economy. These industrial warehouses filled with servers not only support everyday applications such as social media and online banking but are also the backbone of major streaming services and countless other digital interactions.

However, the rapid expansion of this sector is not without its challenges. According to a report by Newmark, while data centers have been a booming segment of the real estate market, they face increasing hurdles such as land and power availability, supply chain issues, and growing resistance from local communities due to their enormous power and water needs.

The demand for resources by data centers is staggering. In 2022, data warehouses in the U.S. consumed 17 gigawatts of electricity—approximately 4% of the country’s total consumption. This figure is projected to double by 2030, according to industry experts. Eric Woodell, a veteran in managing tech infrastructure, describes data centers as “energy hogs,” particularly as they increasingly support power-intensive artificial intelligence applications.

The shift towards renewable energy sources complicates this scenario further. As the U.S. grid transitions from coal and gas to wind and solar, the intermittency of these sources poses additional risks of power shortages and blackouts, especially during peak demand periods. A case study by Quanta Technologies on the PJM electricity grid, which serves multiple Mid-Atlantic states, forecasts significant overloads due to the high power demands of new data centers.

Moreover, the transition from natural gas heating in many states, coupled with increased electrical heating demands, exacerbates the situation. This shift is particularly pronounced in regions where legislation is moving away from gas heating in new constructions, pushing a greater burden onto the electric grid.

The local impact of data centers also extends to water usage. To prevent overheating, these facilities require vast amounts of water for cooling, straining local water supplies. The issue of water usage is so critical that data centers are among the top ten industries for water consumption nationwide.

As data centers continue to proliferate, particularly in Northern Virginia’s “Data Center Alley”—a major hub that channels nearly 70% of the world’s internet traffic—the local infrastructure struggles to keep pace with the growing demand for electricity and water. This has led to increasing community resistance and calls for regulatory interventions to manage the expansion of this industry more sustainably.

With the ongoing expansion of data centers, both in the U.S. and globally, the balance between technological advancement and resource conservation remains a critical challenge. The industry’s future growth may hinge on innovative solutions that mitigate its hefty resource footprint, possibly reshaping how data infrastructure is built and managed across the world.

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