How Big Tech Is Consuming America's Electricity And Water

Authored by Kevin Stocklin via The Epoch Times (emphasis ours),

As federal net-zero policies attempt to shift transportation, heating, and other essentials onto the electric grid, one of the hottest growth sectors of America’s economy is poised to increase electricity demand exponentially, further straining an energy infrastructure that is being pushed into the red.

Data centers, the so-called “brains of the internet,” are industrial warehouses packed with rows upon rows of servers. They process, communicate, and store the data behind everything from bank records, online retailers, and social media platforms to Netflix shows and your personal iPhone videos.

“Data centers are essential to cloud computing and its ability to give users remote access to data,” a 2023 Federal Reserve report states, quoting a Science article that calls them the “information backbone of an increasingly digitalized world.”

Many analysts laud data centers as one of the fastest-growing sectors of the real estate market, but the industry may soon find itself hitting a wall as local communities put up increasing resistance to the industry’s seemingly insatiable appetite for power and water.

“While other commercial real estate sectors are experiencing a decline in construction pipelines, data center development has reached an all-time high,” according to a January report by Newmark, a commercial real estate advisory.

“However, growth is increasingly constrained by land and power availability, supply chain challenges and construction delays, not to mention increasing resistance from some local jurisdictions.”

The report said the rapid growth of artificial intelligence (AI) and other technologies is fueling the demand.

The industry is led by cloud computing behemoths like Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and Meta. It also includes digital landlords, called co-location companies, which rent storage space out to third parties. These include Equinix, Digital Realty, and CyrusOne.

Electricity Demand From Data to Double by 2030

Data warehouses consumed 17 gigawatts of electricity in 2022, or about 4 percent of total U.S. consumption. This is projected to double to 35 gigawatts by 2030.

Eric Woodell, who holds a doctorate of science in information systems and communications and is the founder of Amerruss, a tech infrastructure management company, referred to data centers as “energy hogs.”

“But now your data center for AI applications is no longer a hog, it’s an elephant and it’s living in your backyard,” he told The Epoch Times.

Mr. Woodell has been managing data centers for 25 years, formerly for Vanguard, the world’s second-largest asset manager.

A mere 10-foot-square space within the average data center consumes about 10 times as much electricity as the average home, he said.

“While conventional data centers are already pulling an enormous amount of power, AI computing doesn’t use CPUs [central processing units], but GPU-based systems instead, as the GPUs [graphics processing units] are tailored to better handle complex mathematical functions,” he said. “But there’s a catch: they draw between five and 10 times more power than similarly equipped CPU systems.”

This hefty increase in electricity demand strains a grid that is already predicted to feature power shortages and routine rolling blackouts in the coming years. This is due to more demands being placed on the grid at a time when utilities are aggressively shutting down coal and gas plants in their transition to wind and solar energy.

According to a February case study of one large regional electric utility, PJM, by Quanta Technologies, the next several years will feature “equipment overloads that trigger as much as 6,826 MW of load shedding during average winter peak demand.”

Load shedding means cutting power to consumers, also known as blackouts, to prevent a system collapse.

PJM serves a dozen eastern Mid-Atlantic states as a wholesale provider.

“The analysis reveals the expected overload of 30 bulk transmission facilities (230 kV and higher) in the 2028 summer due primarily to high load growth associated mostly with new data centers,” the report states.

Curiously, given that the transition to renewable energy is ostensibly to fight rising temperatures, the Quanta report finds that “electric demand is peaking less in summer and more in winter.” This is particularly worrisome as states on the West Coast and in the northeast, representing nearly one-third of natural gas consumers across the United States, are banning gas heating in new homes, forcing those households to rely on electricity for essential heating.

PJM forecasts new data center load growth of 7,500 MW by 2028, while deactivating 11,100 MW of fossil fuel production, leaving an 18.6 Gigawatt gap between new demand and remaining supply in this sector, according to Mr. Woodell.

“18.6 Gigawatts would power roughly 3 million homes or New York City three times over,” he stated. “The ramifications are massive.”

Data Center Alley

Globally, data centers consume about 3 percent of the world’s electricity, according to Ryan Yonk, an economist at the American Institute for Economic Research. This consumption tends to be steady and predictable, and utilities can expand to accommodate it, he said.

However, problems arise when centers become concentrated in a single area, especially if that area is transitioning away from fossil fuels.

“For individual communities, there are some real questions about data centers going in, particularly if they’re going to be clustered, and they often are,” Mr. Yonk told The Epoch Times.

“Data centers end up having consistent power requirements, which means that the grid can be pretty well expanded so long as production capacity is high enough,” he said. “But as we transition more to renewables ... the greater the baseline demand, the more problematic it can be.”

The region covered by PJM and the Quanta study is significant because it includes the world’s largest data hub, where about half of all U.S. data centers are located and through which an estimated 70 percent of the world’s internet traffic passes.

For anyone who conducts a Google search or makes an Amazon purchase, that transaction will likely be processed in what is known as Data Center Alley, home to about 150 data warehouses in Loudoun County, northern Virginia.

Data Center Alley had its beginnings in the 1980s when America Online (AOL) located its headquarters there. It quickly drew in others due to its proximity to Washington, its construction of the “world’s densest” fiber optic network, a supply of relatively cheap electricity, and local tax incentives.

“This is the area where you want to locate to connect up to everything else,” Julie Bolthouse, director of land use at the Piedmont Environmental Council (PEC), told The Epoch Times.

“Everybody is building off of each other in these data centers; you have to think about it as one giant network that is all communicating with each other,” she said.

“What’s happened from the ‘90s to now is that we’ve supersized them. We’ve gone from a small building that was part of a larger business campus and was only five megawatts, to these hyper-scale warehouse-type buildings that are now 200,000 square feet, and they’re using up to 90 megawatts per building.”

For scale, 90 megawatts is about the electricity consumption of 22,000 homes, according to a PEC report.

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