The rapid growth of data centers in the United States has led to a significant increase in energy consumption, posing a challenge to the country’s clean energy transition. As data centers continue to expand, driven by energy-intensive activities such as artificial intelligence (AI) and cryptocurrency mining, policymakers must take action to mitigate the potential negative impacts on the environment and society. Without intervention, the surging demand for electricity by data centers could hinder efforts to move away from fossil fuels and toward more sustainable energy sources.
The Growing Energy Demand of Data Centers
Data centers are expected to be a major source of increased electricity demand over the next decade, second only to the electrification of transportation. This surge in demand is partly due to the rise of AI and cryptocurrency mining, both of which require enormous amounts of computing power and, consequently, electricity. This increasing demand complicates efforts to transition to a cleaner energy system by causing delays in the retirement of fossil fuel power plants and leading to proposals to resurrect retired fossil fuel and nuclear power plants.
Despite the looming increase in energy consumption, a dramatic surge in electricity demand from U.S. data centers is not inevitable. Policymakers have the power to improve data center efficiency and transparency and ensure these centers are powered by clean energy. However, forecasts of future electricity demand from data centers vary widely and are highly uncertain, ranging from a growth of as little as 29% to as much as 166% by 2030, according to a report by the Electric Power Research Institute (EPRI). This uncertainty underscores the necessity of implementing smart policies to manage and mitigate the potential impacts.
Delays in Clean Energy Transition
One of the main concerns is that rising computing demand is delaying America’s transition to clean energy. The high demand for electricity from data centers is delaying the planned closures of fossil fuel power plants. At least 17 fossil fuel generating units at seven power plants, totaling 9,100 megawatts (MW) of capacity, have been delayed or are at risk of being delayed due to concerns about rising electricity demand, with data centers being a key concern in many cases. Additionally, utilities are using concerns about computing energy demand to propose investments in new fossil fuel power plants.
At least 10,808 MW of new fossil-fuel generation is being planned to meet projected demand, including, in many cases, from data centers. This trend further complicates efforts to transition to a clean energy system, as investments in new fossil fuel power plants may delay the adoption of clean, renewable energy sources. The high energy demand from data centers effectively ties the country’s energy infrastructure to fossil fuels, decelerating the shift toward a more sustainable and environmentally friendly energy portfolio.
The Impact of Energy-Intensive Computing Practices
Much of the increased demand for energy from data centers is attributable to new energy-intensive computing practices such as AI and cryptocurrency mining. Some of this demand may be unnecessary, as evidenced by the example of Bitcoin. Bitcoin, one of the most popular cryptocurrencies, is mined by using computing power to solve cryptographic puzzles. In 2023, Bitcoin consumed 121.13 Terawatt hours (TWh) of electricity, which is more than the entire state of Michigan produced that year. The exorbitant energy consumption by these practices underscores the need for smart policies that curtail wasteful activities.
Beyond energy consumption, data centers have other negative impacts on communities. They consume millions of gallons of water every day for cooling and electricity generation, create noise pollution, and could increase prices for utility customers. For instance, just one data center can consume as much as 5 million gallons of water daily. Residents living near cryptocurrency mines have reported noise as high as 91 decibels, which is nearly as loud as a chainsaw, with exposure to such noise potentially causing health problems. These negative impacts highlight the urgency for policymakers to adopt measures that mitigate the detrimental effects of data centers on local communities.
The Role of Smart Policies
To prevent further delays in the transition to clean energy, adopting smart policies is crucial. Rising electricity demand from computing is not inevitable. By requiring data centers to be more efficient, powering them with renewable energy, and avoiding unnecessary and wasteful computing practices, the impacts can be reduced. Governments should mandate data centers to power operations with virtually all renewable energy, as investments in new fossil fuel power plants may delay the shift to clean, renewable energy sources. This emphasis on renewable energy could significantly reduce the environmental footprint of data centers.
Public utility commissions should take steps to reduce the impacts of data center energy use, such as implementing demand-response programs and directing utilities to avoid investments in new fossil fuel infrastructure to meet new demand. Additionally, local and state governments should require data centers to report on energy and water use and meet comprehensive energy efficiency standards. Such transparency measures will help communities understand when permits are applied for and approved, who is leasing the land, and what their plans are, ensuring better informed and more equitable decision-making processes.
Protecting Ratepayers and Communities
The rapid growth of data centers in the United States has led to a substantial increase in energy consumption, posing a significant challenge to the country’s transition to clean energy. These data centers, which are expanding due to energy-intensive activities like artificial intelligence (AI) and cryptocurrency mining, require policymakers to take proactive measures to address the potential environmental and societal impacts. If left unchecked, the rising demand for electricity by data centers could impede efforts to reduce reliance on fossil fuels and shift towards more sustainable energy sources. Addressing this issue is crucial to ensuring that the United States can achieve its clean energy goals while managing the environmental repercussions of data center expansion. Policymakers must prioritize strategies that promote energy efficiency and the integration of renewable energy sources in data center operations. Failure to do so could result in increased greenhouse gas emissions and a continued dependence on non-renewable energy, undermining efforts to combat climate change and advance sustainability initiatives.
