How Big Tech Is Consuming America’s Electricity and Water

How Big Tech Is Consuming America’s Electricity and Water
Illustration by The Epoch Times, Getty Images, Shutterstock
Updated:

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

image-5631742

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.

image-5631732
image-5631736
image-5631738
(Top) The NSA's Utah data collection center has Salt Lake City in the background, in Bluffdale, Utah, on March 17, 2017. The $1.5 billion data center is thought to be the worlds largest. (Bottom L) Cables and servers in the computers room at a data center, in Saint-Ouen-l'Aumone, France, on July 9, 2021. (Bottom R) Google reported that it consumed 5.6 billion gallons of water in 2022, primarily to cool its data centers. George Frey/Getty Images, Alain Jocard/AFP via Getty Images

“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.

image-5631735
A man sits in the shade of his umbrella while dogs play in the park under high tension power lines in Redondo Beach, Calif., on Aug. 16, 2020. California has ordered rolling power outages as a heat wave strains its electrical system. Apu Gomes/AFP via Getty Images
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.
The data center network in northern Virginia expanded in 2022 to include a development called the Digital Gateway, a cluster roughly equal in size to Digital Alley, located in nearby Prince William County. This new development includes 37 buildings and 14 substations of 200,000 square feet each, Ms. Bolthouse said, and more developments are in the pipeline throughout the area.

The current and incoming data centers would increase electricity usage by more than 20 gigawatts, the PEC states in the report. Currently, the total peak demand for that area is 23 gigawatts, so northern Virginia’s data centers would almost double the local electricity demand, using about as much as 5.5 million homes.

image-5631739
Beachgoers walk near wind turbines along the coast of Pingtan in Southern China's Fujian Province on Aug. 6, 2022. Ng Han Guan/AP Photo, File

The problem for local communities is that, once a municipality approves the development, the electric utility must build new power generation and transmission lines to service that development. The cost of this new infrastructure is largely borne by the community in the form of higher electric bills for all ratepayers.

“When we pay our electric bills each month, you’re giving a huge subsidy to multibillion-dollar companies like Amazon, Google, Microsoft, and Apple,” the PEC report states.

As a result, data centers are increasingly facing local resistance when they try to build new facilities.

One group putting up resistance is the Virginia Data Center Reform Coalition, which includes about 40 organizations including home ownership associations, natural resource protection groups, historical preservation groups, and climate activists.
This organization, in which Ms. Bolthouse has a leadership role, is working to get local laws passed to slow or stop the expansion of data centers.

Searching for New Places to Build

Consequently, developers have started looking elsewhere in search of land, cheap energy, and abundant groundwater. Target locations include Atlanta, Georgia, and Columbus, Ohio. Cheyenne, Wyoming has also approved significant data center development.

Data center developers are also seeking locations abroad. The BBC reported in June of 2023 that data centers used about one-fifth of all electricity in the Republic of Ireland, the equivalent of the electricity used in all the country’s urban districts combined.

Energy consumption in Ireland by these data warehouses increased 31 percent from 2021 to 2022, and by 400 percent since 2015, the BBC stated.

There had even been consideration given at one point, before Russia invaded Ukraine, to locating data centers in frigid locations like Siberia, some of which also have an abundant supply of nuclear power, Mr. Woodell said. “But obviously that went away because of geopolitical concerns.”

Ultimately, he believes governments will step in to put limits on the industry as electric grids become increasingly unable to meet public demand, forcing countries to choose between data and essentials like heating or powering hospitals.

“I think there will end up being moratoriums,” he said. “In Europe and in the UK they’ve basically put moratoriums in place on any new data center builds because there’s just not enough power.”

And the drain on local resources goes beyond electricity, it includes water usage as well.

Data centers concentrate a significant amount of power in a small space, generating more heat than air cooling alone can mitigate. Consequently, they consume enormous amounts of groundwater to keep the servers from overheating.

image-5631734
A new Facebook data center is under construction in Eagle Mountain, Utah, on Nov. 7, 2019. The facility is a 970,000 square foot building and sits on 500 acres. George Frey/AFP via Getty Images
Google, for example, reported that it consumed 5.6 billion gallons of water in 2022, primarily to cool its data centers. This was a 20 percent increase over what it used in 2021.
image-5631748

The Fed report stated that the data center industry ranked among the 10 largest industries for water consumption in 2021.

According to Owen Williams, the chief technical officer of Subsea Cloud, a manufacturer of underwater data “pods,” when energy is input into an industrial machine, a car, or an airplane, that energy is converted into physical movement, or “work.”

“When you talk about data centers, there is absolutely no work happening in a computer,” Mr. Williams told The Epoch Times. “And when you have energy going into the machinery and there is no work happening in that machine, every bit of the energy that goes in has to come out again as heat,” he said.

“One hundred percent of the energy that you let go into a server has to be removed from the server,” Mr. Williams said. “If you let it build up, it will basically burn up, so with the increase in computer density, the demand for removing this heat has become extreme.”

Typically, he said, on top of the electricity used to power the computers, an additional 40 percent on average is required to cool them. This puts an additional strain on electric grids and consumes enormous volumes of local groundwater in the process.

Can Data Centers Thrive Under the Sea?

Companies like Microsoft, Subsea Cloud, and some Chinese competitors believe that they have found a solution: sink data centers offshore inside deep-water pods.

These companies have developed new technologies that can house data centers in coastal waters, thousands of feet below the surface.

image-5631733
Founder and CEO of Stimergy, Christophe Perron, poses in front of his company's digital boiler installed at a municipal swimming pool, which uses it's heat, in Paris on April 18, 2018. Eric Piermont/AFP via Getty Images

The normal operating temperature of a computer chip is above 70 degrees Celsius (158 degrees Fahrenheit), so that even in tropical waters “you still have a difference between the water and the chip that’s so big, it will transfer this heat away from the chips without spending any energy to do it,” Mr. Williams said.

However, where Microsoft has constructed data tanks with five-inch thick steel walls to keep deep-sea pressure from crushing the tanks, Subsea Cloud fills its tanks with a patented non-corrosive fluid, using solid-state drives that can function in a liquid environment. This serves two functions.

“Number one, it’s transferring the heat very efficiently,” Mr. Williams said. “Number two, it’s maintaining a pressure inside of the pod that is equal to the outside.” This requires the walls of the undersea pods to be only one-quarter of an inch thick.

While it took some convincing to get tech companies to consider an underwater alternative, the demand for undersea pods is “huge at the moment,” he said.

“We are very lucky to be in a spot where very large companies are talking to us—and governments, too. The fact is that it doesn’t look like the world population wants to scale back on the use of electronics and AI and all of that.”

Submersible data pods may help to reduce the land, electricity, and groundwater required to feed the growing demand from data centers, but ultimately the global data industry will still need vast amounts of power to fuel its growth, which will continue to strain power grids.

Mr. Woodell says that one day soon, the tech industry will have to either innovate dramatic new efficiencies in data processing or face practical and regulatory roadblocks to further growth.

AD