Can data centers stay green? Balancing digital growth with clean energy

The world is increasingly becoming digital and the demand for data is skyrocketing. The surge in demand is being met by data centers, which are basically large facilities that store, process and manage data that powers everything such as cloud computing, artificial intelligence (AI) and cryptocurrency mining. However, the data centers are becoming a major source of concern due to massive energy consumption and environmental impact. The energy use of data centers in the U.S. is projected to be one of the fastest-growing sources of electricity demand over the next decade.

The rise in energy demand from data centers is already affecting the progress of America toward a cleaner energy future. It is delaying closure of fossil fuel power plants and even reviving proposals for new fossil fuel plants as electricity consumption is growing.

Rise in Energy Demand

The electricity demand from data centers is growing at a rapid pace and is expected to further rise in the coming years. Electric Power Research Institute (EPRI) report project that data center electricity demand could increase by as little as 29% or as much as 166% by 2030. The uncertainty makes it difficult for policymakers and utilities to plan effectively.

The growing demand for electricity is largely driven by the increase in power required for energy-intensive activities like AI and cryptocurrency mining. AI algorithms require significant computing power and the energy requirements will increase as AI technologies advance. Cryptocurrency mining is another major contributor. Bitcoin mining alone consumed over 121 Terawatt hours (TWh) of electricity in 2023. Such high levels of energy consumption are not sustainable and especially as the country moves towards cleaner energy goals.

Impact on Clean Energy Transition

The high demand for electricity from data centers is delaying transition of America to cleaner energy. The closure of fossil fuel plants has been postponed or put at risk in several cases. 17 fossil fuel units at seven power plants representing 9,100 megawatts (MW) of capacity are facing delays due to rising electricity demand.

Utilities are also using the growing demand for computing power as justification to invest in new fossil fuel plants. At least 10,808 MW of new fossil fuel generation capacity is planned to meet the projected demand from data centers. The investments could lock the country into decades of dependence on fossil fuels.

Unnecessary Energy Use

Not all of the energy demand from data centers is necessary. Some computing practices such as cryptocurrency mining are highly energy-intensive and could be deemed wasteful. The energy consumption involved in mining cryptocurrencies has raised alarms about the environmental impact of such activities.

Other cryptocurrencies use similar processes that demand significant amounts of electricity. Cryptocurrencies have their place in the digital economy and the energy costs associated with them are unsustainable.

Environmental and Community Impact

Data centers consume electricity and they also have significant environmental as well as community impacts. Data centers require water for cooling and some use millions of gallons of water daily just to keep their servers running at optimal temperatures. One large data center can consume as much as 5 million gallons of water per day.

Data centers are known for creating significant noise pollution. Reports from communities near mining operations reveal that the noise levels can reach as high as 91 decibels. The constant noise can lead to health problems for nearby residents.

The cost of maintaining and expanding the energy grid to meet the growing demand from data centers could lead to higher utility prices for consumers. Regulators are already warning that utility rates could rise by as much as 20% in 2025. This would disproportionately affect taxpayers and utility customers.

Smart Policy Solutions

The rising electricity demand from data centers presents serious challenges. Smart policy decisions can help in mitigating the impact of the growth and simultaneously ensure that data centers contribute to the transition to clean energy.

Policymakers must require data centers to operate more efficiently. Data centers should be required to power their operations with virtually all renewable energy.

Governments should encourage transparency and accountability in the operation of data centers. Local and state governments should mandate that data centers report their energy and water usage. This will help communities understand the environmental impact of data centers and ensure that these facilities are not exploiting local resources without due consideration for the public good.