The Surging Power Demands of Artificial Intelligence and Cloud Computing
As the world becomes increasingly reliant on artificial intelligence and cloud computing, the power needs of data centers are skyrocketing. These facilities, which house the servers that power our daily applications, are growing so large that finding enough power to drive them and suitable land to house them is becoming a significant challenge.
A Race to Global Dominance
Technology companies are engaged in a “race of a lifetime to global dominance” in artificial intelligence, according to Ali Fenn, president of Lancium, a company that secures land and power for data centers in Texas. This race is driven by the immense profitability of deploying capital in AI, with companies willing to spend heavily to stay ahead of the curve.
The Electricity Consumption Conundrum
The electricity consumption of data centers has exploded in recent years, with individual campuses soon expected to use more power than some cities, and even entire U.S. states. These facilities could demand a gigawatt or more of power, equivalent to about twice the residential electricity consumption of the Pittsburgh area last year.
Renewable Energy Alone Won’t Suffice
While renewable energy is a crucial component of the solution, it won’t be sufficient to meet the power needs of data centers. Natural gas will have to play a role, which will slow progress toward meeting carbon dioxide emissions targets.
The Land and Power Crunch
As land and power grow more limited, data centers are expanding into new markets outside of traditional hubs like northern Virginia. The electric grid that serves Virginia is facing looming reliability problems, with power demand expected to surge while supply falls due to the retirement of coal- and natural gas-powered plants.
New Markets and Opportunities
Companies like Tract and Lancium are securing large tracts of land in areas like Arizona and Nevada to develop massive data center campuses. These facilities will require up to 1.8 gigawatts of power to support as many as 40 individual data centers.
The Scale of Data Center Campuses
To put the scale of these facilities into perspective, a data center campus with a peak demand of one gigawatt is roughly equivalent to the average annual consumption of about 700,000 homes, or a city of around 1.8 million people. A campus of this size would use more power in one year than retail electric sales in Alaska, Rhode Island, or Vermont.
The Future of Data Centers
As the industry continues to grow, data center campuses will become increasingly massive, with facilities of 500 megawatts or more expected to become more common in the 2030s and 2040s. These facilities will require careful planning and collaboration with utilities, system operators, and communities to ensure that they don’t push up residential and commercial electric rates.
The Role of Nuclear Power
Major technology companies are turning to nuclear power in search of more reliable sources of electricity. Microsoft is supporting the restart of the Three Mile Island nuclear plant, while Amazon and Alphabet’s Google are investing in small nuclear reactors. However, building new nuclear reactors is expensive and fraught with delays.
The Short-Term Solution: Natural Gas
In the short term, natural gas will fuel much of the power demanded by data centers. While this will slow progress toward meeting emissions targets, investments could be made in new gas generation that adds carbon capture and battery storage technology over time to mitigate the environmental impact.
The Hope for a Sustainable Future
The industry hopes that gas demand will taper off as renewables expand, battery storage costs come down, and AI helps data centers operate more efficiently. As Ali Fenn of Lancium notes, “Hopefully, it’s a short-term side step… What I’m seeing amongst our data center partners, our hyperscale conversations, is we cannot let this have an adverse effect on the environmental goals.”
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