Yves here. The fact that local politicians are using opposition to data centers due to the impact on power costs in their communities says this has become a hot issue. It also counters Trump’s generally ineffective efforts to combat inflation, although he is keen to contain oil prices. What happens when state and federal officials can no longer hide from the fact that data center proliferation is an transfer from ordinary citizens to tech bros?
By Haley Zaremba, a writer and journalist based in Mexico City. Originally published at OilPrice
- The rapid growth of data centers, fueled by the artificial intelligence boom, is leading to a bipartisan backlash in local communities across the United States due to their significant impact on energy prices and land use.
- Major utilities in the Southeast project substantial increases in electrical load, largely attributed to data centers, which is translating into higher energy bills for consumers, sparking an energy affordability crisis.
- As pushback intensifies in the U.S., with communities successfully halting projects, data center developers are increasingly seeking opportunities in Latin American nations.
It is said that in times of great division, a common enemy can be a force for unification. And that common enemy has arrived, in the form of energy-sucking data centers and their wholesale attack on energy prices. As the artificial intelligence boom continues to pick up speed, massive data center projects are being greenlit left and right, and the communities expected to foot the bill for this expansion are starting to fight back — even if it means reaching across the aisle.
While political debates over data centers are not yet cropping up at the federal level or even the state level, it has become a hot-button issue in local politics, particularly in the Southeast of the country, where data centers are popping up like mushrooms. The Institute for Energy Economics and Financial Analysis reports that in Virginia, South Carolina and Georgia, “data centers are responsible for 65% to more than 85% of projected load growth” for utilities. Accordingly, major utilities in these states, plus North Carolina, project that they will collectively add 32,600 MW of electrical load over the next 15 years.
A recent analysis from McKinsey projects that global energy demand from data centers will likely shoot up by between 19 and 22 percent annually through 2030, reaching a total annual demand of 171 to 219 gigawatts. “This contrasts with the current demand of 60 GW, raising the potential for a significant supply deficit,” McKinsey reported in October, 2024. “To avoid a deficit, at least twice the data center capacity built since 2000 would have to be built in less than a quarter of the time,” the report went on to say.
Someone has to pay for all that additional energy consumption. And it won’t be the tech companies who are behind the omnipresence of AI integration. It will come at the expense of higher energy bills for consumers who source their energy from grids feeding data centers, whether they benefit from AI or not.
“We are witnessing a massive transfer of wealth from residential utility customers to large corporations—data centers and large utilities and their corporate parents, which profit from building additional energy infrastructure,” Maryland People’s Counsel David Lapp recently told Business Insider earlier this year. “Utility regulation is failing to protect residential customers, contributing to an energy affordability crisis.”
And that affordability crisis is now leading to bilateral opposition to the greenlighting of new data center projects across the nation. Reporting from the sidelines of a debate in suburban Virginia county, Semafor noted that the opposing candidates could at least agree on one thing:
“I think we should, personally, block all future data centers,” Patrick Harders, the Republican county board candidate, was quoted by Semafor. His Democratic opponent George Stewart agreed, saying that “the crushing and overwhelming weight of data centers” amounts to a crisis, and an unjust one at that, with massive corporations offloading their expenses onto local constituents.
Data centers aren’t just eating up more and more of consumers’ paychecks, they’re also snapping up massive tracts of land. In Indiana, local residents recently won out in a battle against Google, which wanted to convert more than 450 acres in the Indianapolis suburb into a sprawling data center campus. “When a lawyer representing Google confirmed at a September public meeting that the company was pulling its data center proposal, cheers erupted from sign-waving residents,” NPR reports. Similar stories are unfolding all across the country.
As data centers receive increasing pushback in the United States, developers are increasingly looking to Latin America to host their data center development projects, effectively outsourcing the issue to nations with even more limited resources.
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