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Data centers could sharply increase electricity demand in California and nationwide in the coming years, straining power grids and creating political friction. But that surge could also accelerate grid decarbonization, according to experts who convened at Stanford University on May 1 for the Sustainable Data Centers Symposium.
The event convened policymakers, climate activists, academics, energy sector leaders and community members to discuss responsible growth for data centers – managing growth without imposing external costs on communities or the planet. Artificial intelligence is driving the rapid buildout in data centers.
“We all use AI in our regular, daily lives, and we’re going to use it even more going forward,” said panelist Susan Uthayakumar, chief sustainability officer of Prologis. “So the answer isn’t to not build the data centers.”
Data centers currently consume 4 to 5% of the country’s electricity, and that figure could double or triple by 2030, according to panelist Tom Wilson from Electric Power Research Institute, a research institution based in Stanford Research Park.
Locally, Pacific Gas & Electric has indicated it has requests for nearly 2 gigawatts of new demand from data centers in the San José area. That’s twice the peak load of around 1 gigawatt for the entire city of San Jose, according to panelist Lori Mitchell, who serves as energy director for the city. In Santa Clara, the city’s 58 data centers consume 55% of the power usage from Silicon Valley Power, according to Nico Procos, director of the utility.
“What I hear talking to data centers all day is: ‘We need more power,’” Procos said at the event.
Efficiency is a key strategy for meeting the increased demand, experts said.
“Our first approach is to ensure that we get every single megawatt, every single kilowatt actually out of the existing grid,” said John McFarland, an executive at Portland General Electric in Oregon.
McFarland added that the utility company conducts a net load strategy assessing the times of the year when energy constraints are most likely, and then finds creative ways to meet demand in the roughly 200 hours of the year when the load is likely to be the highest.
Panelists also mentioned that data centers can help reach renewable energy goals since data centers are a large purchaser of renewable energy through power purchase agreements. Some data centers operators also have flexible electricity loads where they can shift computing tasks to times when energy is abundant, said McFarland.
“Data centers are neither good nor bad, right?” said state Sen. Josh Becker, D-Menlo Park, in an interview after the event. “With our particular grid here in California, where we’ve got massive excess capacity most of the time, data centers done right can be quite helpful and bring down rates for everyone.”
PG&E estimates that every 1,000 megawatts of new demand from data centers can help lower all customer bills by 1-2% as the larger customers assume a larger share of the costs inand maintaining the grid.
That outlook runs counter to other analyses which have found that data centers could drive up the electricity bills nationwide by 2030, particularly in states like Ohio and Virginia thatwho have a large number of centers. California, which has one of the greenest grids in the nation also has among the highest electricity bills in the country.
Data centers have also faced growing, bipartisan opposition in communities around the country. In April, Maine’s legislature passed the first state-wide moratorium on new data centers, though democratic Governor Janet Mills subsequently vetoed the law. A city in Wisconsin recently passed a referendum to restrict future data centers following the construction of a massive data center for Oracle and OpenAI. In Ohio, residents are attempting to pass a citizen-initiated state constitutional amendment that would ban new data centers larger than 25 megawatts.
In some cases, that opposition has turned violent. OpenAI CEO Sam Altman’s San Francisco home was recently targeted in an attack by a person who reportedly expressed anti-AI views in a written manifesto.
When asked by attendees at the event how companies planned to manage this growing opposition, panelists said that community buy-in was essential to the success of projects.
“I’m a big believer in, if you can’t do it the right way, then we shouldn’t be doing it,” said McFarland. “You have to engage at the micro-level of every single impacted community and understand their exact issues.”
