The county seat of Santa Clara is touting its partnership with Pacific Fuel & Electrical, claiming town is “the West Coast’s premier vacation spot for knowledge middle growth.” The investor-owned utility now estimates it has sufficient capability in its planning pipeline to push town’s electrical energy use to virtually thrice its present peak.
These plans are forcing main grid upgrades, PG&E and metropolis officers say, whereas elevating questions on who pays for them and whether or not the state can maintain the facility clear.
Panelists at a CalMatters occasion in downtown San José clashed over key points. They included an area official working with PG&E on town’s data-center build-out, a tech advocate urging California to grab the financial second, a Stanford vitality professional urgent for a extra modernized grid and a utility watchdog skeptical of AI’s promised advantages.
Their dialogue centered on how shortly California ought to transfer to accommodate new demand, what data the general public needs to be entitled to and tips on how to maintain clients from shouldering the price of infrastructure that will by no means be totally used.
Proposals to extra strictly regulate knowledge middle growth died within the Legislature this 12 months. Going ahead, a number of state companies and commissions are anticipated to take up additional discussions, together with the California Vitality Fee, the Little Hoover Fee and the California Public Utilities Fee.
How a lot vitality will California’s new knowledge facilities really need?
The surge in AI is complicating efforts by regulators and utilities to forecast how shortly knowledge facilities will develop and the way a lot energy they’ll want. Firms can suggest massive services with out committing to construct them, the computing calls for behind AI are altering shortly and cooling wants range throughout the state. These elements make long-term vitality wants laborious to pin down.
In keeping with the state’s electricity-demand forecast, utilities report that knowledge facilities, in planning paperwork, have requested 18.7 gigawatts of service capability. That’s sufficient to energy roughly 18 million properties, in contrast with California’s estimated 14 to fifteen million. Regulators don’t anticipate all of these tasks to be constructed, and assume those that do will come on-line step by step and function at lower than their requested capability, producing a forecast of between 4 and 6 gigawatts by 2040.
Liang Min, who directs Stanford’s Bits & Watts Initiative, and a speaker on CalMatters’ panel, mentioned that forecasting is especially robust as a result of corporations are rolling out new AI apps — or “utility layers,” as he put it — at breakneck velocity. They embody merchandise like ChatGPT that use massive language fashions. Nobody is aware of which apps will take off, and people unsure bets are driving enormous calls for on the facility grid.
“Proper now we’re actually struggling,” Min mentioned. “The danger is extraordinarily excessive within the utility layers.”
The Public Advocates Workplace, an impartial client watchdog inside the California Public Utilities Fee, just lately warned that speedy data-center development may go away Californians paying for billions of {dollars} in grid upgrades if tasks by no means materialize or use far much less energy than promised.
“Ratepayers may find yourself paying for pricey infrastructure upgrades that is probably not wanted for a few years — or in any respect,” the workplace mentioned in its commentary.
Min mentioned forecasting data-center load is a nationwide problem, however California will want higher instruments to maintain charges in verify, meet its clean-energy targets and keep aggressive with states racing to draw knowledge facilities and high-paying tech jobs.
Native officers have additionally begun to grapple with the uncertainty. In San José, metropolis vitality officers say they’re reluctant to obtain further energy till they know which tasks will really be constructed. “We don’t need to purchase extra energy than we’d like,” mentioned panelist Lori Mitchell, director of San José Clear Vitality, town’s publicly-owned electrical energy supplier. “That’s job No. 1.”
What are the environmental considerations across the data-center increase?
California’s data-center increase is bringing a wave of environmental considerations that state officers are solely starting to grasp. These considerations middle on water use, the carbon emissions tied to rising vitality demand and the air air pollution from diesel backup mills.
Air high quality is a specific concern. Whereas back-up mills run solely intermittently, their presence is concentrated in a handful of areas. In Santa Clara County, the place many services sit shut collectively in dense industrial areas, the native impacts could possibly be larger just because a lot gear is packed right into a small house.
But the state nonetheless has restricted visibility into what knowledge facilities are doing. Makes an attempt to require extra transparency stalled this 12 months amid tech trade opposition. The one measure that turned regulation offers regulators the authority to find out whether or not knowledge facilities are driving up prices — however stops wanting requiring environmental reporting.
Ahmad Thomas, chief government of the Silicon Valley Management Group, and one other panelist, mentioned his group opposed the electrical energy disclosure and water reporting measures as a result of they’d make California much less aggressive.
“It’s very laborious to see a world the place California is on the prime of the AI pile if we should not have an strategy to knowledge facilities that’s — at minimal — mildly aggressive with different states,” he added.
Client advocates say the ignorance leaves communities unprotected. “We definitely assume there must be extra transparency — that’s factor,” mentioned panelist Mark Toney, the chief director of the the Utility Reform Community, a ratepayer advocacy group.
Will knowledge facilities decelerate California’s swap to wash vitality?
The speedy development of information facilities may gradual California’s clean-energy transition if it retains the state tied to pure gasoline. And a number of the carbon-free various vitality sources that might meet their energy wants are deeply controversial amongst environmentalists.
The state has pledged to achieve 100% carbon-free electrical energy by 2045, but it nonetheless relies upon closely on natural-gas vegetation throughout scorching summer season days. A current report by the environmental assume tank Subsequent 10 and UC Riverside estimated that data-center carbon emissions practically doubled from 2019 to 2023 — largely from gas-fired era — underscoring how even a comparatively clear grid might wrestle to soak up AI-driven load with out larger emissions.
State leaders are making coverage shifts as AI demand grows. California this 12 months accredited becoming a member of a broader Western energy market, a transfer pushed partly by new calls for on the grid, together with knowledge facilities. Critics warn the change may expose the state to dirtier electrical energy from different states and weaken its management over clean-energy guidelines.
Min of Stanford argues that California might want to depend on choices some environmentalists would reasonably keep away from. That features holding onto current assets just like the Diablo Canyon nuclear plant. In a current report, Min argued the state can even want extra “clear, agency” energy — assets that may function across the clock — corresponding to geothermal vitality or natural-gas vegetation with carbon seize.
PG&E agrees. Spokesperson Stephanie Magallon informed CalMatters in an electronic mail that nuclear energy, carbon-capture programs and enormous solar-plus-battery tasks are all choices into consideration for powering knowledge facilities in its area. However environmental justice critics in California have opposed carbon seize expertise, calling it unproven tech that dangers extending fossil-fuel use.
Mitchell mentioned group alternative aggregators can handle new data-center load whereas conserving energy clear and reasonably priced. San José’s combine is already 60% renewable, and he or she mentioned the most important alternative is flexibility — getting knowledge facilities to shift use off the most well liked afternoons so town can keep away from shopping for further energy.
Will knowledge facilities elevate your electrical invoice?
California’s data-center increase is reshaping the battle over electrical energy payments, exposing a divide over whether or not these new clients will decrease prices — or drive them larger for everybody else.
PG&E argues that including massive customers like knowledge facilities can decrease charges as a result of mounted grid prices could be unfold throughout extra clients. It additionally claims the grid is underutilized on common — working at about 45% of capability — though the grid faces actual pressure throughout the hottest hours and in elements of the system that routinely run near their limits. If knowledge facilities will be linked in locations with out there capability, PG&E argues, they may assist unfold prices with out worsening congestion.
Toney, one other panelist, urged the state to decelerate, warning that California is planning main infrastructure with out realizing which knowledge facilities are actual or how their prices will land on buyer payments.
“I’m anxious that we’re engaged in what I name faith-based policymaking,” he mentioned. “The advantages are very speculative, however the prices are very actual.”
Some states, mentioned Toney, have begun tightening guidelines across the development of information facilities. One regulation in Oregon would require data-center grid prices to stay off family payments. A Minnesota regulation will give very massive knowledge facilities their very own billing class so regulators can maintain their prices separate from different clients’ electrical payments.
“This challenge of information facilities and the connection between affordability and clear vitality is of nationwide concern, and California is definitely behind on this,” Toney mentioned. “There’s this mythology about California being the chief on a regular basis.”
Alejandro Lazo writes for CalMatters.
