By Greg Gorman • Conservation Committee Chair • ggorman@embargmail.com
Energy-hungry data centers, which house the equipment used for large-scale computing, storing, and networking, are supported by power subsystems (e.g., uninterruptible power supplies and backup generators), ventilation and cooling equipment, fire suppression systems, and building security systems.
The scale of the energy needed is such that data centers may contribute significantly to climate instability.
Worldwide, the data center market was valued at $341.8 billion in 2024 and could reach $622.4 billion by 2030, according to one estimate. Most recently, OpenAI, SoftBank, and Oracle announced the formation of a joint venture called Stargate to invest up to $500 billion over four years to build more data centers in the United States.
In New Jersey, demand for data center space is surging “on the back of Big Tech and the artificial intelligence arms race,” according to RealEstateNJ.
From a Sierra Club perspective, data centers have a potential negative impact on the environment and the achievement of energy sustainability goals. They rely on grid connections for uninterruptible power supplies, and it matters whether that power source is renewable or not.
Lawrence Berkeley National Labs reports that data centers used 1.9% of the nation’s electricity in 2018 and 4.4% in 2023. They predict that consumption will reach or exceed 6.7% by 2030.
The spike in power use from artificial intelligence (AI) data centers, electric vehicle adoption, and building electrification will likely spur significantly more natural gas and nuclear energy electricity generation, which is concerning from climate and environmental safety standpoints.
In a 2024 report on the availability of clean energy tax credits, the US Department of Energy suggested that “near-term data center driven electricity demand growth is an opportunity to accelerate the build-out of clean energy solutions, improve demand flexibility, and modernize the grid.”
Also last year, the Sierra Club recommended that large-load customers such as data centers drive utilities toward green power generation by collaborating with them on energy supply solutions.
This is already happening in some instances. In 2021, Microsoft signed an agreement with energy firm AES to power data centers in Virginia with renewable energy. In 2023, Google switched on a new kind of geothermal plant in Nevada to feed the power grid that serves two data centers near Reno and Las Vegas. Smaller data centers may enter into power purchase agreements for renewable energy or 24/7 carbon-free electricity arrangements with their power providers.
Most data centers use diesel-powered generators as backup systems. However, on-site battery storage solutions are a cleaner, more efficient alternative.
Data centers, like any industrial activity, affect noise, lighting, water use, air pollution levels, and property appearance and valuations. If not properly sited, data centers could cause electric bills to go up if power grid upgrades are required. Community land-use boards must be petitioned to ensure all adverse impacts are mitigated before data centers are approved. On its webpage, Community & Environmental Defense Services has an excellent discussion of these impacts along with mitigation strategies entitled “Protecting Neighborhoods from Data Center Impacts.”
Resources
Data Center Market: https://shorturl.at/LSEqP
Electricity Demand: https://shorturl.at/x0cce