The county seat of Santa Clara is touting its partnership with Pacific Gasoline & 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 nearly 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 hold 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 rapidly California ought to transfer to accommodate new demand, what data the general public needs to be entitled to and hold clients from shouldering the price of infrastructure which will by no means be absolutely used.
Proposals to extra strictly regulate knowledge middle growth died within the Legislature this 12 months. Going ahead, a number of state businesses and commissions are anticipated to take up additional discussions, together with the California Power Fee, the Little Hoover Fee and the California Public Utilities Fee.
How a lot vitality will California’s new knowledge facilities really want?
The surge in AI is complicating efforts by regulators and utilities to forecast how rapidly knowledge facilities will develop and the way a lot energy they’ll want. Firms can suggest giant services with out committing to construct them, the computing calls for behind AI are altering rapidly and cooling wants fluctuate throughout the state. These elements make long-term vitality wants arduous 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 count on all of these tasks to be constructed, and assume those that do will come on-line progressively 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 powerful as a result of firms are rolling out new AI apps — or “software layers,” as he put it — at breakneck pace. They embrace merchandise like ChatGPT that use giant language fashions. Nobody is aware of which apps will take off, and people unsure bets are driving big calls for on the facility grid.
“Proper now we’re actually struggling,” Min mentioned. “The danger is extraordinarily excessive within the software layers.”
The Public Advocates Workplace, an impartial client watchdog throughout the California Public Utilities Fee, lately warned that speedy data-center development may depart 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 might not be 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 extra 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 Power, 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 better just because a lot tools is packed right into a small area.
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 provides regulators the authority to find out whether or not knowledge facilities are driving up prices — however stops in need of requiring environmental reporting.
Ahmad Thomas, chief govt 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 arduous to see a world the place California is on the prime of the AI pile if we do not need 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 change to wash vitality?
The speedy development of knowledge facilities may sluggish California’s clean-energy transition if it retains the state tied to pure fuel. And among the carbon-free various vitality sources that might meet their energy wants are deeply controversial amongst environmentalists.
The state has pledged to succeed in 100% carbon-free electrical energy by 2045, but it nonetheless relies upon closely on natural-gas crops throughout scorching summer time days. A current report by the environmental assume tank Subsequent 10 and UC Riverside estimated that data-center carbon emissions almost doubled from 2019 to 2023 — largely from gas-fired technology — underscoring how even a comparatively clear grid could 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 authorised 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 slightly keep away from. That features holding onto present sources just like the Diablo Canyon nuclear plant. In a current report, Min argued the state will even want extra “clear, agency” energy — sources that may function across the clock — comparable to geothermal vitality or natural-gas crops with carbon seize.
PG&E agrees. Spokesperson Stephanie Magallon informed CalMatters in an e mail that nuclear energy, carbon-capture methods and huge solar-plus-battery tasks are all choices into account for powering knowledge facilities in its area. However environmental justice critics in California have opposed carbon seize know-how, calling it unproven tech that dangers extending fossil-fuel use.
Mitchell mentioned neighborhood selection aggregators can handle new data-center load whereas holding energy clear and inexpensive. San José’s combine is already 60% renewable, and he or she mentioned the largest alternative is flexibility — getting knowledge facilities to shift use off the most popular afternoons so town can keep away from shopping for extra energy.
Will knowledge facilities increase your electrical invoice?
California’s data-center increase is reshaping the struggle 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 giant 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 through the hottest hours and in elements of the system that routinely run near their limits. If knowledge facilities may 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 understanding which knowledge facilities are actual or how their prices will land on buyer payments.
“I’m fearful 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 knowledge facilities. One regulation in Oregon would require data-center grid prices to stay off family payments. A Minnesota regulation will give very giant knowledge facilities their very own billing class so regulators can hold their prices separate from different clients’ electrical payments.
“This challenge of knowledge 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.
