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 information middle improvement.” The investor-owned utility now estimates it has sufficient capability in its planning pipeline to push town’s electrical energy use to nearly 3 times 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 knowledgeable 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 info the general public ought to be entitled to and methods to hold clients from shouldering the price of infrastructure which will by no means be totally used.
Proposals to extra strictly regulate information middle improvement 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 information facilities really need?
The surge in AI is complicating efforts by regulators and utilities to forecast how shortly information facilities will develop and the way a lot energy they’ll want. Firms can suggest giant amenities with out committing to construct them, the computing calls for behind AI are altering shortly and cooling wants range throughout the state. These components make long-term vitality wants onerous to pin down.
In response to the state’s electricity-demand forecast, utilities report that information 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 initiatives to be constructed, and assume those that do will come on-line steadily 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 corporations are rolling out new AI apps — or “software layers,” as he put it — at breakneck velocity. 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 large calls for on the facility grid.
“Proper now we’re actually struggling,” Min mentioned. “The chance is extraordinarily excessive within the software layers.”
The Public Advocates Workplace, an impartial shopper watchdog throughout the California Public Utilities Fee, just lately warned that fast data-center progress might depart Californians paying for billions of {dollars} in grid upgrades if initiatives by no means materialize or use far much less energy than promised.
“Ratepayers might 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 test, meet its clean-energy targets and keep aggressive with states racing to draw information 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 acquire further energy till they know which initiatives will really be constructed. “We don’t wish 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 issues across the data-center growth?
California’s data-center growth is bringing a wave of environmental issues that state officers are solely starting to grasp. These issues middle on water use, the carbon emissions tied to rising vitality demand and the air air pollution from diesel backup turbines.
Air high quality is a selected concern. Whereas back-up turbines run solely intermittently, their presence is concentrated in a handful of areas. In Santa Clara County, the place many amenities sit shut collectively in dense industrial areas, the native impacts may very well be larger just because a lot gear is packed right into a small area.
But the state nonetheless has restricted visibility into what information facilities are doing. Makes an attempt to require extra transparency stalled this 12 months amid tech business opposition. The one measure that turned regulation offers regulators the authority to find out whether or not information 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 might make California much less aggressive.
“It’s very onerous to see a world the place California is on the prime of the AI pile if we should not have an method to information facilities that’s — at minimal — mildly aggressive with different states,” he added.
Shopper advocates say the lack of awareness leaves communities unprotected. “We actually suppose there must be extra transparency — that’s a great factor,” mentioned panelist Mark Toney, the manager director of the the Utility Reform Community, a ratepayer advocacy group.
Will information facilities decelerate California’s swap to scrub vitality?
The fast progress of information facilities might 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 suppose 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 greater emissions.
State leaders are making coverage shifts as AI demand grows. California this 12 months permitted becoming a member of a broader Western energy market, a transfer pushed partially by new calls for on the grid, together with information facilities. Critics warn the change might 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 quite keep away from. That features holding onto current sources just like the Diablo Canyon nuclear plant. In a current report, Min argued the state can even want extra “clear, agency” energy — sources that may function across the clock — comparable to geothermal vitality or natural-gas vegetation with carbon seize.
PG&E agrees. Spokesperson Stephanie Magallon informed CalMatters in an e-mail that nuclear energy, carbon-capture techniques and huge solar-plus-battery initiatives are all choices into account for powering information 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 group alternative aggregators can handle new data-center load whereas maintaining 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 information facilities to shift use off the most well liked afternoons so town can keep away from shopping for further energy.
Will information facilities increase your electrical invoice?
California’s data-center growth is reshaping the combat over electrical energy payments, exposing a divide over whether or not these new clients will decrease prices — or drive them greater for everybody else.
PG&E argues that including giant customers like information facilities can decrease charges as a result of fastened 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 information facilities might be linked in locations with accessible capability, PG&E argues, they might 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 figuring out which information facilities are actual or how their prices will land on buyer payments.
“I’m nervous 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 progress of information facilities. One regulation in Oregon would require data-center grid prices to stay off family payments. A Minnesota regulation will give very giant information facilities their very own billing class so regulators can hold 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.
