The rapid growth of data centers driven by artificial intelligence (AI) and cloud computing is creating a significant surge in electricity demand, with some campuses expected to consume more power than entire cities or even U.S. states. As AI technology accelerates, data centers, which house critical servers for business and consumer applications, are growing exponentially. Experts predict that certain data center campuses will soon require gigawatts of power, equivalent to twice the electricity consumption of Pittsburgh in 2023. This surge in energy demand is placing pressure on existing infrastructure, and finding enough power and suitable land for such expansive developments is becoming increasingly difficult.
AI-driven data centers are now critical for national and economic security, as they underpin global efforts in technological advancements. According to Ali Fenn, president of Lancium, which develops data center campuses in Texas, technology companies are engaged in a “race of a lifetime” to dominate the AI market. However, meeting the power demands of these sprawling facilities is challenging. Renewable energy, while a key part of the solution, is not sufficient to meet the growing needs of these campuses. Natural gas, although a temporary solution, is necessary for reliability but poses a challenge to achieving carbon emission reduction targets.
As data centers expand, developers are facing challenges in securing enough land and power. With the electric grid in Virginia, a major hub for data centers, facing reliability issues due to plant retirements, companies like Tract are looking to new markets such as Arizona and Nevada. Tract, for example, is developing a site in Buckeye, Arizona, that will support up to 1.8 gigawatts of power, enough to support 40 individual data centers. A single gigawatt of power can supply the needs of a city of about 1.8 million people, highlighting the scale at which these facilities are growing.
As data centers approach these massive power demands, they must ensure that local communities’ electricity costs and grid reliability are not negatively impacted. Partnerships with utilities are critical to ensuring that these facilities are seen as assets rather than liabilities. Despite the push for renewable energy, many data center operators are also turning to nuclear power, as it offers a more reliable source of energy. However, the construction of new nuclear plants is costly and often faces delays, making natural gas the primary short-term solution.
The growing power consumption of data centers underscores the need for a balance between technological growth and environmental sustainability. While renewables will eventually play a larger role, natural gas and other energy solutions will remain necessary in the near term to support the digital infrastructure powering AI.
