An AI server farm tsunami threatens to overwhelm the West’s power grid and water supplies.
By Jonathan Thompson, High Country News
This is an installment of the Landline, a monthly newsletter from High Country News about land, water, wildlife, climate and conservation in the Western United States. Sign up to get it in your inbox.
In early November, Texas-based New Era Energy & Digital announced plans to build a “hyperscale,” meaning massive, AI-processing data center complex in Lea County, New Mexico, the epicenter of the Permian Basin oil and gas drilling boom. The campus will be so big, and use so much power, that, if and when it is built, it will come with its own nuclear and gas power plants, with a mind-blowing combined generation capacity of about 7 gigawatts. That’s like piling the West’s largest nuclear and natural gas plants — Palo Verde and Gila River, both near Phoenix — on top of one another, and then adding another 800 megawatts. That kind of power could electrify something like 5.3 million homes, though these power plants’ output presumably will all go toward more pressing requirements: processing movie streaming, doomscrolling, social media posting and, especially, AI-related activities.
Despite the enormity of this proposal, it has received very little news coverage. This is not because anyone is trying to keep it secret, but rather because such announcements have become so common that it’s hardly worth mentioning every new one. New Era’s hyperscale server farm and others like it are still a long way from generating and then devouring their own electricity. But even if only a fraction of the current proposals succeed, they will transform the West’s power grid, its landscapes and its economies as significantly as the post-World War II Big Buildup, when huge coal plants and hydroelectric dams sprouted across the region to deliver power to burgeoning cities via high-voltage transmission lines.
In fact, this transformation is already underway. A new report from the nonprofit NEXT 10 and University of California Riverside found that, in 2023, data centers in California pulled 10.82 terawatt-hours of electricity — 1 terawatt equals 1 trillion watts — from the state’s grid, or about enough to power 1 million U.S. households. This resulted in about 2.4 million tons of carbon emissions, even with California’s relatively clean energy mix. (On more fossil fuel-reliant grids, the emissions would have been twice that, or even more.) These same centers directly and indirectly consumed about 13.2 billion gallons of water for cooling and electricity generation. In Silicon Valley, more than 50 data centers accounted for about 60% of one electricity provider’s total load, prompting the utility to raise its customers rates to fund the transmission and substation upgrades and new battery energy storage the facilities required.
These facilities are also colonizing cities and towns far from Big Tech’s Silicon Valley epicenter. Over 100 data centers — structures that resemble big-box stores overflowing with row after row of computer processors — have already sprung up in Phoenix-area business parks, and the planned new ones could increase Arizona’s total power load by 300% over current levels, according to utilities. Recently, Arizona Public Service announced it would keep burning coal at the Four Corners Power Plant beyond its scheduled 2031 retirement to help meet this growing demand.
Data center developments around the West include:
- NorthWestern Energy signed on to provide up to 1,000 MW of power — or nearly all of the utility’s generating capacity — to Quantica Infrastructure’s AI data center under development in Montana’s Yellowstone County.
- The 290-mile Boardman-to-Hemingway transmission project under development in Idaho and Oregon was initially designed to serve about 800,000 PacifiCorp utility customers. But in October it was revealed that the line now will deliver all of its electricity to a single industrial customer in Oregon, most likely a new data center.
- In September, an NV Energy executive told a gathering in Las Vegas that tech firms are asking the utility to supply up to 22,000 megawatts of electricity for planned data centers. Since the utility has largely moved away from coal, this new load would likely be met by generation from existing and planned natural gas facilities, along with proposed utility-scale solar installations.
- Xcel Energy expects to spend about $22 billion in the next 15 years to meet new data centers’ projected power demand in Colorado, potentially doubling or even tripling legacy customers’ rates. Xcel and the state’s public utilities commission are currently working to reverse the planned closure of a coal plant due to projected data center-associated electricity shortages.
- Wyoming officials are doing their best to lure data centers and cryptocurrency firms to the state, and it seems to be working. This summer, Tallgrass proposed building an 1,800 MW data center, along with dedicated gas-fired and renewable power facilities, near Cheyenne. It would add to Meta’s facility in Cheyenne and the 1,200 MW natural gas-powered Prometheus Hyperscale data center under development in Evanston. Observers say electricity demand from these centers could transform the physical and regulatory utility landscape and potentially drive up costs for “legacy” customers.
- New Mexico utilities are struggling to meet growing demand from an increasing number of data centers while also complying with the state’s Energy Transition Act’s requirements for cutting greenhouse gas emissions.
- Doña Ana County approved tax incentives for Project Jupiter, a proposed $165 billion data center campus in Santa Teresa in the southeastern corner of New Mexico. Developers have indicated they plan on building dedicated power generation, though they have not yet disclosed the energy sources.
- Numerous companies are eyeing Delta, Utah, as a site for new data centers, drawn by the area’s relatively cheap land, existing agricultural water rights and the fact that it’s home to the Intermountain Power Project, a colossal coal plant built during the original Big Buildup in the years after World War II. The plant is scheduled to be converted to run on natural gas and, ultimately, hydrogen, but Utah lawmakers want at least one of its units to continue to burn coal. They just need a buyer for the dirty power it would produce, and data centers could fit the bill. Fibernet MercuryDelta is looking to construct the 20 million-square-foot Delta Gigasite there, and Creekstone Energy plans to manage 10 gigawatts of capacity there, with power coming from coal, solar and natural gas.
The Western power grid is interconnected but also divided into 38 balancing authorities, or grid operators. Nearly every one of them is expected to see an increase in data center-driven demand over the next decade or so as the Big Digital Buildup gains steam, and few of them are currently equipped to meet that demand. In fact, the North American Electricity Reliability Corp. warned this month that growing data center-driven power demand is increasing the risk of outages this winter in parts of the West. Therefore, many of the largest data centers are going to need to generate their own power, while utilities also will have to scramble to add generating capacity and associated infrastructure as quickly as possible to serve the region’s on-grid facilities. The costs of that new infrastructure will be borne by each utility’s ratepayers.
How will the needed power be generated?
There’s simply no way utilities and developers can meet the projected demand with solar and wind, alone. So, utilities are already making plans to keep existing coal plants running past previously scheduled retirement dates, and to build new natural gas plants and even nuclear reactors. Yes, nukes: Google, Switch, Amazon, Open AI and Meta are all looking to power proposed facilities with the new — so new they have yet to be developed — crop of small, modular and advanced reactors, if and when they are finally up and running.
Can data centers be “sustainable”?
These developments will have environmental consequences, some more than others. Fossil fuel burning feeds climate change and pollutes the air, and oil and gas drilling and coal mining ravage landscapes; utility-scale solar and wind facilities can harm wildlife habitat and often require hundreds of miles of new transmission lines to move the power around; and nuclear power comes with unique safety hazards and a nagging radioactive waste problem, while the uranium mining and milling industry risks reenacting its deadly Cold War legacy. Even a facility that gets all of its power from solar and batteries is still using resources that, without the extra demand, would otherwise be replacing fossil fuels on the grid. And, unless it has a closed-loop air-cooled system, the data center will still consume water for cooling, usually from municipal drinking water systems.
Wyoming-based Prometheus Hyperscale has made waves with its ambitious and seemingly visionary talk of building “sustainable” data centers with dedicated clean energy generation, water recycling and efficient cooling systems that would capitalize on the cold in the Northern Rockies. It’s even talked about harnessing the heat from the servers to warm greenhouses and shrimp-farming operations. Maybe, one day, the power will be supplemented by nuclear micro-reactors. But so far, the company’s walk is not exactly matching its talk. In the beginning, at least, the facility will run on natural gas, and Prometheus says it will offset carbon emissions by paying another company to capture and sequester carbon dioxide from biofuel plants in Nebraska.
Is resistance futile?
Resistance to the imminent server farm tsunami and its outsized energy and water use is widespread, but because these are local projects considered on local levels, battling them can feel a bit like playing whack-a-mole. After Tucson-area residents defeated the city’s plan to annex the proposed Project Blue data center, which would have enabled it to use treated wastewater for cooling, the developers simply moved the project into the county and planned to use an air-cooling system, which requires less water but more energy. When opposition continued, the firm committed to investing in enough renewable energy on Tucson Electric Power’s grid to offset all of its electricity use.
Also working against the resistance is the fact that many local governments and utilities actually welcome the onslaught. Data centers can bring jobs and tax revenues — assuming the state, county or municipality doesn’t exempt them from taxes — to economically distraught areas. Meanwhile, utilities are champing at the bit to sell more of their product and raise rates to pay for the needed additional infrastructure. When announcing all the data centers headed for Nevada, NV Energy executive Jeff Brigger noted that the utility is “excited to serve this load.”
While much of the opposition to data centers is based on their environmental impacts and the effects they might have on utility rates and on the communities where they’re built, the notion of AI itself is also a factor. It’s one thing to see a lot of water or power used to grow food, for instance, but quite another to see coal power plants continue to run simply so that a computer can write a high school essay or answer an inane question or draw a picture or even serve as a companion of sorts. To be fair, AI does have potentially significant and positive applications, such as diagnosing medical conditions and crunching large quantities of data to find, say, possible cures for cancer or solutions to geopolitical problems.
But before it goes about changing the world, maybe AI ought to start with itself and figure out how to do its thing without using so much energy and water.
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This article first appeared on High Country News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
