Data centers are booming. Their need for power is causing utilities to retreat on green energy.

[Leroy N. Soetoro]

https://www.businessinsider.com/data-centers-energy-demand-utilities-
green-renewable-2023-10?utm_medium=referral&utm_source=yahoo.com

Companies like Amazon, Google, and Microsoft are fueling a surge in data
center development.

In Phoenix, data center power requests would require the system to almost
double in size.

A Nebraskan utility has postponed the shutdown of a coal plant.

In Phoenix and the surrounding region, data centers have attracted
attention for the noise they blare, the water they guzzle, and the large
tracts of land they've consumed.

Now, the prodigious power burned by this fast-growing industry threatens
to overwhelm the city's utilities and stymie efforts to remove fossil
fuels from the grid even as the climate crisis has flashed increasingly
dire signals. This year, the daily high temperature in Phoenix reached or
surpassed 110 degrees Fahrenheit for a record 54 days.

"We have about 7,000 megawatts of data center requests currently in our
pipeline," Karla Moran, an executive at Salt River Project, one of two
major utilities that serve the Phoenix region, told Insider. Moran noted
those requests rivaled the size of the utility's entire 11,000 megawatt
system.

While all of those power requests are not expected to materialize into
actual development, she said the size of the interest was unprecedented.
The data center industry's soaring electrical demand has been so
significant, it factored into the utility's far-reaching plans, Moran
said.

In October, the power company, better known as SRP, approved a significant
expansion of its generating capabilities that includes the development of
2,000 megawatts of new methane gas facilities. Those plants will
effectively preserve the size of its portfolio of fossil-fuel-fired
infrastructure into the next decade and potentially beyond. (Natural gas
is primarily composed of methane.)

Moran said data centers, with their heavy, around-the-clock power use,
were "one of the main reasons we look at having a resource like that."

Rising energy demand and a reluctance to shed fossil fuels
Data centers play an increasingly essential role in modern life, providing
the computing, storage, and transmission equipment that drive the
internet, mobile applications, and many other functions, including
autonomous vehicles, streaming video, and the digitization of records.

Many in the US are owned by big technology companies, including the three
largest providers of cloud services — Amazon, Microsoft, and Google — as
well as major publicly traded corporations like Equinix and Digital Realty
that specialize in developing and operating data facilities.

Artificial intelligence applications are expected to be a major new
customer of data centers and could require a new generation of facilities
designed specifically for AI's computational needs and heavier power
intensities. The amount of electricity needed to power data centers in
the U.S. is expected to more than double by 2030, according to McKinsey.

The industry's proliferating energy requirements present a challenge for
utilities already burdened by societal shifts, such as the adoption of
electric vehicles, the intensifying use of air-conditioning amid rising
temperatures, and the electrification of home heating and cooking.

The strain has pushed some, such as SRP, to use caution in stripping away
oil, gas, and even coal from their power-generating portfolios.

"Necessity will say you've got to have capacity to meet the demand of
what's coming your way," said Terry Boston, the former chief executive of
PJM, the country's largest grid operator by customer count. "With data
centers, you're going to do all of the above to have capacity to meet
those loads."

The reluctance to abandon fossil fuels runs counter to the rapid
decarbonization of the grid that scientists say is necessary to head off
the climate crisis.

A study published in September by Columbia University's Center on Global
Energy Policy stated that even if society were to achieve widespread
carbon cutting in the coming decades, the speed at which emissions
decrease within that period will be key.

One of that paper's authors, James Glynn, a senior research scholar at the
center, identified data centers as "additional and unforeseen load" on
grids nationally, placing "additional pressure on decarbonization goals."

"The grid needs to be zero carbon," Glynn said. Data centers "could be
quite consequential."

Caryn Potter, the Arizona representative for the Southwest Energy
Efficiency Project, a public-interest group that monitors the plans of
utilities in the region, said she was troubled by SRP's decision to
maintain the scale of its fossil-fuel fleet.

"SRP needs to come back to the drawing board and revisit what their goals
are to ensure that they're actually reaching the decarbonization we're
going to need," she said.

Utilities struggle to meet data center loads while cutting carbon
The utility-level impact of the data center industry's energy demand
reaches beyond Phoenix.

Omaha, Nebraska, for instance, has had a sharp rise in data center
development led by Google, which has invested $3.4 billion in data centers
it operates or plans to build in the state.

As a result, the utility, Omaha Public Power District, known as OPPD, said
it's experiencing the largest increase in demand in its nearly 80-year
history and identified data centers as the leading driver of that surge.

Last year, it sought and received approval to postpone the shutdown of a
coal plant on the north side of the city until 2026, according to a
spokeswoman. That facility had previously been scheduled for
decommissioning by the end of 2023. OPPD blamed the situation on delays
connecting two natural gas stations and solar projects to the grid, which
are scheduled to replace the coal facility.

In August, it adopted a plan to build up to 950 megawatts of new methane-
powered generating facilities as a part of a more than $2 billion
expansion that will almost double its capacity by 2033 to just over 5
gigawatts – about the size of New York City's electrical load on an
average day. A gigawatt equals 1,000 megawatts, enough energy to electrify
hundreds of thousands of homes.

OPPD has said it will use the new gas plants only periodically to provide
for power demand that exceeds the capacity of its growing portfolio of
renewables. But it has been delayed bringing clean energy projects online,
and its claims that fossil fuels will service only peak loads has elicited
skepticism from environmentalists.

"It's an awful lot of money to put into something that's not going to be
used very much," David Corbin, the energy chair for the Sierra Club's
Nebraska chapter, said of the new gas plants.

Corbin said he was dismayed that OPPD's development of solar was "dragging
its feet" but that "gas plants are moving forward with great speed."

In the country's largest data center market, in northern Virginia, the
utility Dominion Energy unveiled a plan earlier this year to double its
own capacity — an increase that would bring the size of the state's grid
on par with France's. To do it, the utility is considering a delay in
decommissioning two coal plants and building new methane-fired generating
stations that would total 9 gigawatts of capacity.

Dominion Energy said that it presented the 9 gigawatt plan only as a
"least-cost" option that it did not view "as a true alternative path
forward." The utility has presented other scenarios in which it would
build nearly 3 gigawatts or 1 gigawatt of new gas-fired capacity.

Still, Dominion has seen a record jump in data center demand. In a
September filing, it revealed it had completed contracts to deliver an
additional 5.8 gigawatts of capacity to data centers by 2032, an increase
that would triple the industry's current power load in northern Virginia.

Aaron Ruby, a spokesman for Dominion, wrote in an email that the large and
unrelenting power drain of data centers "reinforces the need for always-
reliable electricity sources that can provide power around the clock."

Renewable energy 'can't produce enough power consistently'
The boom in data centers is happening as many utilities have also been
ramping up their development of renewable power in an effort to green the
grid and meet either voluntary goals or deadlines imposed by some states
to cut their carbon output.

As part of its recently adopted system plan, SRP, for instance, said it
would triple its portfolio of solar power and other renewables. Dominion
has said it plans to grow its renewable generating capacity tenfold by
2038, plans that include the largest offshore wind project in the country.
OPPD, too, says it will scale up its clean energy, with up to 1,500
megawatts of new projects, enough to light up as many as 450,000 homes, a
spokeswoman said.

Data center developers and users say they are also champions of removing
emissions from the grid. The industry has used its voluminous energy needs
to bankroll the construction of new renewable projects by signing long-
term purchase agreements for the power.

In reference to Google's data center development in Nebraska, Devon
Smiley, a spokeswoman for Google, noted its goal to use carbon-free
electricity around the clock for its operations by 2030.

"We are actively exploring clean energy projects in the state in close
cooperation with OPPD but don't have any details to share at this time,"
Smiley said.

Amazon, one of the country's largest data center users, told Insider it
had struck deals, known as power purchase agreements, to buy energy from
around 6 gigawatts of solar and wind facilities across the multistate
electrical grid that includes northern Virginia.

Those electrons will help offset the energy consumed by its data centers
and other operations.

"For sure there is no other industry today that is enabling" utilities to
adopt "cleaner energy generation" than data centers, said Lee Kestler, the
chief executive of the data center developer EdgeCore.

Though the data center industry has helped finance green energy, its own
use often eludes the very infrastructure it is helping to build.

Data centers, along with other users such as automated factories, 24-hour
sorting and delivery e-commerce warehouses, smelting plants, and nighttime
electric-vehicle charging, consume dense loads of electricity when neither
wind nor sunlight may be available.

To try to adapt, utilities have begun to build massive battery arrays and
employ other means of large-scale energy storage, such as pumped
hydropower, to collect reservoirs of excess renewable energy when it's
coursing through the grid and distribute it to users when it's not. SRP,
for instance, announced it would develop 1,000 megawatts of pumped hydro
storage by 2035, an approach that is effective, but difficult and costly
to build.

Battery storage, which is more readily deployable, is factoring into its
nearer-term plans. SRP said it would construct a 250-megawatt battery
facility to help cover the power load of a large new $2 billion data
center that is being built just outside Phoenix. OPPD and Dominion have
unveiled similar battery projects.

But battery systems remain tiny in comparison with overall consumption
and, for the time being, possess the capacity to supplement the grid for
only a few hours at a time.

"Current battery technology only stores power for 4-6 hours," the Dominion
spokesman, Aaron Ruby, wrote in an email. He cited that time limit as a
reason the utility "cannot rely solely on renewables."

"Offshore wind only produces power 40-50% of the time, solar only 20-25%,"
Ruby wrote. "If those are the only electricity sources we have, we can't
keep the power on."

The limits of renewables and the storage systems that could expand their
use mean fossil-fuel infrastructure is often necessary to fulfill at least
a portion of the power load from data centers and other industrial-size
customers.

"We'd like it to be clean," Kestler, EdgeCore's CEO, said of the energy
consumed by data centers. But "today you can't produce enough power
consistently with a renewable energy source."

As data centers boom, more utilities are struggling to keep up
The dislocation between the power that data centers drink and the
availability of renewable electricity to satiate it is fast becoming a
grid-size problem.

Data centers, which look like featureless warehouses, began to proliferate
a decade ago from a boom in cloud computing and storage led by tech giants
such as Amazon, Microsoft, and Google. Artificial intelligence is expected
to provide a new frontier of growth. Large investors, including
Blackstone, KKR, and Brookfield, have crowded in with plans for tens of
billions of dollars of new development.

In places where data centers have clustered, their power demands can
amount to or even exceed the loads of entire cities.

Amazon's planned data center footprint in northern Virginia alone most
likely amounts to more than 3 gigawatts, according to an estimate
calculated by Insider, more than the capacity of its home city of Seattle.

How more utilities will meet the challenge of catering to the industry is
still playing out.

APS, the other major utility serving Phoenix, is expected to release its
long-term energy strategy, known as an integrated resource plan, or IRP,
in November. In preliminary documents, it has identified data centers as
"the major source of load growth during 2023-2038."

Wendy Bridges, the economic development director for Goodyear, a city of
about 100,000 just west of Phoenix that is part of APS's service
territory, said she had seen the demand herself. Microsoft, which has two
large data center campuses in Goodyear, has communicated to her that it
would like to expand both, she said. Two other major center developers,
Stream and Vantage, also recently announced plans to grow their operations
in the municipality.

Bridges said data centers were attractive for the huge dollars spent on
the developments, which generate property tax revenue for local
government, and the construction jobs they provide.

"Definitely we have a few that we're talking to about their future plans,"
Bridges said. "When you talk about the amount of investments, that's when
things change because they're huge investments. They're billion-dollar
projects."

Jill Hanks, a spokeswoman for APS, told Insider the utility had received
"unprecedented requests for energy from prospective extra-large energy
users, mostly data centers, who need consistently high levels of energy
24/7/365."

It "would be the equivalent of adding roughly 560,000 Arizona homes over
the next eight years," Hanks said of the power requests.

The details of APS's plans for a "balanced strategy" to meet that load
growth will be answered in its November IRP, Hanks said.

"APS has still been hinting and projecting they're going to need a
significant amount of natural gas," Potter, the representative for the
Southwest Energy Efficiency Project, said.

Nevada's utility, NV Energy, has also seen an upswell in data center
development.

There are expectations that Reno, because of its relatively close
proximity to the Bay Area and that region's concentration of major
technology companies, could expand dramatically as a data center market —
part of a migration of data centers to new areas of the country.

"The state of Nevada is continuing to grow, and NV Energy has certainly
seen an increase in interest from data centers looking to come to the
Silver State," an NV Energy spokeswoman, Meghin Delaney, told Insider.

Kestler, the CEO of EdgeCore, said that in a decade he believed Reno could
rival Phoenix. Reno "is where the puck will go over the next 10 years,"
Kestler said.

EdgeCore in August announced plans to build a 216-megawatt data center in
the city.

NV Energy has a checkered record in how it has sought to deal with growth,
watchdogs say.

In March, the utility received state approval for a 440-megawatt expansion
of its Silverhawk Generating Station, a methane-powered plant 30 miles
outside Las Vegas. The project drew criticism because it was done by
filing an amendment to the utility's two-year-old integrated resource
plan, a step that Hunter Holman, an attorney for Western Resource
Advocates, which monitors the Nevada utility, said allowed it to make an
end run around the typical regulatory scrutiny that is paid to such
projects during an IRP process.

"It's not accurate to say amendments avoid regulatory scrutiny," Delaney,
the NV Energy spokeswoman said.

In 2021, NV Energy said it would shutter a coal plant, called the North
Valmy Generating Station, and replace it with solar and battery storage.
Recently, however, NV Energy said it would develop two methane plants in
place of the coal station at North Valmy and also scale down the size of
the solar and battery systems it is planning in northern Nevada.

"They're signaling that they want more gas," Holman said.

--
We live in a time where intelligent people are being silenced so that
stupid people won't be offended.

Durham Report: The FBI has an integrity problem. It has none.

No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Officially made Nancy Pelosi a two-time impeachment loser.

Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
fiasco, President Trump.

Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.

President Trump boosted the economy, reduced illegal invasions, appointed
dozens of judges and three SCOTUS justices.