Yes, absolutely. What do local residents get out of the data centers?
I remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
What they get out of not having the nuclear power plant is not getting unexplained cancer in 10 or 20 years.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
>Yes, absolutely. What do local residents get out of the data centers?
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
> Jobs in places where there usually aren't any ... a huge jolt of new economic activity.
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
my understanding is that there are cases where it is not as bad, but by and large - and through history (corporate tax break attractions) - this has not been the case, outcomes are very situational
This has been repeatedly debunked. Data centers provide temporary construction jobs, but those jobs are rarely local unless built in a major metropolitan area. Otherwise the data centers are almost completely automated. The Facebook data center near where I live is absolutely massive and employs about 150 people.
150 employees in a community of a few thousand or even 20 thousand is a massive boost to the local economy. Some places these things are being built have had declining populations for decades and haven't been new jobs in as many years as well.
That is numerically irrational. If a data center consumes enough water and power for a community of 20,000 what do those local residents get in return?
This is numerically simple. How much money do these data centers return to the local community and how much do they cost the local community. It’s a catastrophic net-negative for all parties except the owner and the construction crew.
Where in the US is there unlimited fresh water for municipal consumption? Does data center construction include the expenses of building out additional reservoirs?
> What do local residents get out of the data centers?
A lot:
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
Unfortunately, american idiocies in building datacenters are exported world wide as "memes" resulting in people thinking it's truth about datacenters, instead of being truth about broken politics and tax policies of USA
I struggle to understand why data centers are seen as a problem rather than an opportunity. Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
Markets based on supply and demand all work like this. Increased demand results in the market price increasing.
Electricity demand eventually becomes fuel demand, which has the same thing: more demand results in increased prices for fuel. Since fuels are broadly substitutable in electricity generation, all fuels increase in price when there's (significant) additional demand for electricity and that tends to increase prices of everything with a significant energy component.
When demand increases and supply remains static, prices go up.
Supply capacity improvements are incentivized by this price increase.
(If the incentive to improve supply capacity were present at the current price level, then those improvements would already be underway regardless of whether the world had ever seen a datacenter or not.)
The problem isn't one of scale, but one of paying for the increased infrastructure. It gets passed along to all customers, not only the ones that caused the increased demand.
Eventually you would expect a lower price, but that's long down the road. In the short run increased demand drives up the price.
Yes it's a huge job creation/economics boon as well. The data centers are injecting a lot of money into local economies (many of which have been shrinking) and providing skilled jobs.
The actual issue is that they don't. A 100 MW steel mill might employ ~1000 people and contribute ~$1 billion/year to the economy. A 100 MW data center doesn't need that many people even during construction, and its economic contributions are attributed to the location of corporate offices. As far as local people are concerned, any other use for the electricity would be more valuable than a remotely owned data center.
Well, it's arguably making things worse in rural Texas/Louisiana/etc., so I don't blame them for not wanting the data centers.
Understand that if the data center developers had not been so cartoonishly exploitative in their deal making in these municipalities nationwide, there really wouldn't be that much pushback. NIMBY stuff ultimately gets built all the time, usually because the money offered is just too good. Instead of using their massive amounts of capital, they struck backroom deals with local politicians to get tax credits, pass along infrastructure costs to other parties, and otherwise financially burden the community.
They had the money to go in and do all of this stuff without involving the public beyond the usual permitting processes; they just thought themselves too important to be burdened with having to spend money to make money. It's the "cult of the founder" mindset in action at the infrastructure policy level.
It is actually terrible at job creation. Data centers don't create many jobs at all, and you could argue through second and third order effects that they are job destroyers.
Data centers simply don't require very many people to operate.
Job destroyers where? Maybe in the glass towers of NYC and SF and elsewhere. Creating even a few dozen jobs in rural communities is a massive improvement and boost to the local economy.
Datacenters certainly provide many construction jobs during that phase of the project.
During normal operations though, you would have a handful of technicians, probably a facilities manager and frequent contractor visits, probably onsite security.
The facilities contractors may come from far away for maintenance projects, so maybe you help support local hospitality businesses.
Most of the highly paid work at the datacenter will happen remotely.
Every so often, there will be a hardware refresh, but you probably bring in people from elsewhere to do those, if it doesn't make sense to have the onsite techs do it little by little.
Certainly, there's a lot of equipment installed, and any locality with property tax on business equipment should get value from that. But otherwise, almost any other light industrial business would have more employees.
You say so. All I know is rent nearly doubled in my area as soon as construction on the data center began. If that's a what a boon to the economy looks like, I'm not interested.
Any municipality that tries to do this will not get a DC built, and the one next door will promise a 3 year tax abatement or other special privileges to get it instead. It's a race to the bottom thing.
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
Why wouldn’t they search for communities that would charge them the least?
And in doing so we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out imo. I could be wrong but open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of USDoE. Companies and individuals can operate them, plug into them like storage unit businesses.
It might open up a lot of opportunities to have that level of localized edge compute.
> Why wouldn’t they search for communities that would charge them the least?
They would and they should and that's efficient and good. The problem is corruption. If I go to a sandwich shop and tell them that $12 for a ham sandwich is too high, I can go from sandwich shop to sandwich shop, and eventually I will find one at a quality I can tolerate at a price I'm willing to pay (let's say $6.)
But with these corporations and billionaires, we assume that if we ask them to pay $12 for a ham sandwich, or even $6, they'll keep moving until they find a shop that will pay them $12 to take a sandwich. It's simply corruption. What they do is the equivalent of paying the cashier $3 to give them the sandwich and $12 from the till. They're shopping for the cashier that is willing to do it.
Because there are few jobs and they have to give up more than money. People live in rural areas for reasons and data centers are rather antithetical to them.
If you want to know details, listen to those people
Taxes would be great. If a giant new datacenter meant more money in the coffers for schools, roads, and everything else that is funded by local taxes, then that sounds like something that some places would really like to see.
But that's not how it rolls. At least around me, there instead seems to be a pattern of cities and counties of giving datacenter builds tax abatements of multiple decades in length.
And unlike something like a hospital or a steel mill or even a warehouse: After the local service industry and trades boom from the initial construction is over with, there's not much else coming out of these places. They don't provide very much in the form of long-term employment positions.
And beyond that, it's not like we know what the shape of information technology will be 30 years from now. It's certainly shaped very differently today than it was in 1996.
(And yeah, I know. If there were no tax incentives for datacenters in Location A, then they'd just build them in Location B instead. I don't have a problem with this at all, but some folks seem to find that result to be fundamentally unconscionable.)
Skill issue. This is just some of Loudoun County's report on the positive tax impact of data centers.
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
That's exactly what the newly elected Democrat congressmen are proposing. Right now, it's the opposite where they get tax breaks, reap resources (electricity, water), while providing zero benefits to the local communities (jobs or funding).
> Cities and counties can charge a high property tax to data centers and the residents can benefit.
My city has had issues with data centers since prior to the whole LLM craze.
The reason? They gave them tax breaks, and later on the town discovered they employ almost nobody. For the amount of land they took up, they give very little back to the community - both in taxes and in employment. It's understandable that residents would prefer the land be used for just about anything else. Even a pollution generating plant.
>I struggle to understand why data centers are seen as a problem rather than an opportunity.
Data centers require very little personnel to operate. It chugs a ton of water and electricity while polluting acoustically the surrounding area and basically bringing no jobs
Yep they can definitely provide public benefts to a community. Like in Quincy, Washington where data centers built over the last twenty years have [1]:
* Lowered property taxes by 70% by broadening the tax base
* Helped fund a new high school, hospital, fire station, water infrastructure improvements, and parks with taxes
* Directly created 900 new jobs, and created 4-6 times that number of indirect jobs (this is in a town of about 8,500 - so that's significant).
But the data centers have also created headaches for locals like concerns about air pollution, seizing private land under eminent domain to build high voltage power lines, and traffic [2].
So I agree data centers are a potential benefit to a community. But locals should be concerned and getting involved from the early stages to ensure their interests are protected. And vigorous debates, protests, etc should be viewed as part of a healthy democratic process.
> I struggle to understand why data centers are seen as a problem rather than an opportunity.
There are many reasons to oppose data centers, and not all of them have to do with data centers themselves. For instance: a lot of people don't want AI-driven changes to society tech leaders have decided foist on them. Data centers are the infrastructure for those changes, and a point of leverage against them. E.g. an agent can't take your job if your employer can't afford the tokens due to a data center shortage.
> Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
There's race-to-the-bottom competition as well as skill/experience asymmetry between the local governments and the data center builders. "If you don't give me a tax break, I'll just fine someone who will give it to me. Isn't it better to get a modest benefit than none at all?"
Here's an interesting coincidence. During 2010-2023, data centers growth was all in crypto farms, a truly ridiculous massive waste of energy. However, that growth played against the West. It diverted capital into ruinous tulip bubbles. It created an alternative to the Western-led financial system and trivialized bypassing sanctions. Yet it got fairly little mainstream coverage.
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
The fact that made up issues like water use or waste heat, complete with faked research papers, are being used to push the issue? It does make one suspicious.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.
I agree with all your points. As with the rest of the anti-AI movement, I think the key is in the likely consequences. Slowing down the buildout and regulating AI in the West won't affect it elsewhere. At best it's tilting at windmills, so I think it's reasonable to suspect the worst.
thats what it kinda feels like to me. My intuition tells me the average non tech person has a very worried view of the future due to AI-- I mean, what industry out there says their industry has a non zero chance of ending life as we know it! So that in mind, people look for reasons to shore up their concerns. Datacenters = AI, therefore they are bad for all these reasons-- Reasons which could be applied to many industries.
At first blush I'd say the difference in data center growth is significant between the two events, plus there's a much more massive capital inflow to AI datacenters, plus crypto has obvious other things to rail against before you get to noise and water impact.
I'd want to see a lot more evidence for an actual conspiracy than this.
I asked a chatbot to compare the energy expended in mining Bitcoin and on generative AI thus far, and it came up with 900 TWh for Bitcoin and 450 TWh for AI. Granted it might be biased in favor of AI.
Local politicians prices are factored into the data center prices. And it's brilliant, they trade people basic welfare to secure billionaires interests. What's wrong with that social contract?
Increased demand drives up prices under a fixed supply regime. Power is, in many places of the US, something approaching a fixed supply regime. This is not a physical requirement of the universe. It is a policy choice that we have made. I would argue that it is not the data centers driving up power prices, it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
Thank you for doing the work of keeping in the know on this sort of topic and notifying us all of the bill. I'll check it out and send a letter to my congressmen if it checks out.
If BAAJA means that data center companies can install jet engine gas turbines to power their needs, people are not going to be happy.
I agree the permitting process has hindered building in America, but I'm not convinced the current regimes in charge can craft legislation that actually helps people. America keeps voting for something new because the last attempt hasn't changed the status quo.
That doesn't say they're gonna put airlines jet engines in datacenters just that the company will make gas turbines for the AI boom, and gas turbines for power generation are everywhere. Nuclear power plants also use turbines.
Even if congress "fixed" this problem tomorrow it would still take years to build the increased capacity (as you note). Since we do essentially have a fixed supply regime the fast buildout of data centers we've seen over the last few years has indeed been the cause of increased power prices. I'll also add that several renewable power generation projects had been in the works and this administration killed them (even paying a lot of money to kill them).
NYT has an op-ed today encouraging BAAJA, but all the comments are ripping it for bias. Notably it seems to strip away protections for historic sites and takes away rights from Indian tribes. Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
I haven't read it, and I do support some level of expediency with grid buildout, but it sounds like it opens the door to ruining cultural landmarks, no prevention of abuse for fossil fuel purposes. Finally, and I mean this honestly: If the administration supports it, it probably is something worth pausing to consider.
There is too much protection for historic sites (most of which have trivial historical value) and Indian tribes have way too much power to extort money out of infrastructure projects.
> Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
There are plenty of other laws available to prevent various things from happening. The difference is that those need a government prosecutor to initiate a case rather than letting every member of the public file a nuisance lawsuit.
Which they would do in your "someone trying to run HVDC through the Grand Canyon" scenario and any other sufficiently egregious case, but not do when someone is just trying to build a boring wind farm on some boring land they own.
There is new data center project 30 miles outside my city that plans to build a 1000MW natural gas power plant and a 500MW biomass plant that will take millions of acres of forest to sustain (to quite the developer it will burn 350-500 truckloads of logs per day).
If this is an example of the kind of buildout we want to streamline, I say no thanks.
One of the perverse things about our current permitting regime is that it's often easier for a company to build a private natural gas power plant connected to their data center than it is for the local utility to build a new wind or solar farm. The former can often be done without any kind of discretionary permit at all, whereas the latter goes through a public process in which residents can complain and sue to block the project.
And both are much easier than getting permits for a high voltage transmission line to another region of the country where it might make more sense to build a wind or solar farm.
The majority of our power comes from 2 nuclear plants nearby, 8 hydro dams, and renewables. We also have one of the largest pumped storage hydro facilities a few miles away.
A biomass plant harvesting existing timber would only be better if the alternative were building a new coal plant.
This isn’t replacing anything though. We don’t need an extra 1.5GW, so if this project doesn’t go through the alternative will be that we continue moving towards more solar and wind.
Sounds like Tennessee Valley Authority, in which case 50% of your energy mix is fossil fuels and 0% of the biomass plant is fossil fuel and the incremental effect is potentially negative on atmospheric carbon.
It’s 46% and it’s irrelevant if it’s not replacing any existing power generation.
There is more excess data center power demand than there is capability to build plants over the next 10 years, so if this plant isn’t built the likely result is 1 less data center and not releasing carbon from 5.5 million tons of timber per year.
There are rural parts of Massachusetts that have run out of natural gas and electric delivery bandwidth. The simplest solution is non-grid connected power and heat generation. Doing this requires no real change in regulation since the power sources are stand alone. Local building codes are the only regulations.
isn't the simplest solution to upgrade the grid? What non-connected power do you envision that isn't natural gas and isn't so expensive you may as well connect it to the grid and upgrade the grid to handle it?
Solar PV and solar thermal. Batteries and insulation. Our population density is very low. More efficient heating would go a long way and the upgrades would help the local trades. Using less is the same as generating more. We could also go micro grid and turn our sewage treatment into anerobic digester and we are surrounded by wind farm. Our entire county would need a wind farm a third the size of cape wind 100k homes.
I’d upgrading the grid made sense I assume National Grid and Berkshire Gas would do it.
The main problem identified in this article is cost allocation, not rate of deployment. Data centers paid only 38% of the grid costs tied to their growth. Speeding up permitting would simply accelerate this subsidy to data centers, with households paying even more, sooner.
Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years. The problem is that capex deployed to serve data centers is being paid for by households, not that it cannot be deployed.
Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
The bill you cited would fix much of this, but it would do so via provisions forcing data centers to pay for the costs they cause, instead of forcing households to subsidize them.
If your point is “it’s policy,” fine. But the policy causing this is cost allocation, not permitting.
Your comment doesn’t engage with the article’s central finding at all: who pays.
In this case the other 62% is only $5.1 billion, which averages out to about $15 per person across the US. Since this is reflected in wholesale electricity prices I assume it is even enough that after accounting for unequal impact, it still isn't that high. It seems like a problem, but not a major one.
Well, since it’s “only” $5.1 billion, the trillion dollar valued companies should have no problem paying costs in full rather than seeking subsidies from the hapless taxpayers.
> Data centers paid only 38% of the grid costs tied to their growth.
Data centers pay for electricity under the tariffs utilities charge them. To the extent their demand increases wholesale electricity prices, it's the normal consequence of additional demand competing for constrained supply. In no other market is it standard for the person outbidding to also pay for continuing to provide the service to the person who was outbid. The only reason there is much incremental grid cost is because utilities are legally required to continue serving their residential customers. It seems extremely reasonable for residences to share in some of these costs when getting electricity at a significant discount from market price.
The notion that 'households' are paying for data center electricity is just not what is happening. Maybe residences should get discounted electricity, but again this is a policy question and I'm not sure the best use of the marginal federal dollar.
> Transmission investment driven by new demand grew 17x in five years.
Investment is not transmission built, I don't see how this disproves the well-documented countrywide transmission delays. If anything, it is an indication that we are transmission bottlenecked.
Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built (possibly built with public money as a public utility). Should that additional cost of new generation be shared equally by the datacenter and the community? IMO it should be paid by the datacenter.
How fine grained do you want this to be? The point of cost allocation is that grid upgrades and additional capacity overall benefit everyone - basically that electricity exists as a reliable and relatively cheap commodity to all comers. Especially industrial ones. It more or less enables the modern world.
If you're the last house on your block to upgrade your home service to 200A in order to charge an EV, should you be cost allocated 100% of the distribution transformer upgrade that happened to be needed to service you? After all your neighbors were doing just fine until you wanted more capacity.
How about the new subdivision of 200 homes that requires a regional transmission line upgrade? Does that developer (and thus new - typically younger - homeowners) need to pay for the entire upgrade or should that be split over all the ratepayers? Utilities don't tend to upgrade lines to meet exact current demand - that upgrade is going to be spec'ed to be good for decades of additional growth so the next subdivision next door is going to be effectively getting a free ride.
I agree cost allocation needs to be fair. Part of that is the "last comer" is not the one to bear all the costs of needed upgrades. Otherwise things like rapid EV chargers in office parking lots would never get built.
Cost of generation kind of takes care of itself in a sane market. That's just called a power bill. If it's being priced in a way where one user subsidizes another that simply needs to be fixed. Typically those "subsidies" are going in the other direction though as constant 24x7x365 usage is much cheaper to service than rare correlated demand spikes residential users give you.
The transmission grid is a much harder thing to cost allocate fairly.
Except people are building datacenters that don't provide any marginal utility or jobs to locals, and asking small local communities to increase their collective power cost for no local benefit.
It's unsurprising that those communities see and reject this as a bad deal, that's politics working as intended.
> Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built
Much of today's higher prices are attributable to the high cost of the permitting process. If you want the government to fix something, have them fix that.
Moreover, renewable generation isn't actually more expensive. LCoE for solar and wind is now something like $0.06/kWh, which is better than fossil fuels. That doesn't count the storage you'd need to use them for 100% of the grid, but we're nowhere near using them for 100% of the grid so that isn't relevant yet, and using them for e.g. 50% of the grid doesn't really require storage. Moreover, you can get a large storage sink "for free" by electrifying transportation, because then you have millions of large batteries that you can charge when cheap generation is available and let them stay at 60% rather than 90% when it isn't.
I love renewable energy as much as anyone I know, but they have some major and well-known problems.
One problem is that they only produce when the sun is shining, or the wind is blowing, etc…. These can be ameliorated with batteries, but that still takes a significant additional expense.
The bigger problem is location. They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power. Which means you need transmission lines. And those take as long or longer to permit and build as do nuclear or combined-cycle natural gas power plants. These things tend to be delivered in terms of 120 months, or more. Not 120 days, like the datacenter builders want.
There are no quick and easy solutions here. Sure, you can truck in jet engines to use them as generators, but then you have to fuel them, you have to deal with the exhaust and added pollution, you have to deal with the noise, you have to deal with all the extra water you’re going to need to run them, you have to deal with added risk of toxic spills due to all the extra fuel you have to have on-site, you have to deal with added risk of fires because of that fuel, you have to deal with the increased heat island effects of running those engines, etc….
And datacenter builders want to externalize all their costs. This is the one single fundamental problem with them and all other big businesses.
If we make the datacenter builders fully internalize all of their costs, then we won’t have these problems.
> One problem is that they only produce when the sun is shining, or the wind is blowing, etc.
This is the irrelevant part when they're not the majority of the grid. We already have peaker plants to handle the differences in load throughout the day. They currently mostly run during the day and the early evening. You build a bunch of new solar and instead they'd mostly run at night, because the new solar takes the existing daytime demand plus the new daytime demand and the existing peaker plants take the new nighttime demand.
> They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power.
This is not really true in the US. Solar doesn't work very well in Alaska because it's too far north, but it's fine basically anywhere south of the Canadian border, which is where essentially the entire US population actually lives. The average wind speed in every US state is enough to run a wind turbine.
There are some locations that are better than others, but better enough to build a thousand mile transmission line? That's almost a coin flip even before you consider what a liability it is to centralize power into a big exposed long-distance transmission line instead of just distributing the generation everywhere.
> Sure, you can truck in jet engines to use them as generators, but then you have to fuel them...
As a temporary measure, that's the trade off against short-term higher electric bills. As a permanent measure they're rubbish, but they're not needed as a permanent measure anyway. And the faster you build something else, the sooner they go away.
> And datacenter builders want to externalize all their costs.
That's not what that means. You can't internalize demand for a commodity. All you can do is increase supply to meet the new demand.
Not true. We are already seeing duck curve problems where the price should go negative, unless the solar and wind farms are told to curtail.
They need a buffer to be able to fully and properly contribute to the grid. Without a buffer, solar and wind farms are already causing some problems. They can’t really grow much beyond where they are today, without adding a buffer. Sad, but true.
T. Boone Pickens is pushing wind as hard as he possibly can out in the Texas panhandle, and it’s getting harder and harder for him to do that, in part because much of that is done without a buffer. Granted, he’s also having to fight transmission line problems.
For solar to be effective from the perspective of the grid, it needs to be installed in a place that gets enough average sunshine. And that latitude line is way lower than the border between Canada and the US. You also have to take weather and climate patterns into account, because if you’re below that line but you get too much average cloud cover, then you’re still not cost-effective enough.
The only places where you can install solar panels without regards for those kinds of constraints, is where people don’t care how many panels they have to install, in order to get the amount of average power that they need. If you over-provision by enough, then you can install useful amounts of solar in otherwise considerably less than ideal sites. But then you’re also willing to pay a price and space premium that no grid operator would be willing to pay. Many homeowners might fit into this category.
And many places where you would want to install solar panels close to the consumers so that you can avoid long transmission lines, that land just isn’t available. Or not available at a price that any grid operator would be willing to pay.
> We are already seeing duck curve problems where the price should go negative, unless the solar and wind farms are told to curtail.
This happens with solar in the summer because it generates more in the summer, and then if you build enough for the other seasons you have "too much" on many days in the summer. But storage doesn't help much for that anyway because you'd need storage that lets you store power from July to use in January.
And "too much" isn't a problem when it only happens a minority of the time. You'll have critics complaining if it happens at all, but that doesn't mean it's a real problem.
The real problem is "not enough", which is the thing that doesn't get really bad until you're trying to run the majority of the grid on it. If it's only half then the other half is reliable power sources, some of those are still peaker plants and then you have the option to run them during the day on the days when it's cloudy, renewable generation is sometimes low but it's hardly ever actually zero, and by that point you're at something like 80% coverage on the lowest generation days and can get the remaining 20% through variable pricing.
> For solar to be effective from the perspective of the grid, it needs to be installed in a place that gets enough average sunshine.
A solar panel generates ~50% more in Arizona (on the border with Mexico) than New York (on the border with Canada). That isn't totally negligible but but it's not so large as to make it unworkable.
> Many homeowners might fit into this category.
Naturally, because it solves two problems at once. First, no land cost because you're using what would otherwise be an empty roof. Second, no transmission cost because the power is consumed where it's generated.
This is an easy win for homeowners because even at the less advantageous latitudes, they'd be paying ~$0.10/kWh for their own solar while the New York power company is asking 28.6.
And there are still plenty of not just homes but also commercial buildings that don't have solar on their roof. Give every Walmart and Home Depot an incentive to install a support scaffold full of panels over every parking lot. Why pay for a lot of land when we haven't even taken the easy wins yet?
> The real problem is "not enough", which is the thing that doesn't get really bad until you're trying to run the majority of the grid on it. If it's only half then the other half is reliable power sources, some of those are still peaker plants and then you have the option to run them during the day on the days when it's cloudy, renewable generation is sometimes low but it's hardly ever actually zero, and by that point you're at something like 80% coverage on the lowest generation days and can get the remaining 20% through variable pricing.
You're not thinking like a grid operator. They need to pay to keep those peaker plants operational, even if they're not being used. The more peaker plants that have to be kept offline for more of the time, the less attractive it is to buy the power from the solar or wind plants.
Until solar and wind can generate reliable amounts of power, day-in and day-out, 365 days out of the year, you will always need those peaker plants to take up the slack. But those renewable sources will never be able to do that. The best they can hope for is to overgenerate during the times that they are capable of doing so, and storing the excess somehow in another medium. That could be batteries, flywheels, pumped hydro, or whatever. But they need that buffer if they are going to be a larger part of the grid.
> A solar panel generates around two thirds as much in New York (on the border with Canada) as in Arizona (on the border with Mexico). That isn't totally negligible but it's not so large as to make it unworkable.
It might not be enough to keep homeowners from installing solar panels in those kinds of environments, but it's definitely enough to keep large-scale power generation facilities from building there.
> And there are still plenty of not just homes but also commercial buildings that don't have solar on their roof. Give every Walmart and Home Depot an incentive to install a support scaffold full of panels over every parking lot. Why pay for a lot of land when we haven't even taken the easy wins yet?
I agree that parking lots and roofs of buildings are targets that look easy. But the incentives just aren't there. It's still just way too expensive, for not nearly enough ROI to make it happen. And I just don't see incentives of that scale coming, not even with the New Democrats.
In theory, I don't disagree with you with regards to where we should be going and what we should be doing.
But in practice, there is a huge difference between theory and practice.
> They need to pay to keep those peaker plants operational, even if they're not being used.
But they are being used, every night. And then you can also use them during the day on the minority of days when it's cloudy.
> It might not be enough to keep homeowners from installing solar panels in those kinds of environments, but it's definitely enough to keep large-scale power generation facilities from building there.
You could easily confuse that with a population density map of the US. The main tell is that the dots are on the outskirts of the major cities rather than in them.
> It's still just way too expensive, for not nearly enough ROI to make it happen.
It kind of is happening. Nearly 100% of net new generation capacity in the US is renewables, with some new natural gas barely offsetting the gradual death of coal to net to zero.
> But they are being used, every night. And then you can also use them during the day on the minority of days when it's cloudy.
But they're not being used every night. Night load is mostly carried by combined-cycle, nuclear and wind. Peaker plants are expensive to operate compared to combined-cycle, so they will get turned off as soon as possible, so that the grid relies on less expensive sources for base load operations.
It's basically just a whole bunch of single-colored dots on a map. That doesn't tell you when a given solar farm was installed, just by looking at it. And it doesn't tell you a whole lot about the capacity. If you zoom in, you can see that most of those dots are under 50MW in size. When I zoomed in and looked at a sample, most of them seemed to be single-digit MW ratings. What we really need to count is capacity, not number of dots.
Unfortunately, this page doesn't actually give us a lot of detail. But let's look at the detail it does give us. First off, let's look at the ten most recent solar farm installations that they show and where they are:
Five are in Texas, in the counties of Yoakum, Ector, Milam, Kaufman, and Upton. Two are in Illinois, in the counties of Pulaski and Jefferson. One is in Arizona. One is in Colorado. One is in Michigan. Of all of those, the ones in Colorado and Michigan are at about 40 degrees north latitude or higher, so that would qualify as "in the north". Pulaski and Jefferson counties in Illinois are below 40 degrees north latitude, so I count them "in the south".
Okay, so now let's look at where the ten biggest solar farms are:
Three are in Texas, in the counties of Jack, Swisher, and Webb. Two are in Arizona, in the counties of Maricopa, and La Paz. One is in Nevada. One is in California. One is in Illinois. One is in Ohio. And one is in Utah. Of those, the three in Illinois, Ohio, and Utah are all about 40 degrees north latitude, so they can be considered to be "in the north".
So, while we don't have the full dataset available to us to show the actual distribution of when and where grid-scale solar farms are being installed, the tiny amount of data we do have from this website clearly shows that the majority of the new grid-scale solar farms that are installed or being installed are going into the South. Texas alone has 50% of the newest solar farm installations, according to that list.
According to EIA, Texas alone has 40% of the planned new solar farm installations (see https://www.eia.gov/TODAYinENERGY/detail.php?id=67205), out of the 43.4GW of planned new solar farm capacity to be installed across the country. That would give us another ~17.36GW of solar to be added in Texas alone.
There's also 24GW of battery capacity to be added this year, of which 53% is planned for Texas alone (12.9GW), and 80% of the total across just three states: Texas, California, and Arizona. Solar is happening, yes. But so are batteries.
All of which is in line with what I said before.
But all that said, we should be looking at total average amounts of sunshine, and not north versus south. Anything at or above about an average of five hours of sunshine per day is considered "sunny", and the order here is Arizona being the sunniest, followed by Utah, Colorado, and Texas. Illinois, Michigan, and Ohio are in the "low-sun" group.
By that criteria, of the ten largest solar farms, only two of ten are in low-sun states: Illinois and Ohio. For share of total solar farm capacity of the top ten, that would be about 20% (1,170 of 5,786 MW).
The lack of cheap reliable power is actively hurting the entire economy. This stems primarily from the fact the US coasted on the previous generation's (no pun intended) investments in the power grid. At some point you run out of your great grandparents investments into the future. Inertia doesn't last forever.
The billed price per kWh includes the cost of both generation and distribution. Residential customers pay higher distribution costs per kWh because the same mile of residential power lines only carries kW of power instead of MW without correspondingly consuming thousands of times less land or requiring thousands of times less maintenance.
Meanwhile the thing they're outbidding you on is generation.
So you’re confirming that, if distribution costs go up, consumers pay a greater share of that, IN ADDITION to the generation costs we’re bidding on in the market?
Also I’m sharing 99.99% of the distribution costs with my neighbors.
> So you’re confirming that, if distribution costs go up, consumers pay a greater share of that
Completely the opposite. Consumers are charged more for distribution because distribution to consumers costs more per kWh to build and maintain. Distribution to sites with large consumption has a much lower cost per kWh, which those sites are already paying, which is why they pay less per kWh even with that cost already included.
> Also I’m sharing 99.99% of the distribution costs with my neighbors.
Your neighbors who are also consuming an average of ~1kW, so the ~20 houses on your mile-long suburban street are consuming ~20kW in total. A 100MW+ site which is a mile from the substation or power plant has distribution costs that are thousands of times lower per kWh, will generally be located close to them for exactly that reason, and may also be sharing the same lines with other neighboring commercial/industrial sites.
Residential customers aren’t getting power below market prices. By definition, they are paying market prices for that power.
It’s the market that is being distorted by all the additional datacenters coming online and wanting to suck down all the power that the entire rest of the country needs.
That market distortion is what needs to be fixed. Datacenter builders need to cover ALL the costs of ALL of the additional infrastructure needed to support their operation, plus the standard daily OpEx once all the infrastructure is in place.
And they need to comply with all national and international laws regarding their operation, including adherence to Dark Sky rules for lighting in-site, ensuring that they don’t cause any additional noise for any of the surrounding area, ensuring that they don’t cause any problems with water pollution, and so much more.
> Data centers paid only 38% of the grid costs tied to their growth.
That's not what the article is describing.
What's happening is that price is used suppress demand during the period between when demand increases and when supply responds. That isn't the cost of increasing supply, it's the cost of not having it already. Which is why you want to cause the period between the one and the other to be as short as possible.
> Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years.
The claim that supply is fixed is "false" in the sense that it isn't literally impossible to add new supply. It is, however, much more difficult than it could or should be, which makes the investment cost more and take longer than it otherwise would, and in the meantime people are paying higher prices.
Moreover, "17x" doesn't really mean anything when the base rate started so close to zero. We've been deterring these investments for far too long.
> Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
New York and New England are among the hardest places in the country to build energy infrastructure which is why the price of electricity there is already high and then you don't get increased demand in the place with high prices since the high prices shift the demand to other locations.
That's not a useful strategy if you want lower prices since the prices there are only not going up there because they're already up there.
> Your comment doesn’t engage with the article’s central finding at all: who pays.
We need to distinguish two things here.
The first is, who pays for the actual long-term costs of increasing generation. But that's easy, because that cost isn't actually that high. It's equivalent to the normal pre-existing price of electricity. It might even be less because e.g. solar has gotten pretty cheap and to the extent that you add that, the average generation cost would even go down.
The second is, what happens during the period between when the new demand comes online and when the new generation comes online? But having new data centers "pay" that to keep the short-term price of electricity from going up is not possible, because having the short-term price go up is the thing that suppresses the short-term demand to keep it from exceeding supply. If the price didn't go up in the interim then the demand at the lower price would exceed available supply.
Which brings us back to, what you need is to bring the new generation online as quickly as possible.
> Data centers paid only 38% of the grid costs tied to their growth.
This is the same as with roads. Roads are subsidized for corporations because damage is proportional to 4th power of weight (upto 9th power of weight on poor roads).
Almost all corporations in US are 'successful' on the backs of being subsidized by consumers in many ways.
> Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
There's plenty of reason to leave the problem in place. The current regime is corrupt, and energy scarcity benefits entrenched fossil fuel players who are cozy with the administration.
Congress has up until now given its endorsement to all of this. Will a new Congress care? Time will tell.
It could be both. I think people reasonably state it's data centers driving up prices more than other things because we've power as a mostly fixed supply in many places in the US for a while, and the recent increase in lower income/rural areas had correlated all with data center expansion as opposed to other things like EV adoption, etc...
> it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
The issue isn't how difficult it is to provision new power, it's that no matter how cheap it will be and how unregulated it will be, datacenters will look to 1) skirt environmental law, and 2) arbitrage cheaper areas that end up being forced to split the price to increase production between the dcs and the locals.
Very large consumers should be required to pay for new production when it's obvious that only them benefit from it, there's absolutely no reason to split the bill with the locals, especially when datacenter have close to zero local economic benefits.
Aren't most markets fixed supply, at least in the short to medium term? Outside of something like software (where you can just copy paste code and hardware is usually not the limiting factor), there is a ramp-up period between an increased demand and an increased supply. No matter how you want to spin it, a huge increase in energy demand is going to have an increased in energy costs for at least months to years.
If the cost of capital improvements is divvy'd up among ratepayers, and a huge amount of new generation needs to be built out and amortized over a large period of time, and the datacenters pay less per kWh than the residential consumers, residential rates go up regardless.
BAAJA is just massive deregulation of an environmentally unfriendly industry. Instead of eliminating the few safeguards communities have to protect their local environment and giving corporations the ability to circumvent public health concerns, we should move towards more sustainable energy and cease investing in fossil fuel infrastructure. All BAAJA does is transfer authority from local governments/communities to private developers and corporate interests.
And do we really think that giving corporations more power to make more money is somehow going to lessen the cost for consumers? What are your grocery prices like right now?
Exactly. Nobody ever wants to ask the next question.
Why can't these rural areas just let this outside money build power infra at the drop of a hat?
Rules.
Who's rules?
Well it wasn't the town in the middle of nowhere that got screwed when steel mill closed or the glass cookware plant packed up for Vietnam who wrote the rules that's for sure...
False analogy. Data centers are consumers not producers. They compete with humans for infrastructure capacity. Companies need to foot the bill for improving infrastructure not humans
I’m lucky enough (/s) to have a regulated, for-profit power company as the only option for electricity. They made $430M in profit this past year and are asking the corporation commission to raise our rates “only” 14% this year. Meanwhile, the cost of electricity they pay to purchase from residential solar is approaching zero.
I find their methodology misleading, though. They're basically taking the cost of transmission infrastructure upgrades and then assigning the cost of those upgrades proportional to peak energy demand of the customer base, not the cost of the infrastructure upgrade.
So if, for example, they estimate that residential customer demand will grow by 10%, then they suggest residential customers should only be paying for 10% of transmission infrastructure upgrades.
That's not how infrastructure upgrades work, though. Connecting 100,000 new residential addresses and areas can cost more than a couple data centers that are close to the power station.
The problem is they don't have access to, or at least they didn't look very hard, to find the actual data about transmission line upgrades and how much data centers actually pay to get connected. Contrary to what I see in a lot of the comments here, big customers do actually get billed for their infrastructure upgrade costs after utilities do their analyses. This paper is ignoring the utilities' analyses and substitutes their own highly simplified proportional-to-peak-demand estimates, and that's how they get their headline number.
One very surprising discovery was that they show data center construction incentives to actually be a good deal:
> State incentives for data centers have provided returns on the investments, if inconsistently, the researchers found. Some states, such as California, reaped $180 in worker income for every dollar spent, while Virginia increased income $2 for every dollar invested. The researchers determined that the presence of an existing, qualified workforce was a stronger indicator of high returns than the amount of incentive spending.
That's not what I expected to read.
This is a topic where details basically don't matter for public opinion, though, so I'm not sure it matters. It aligns with what people
I appreciate this if only because most people seem to take things at face value rather than really thinking about the methodology and whether it makes sense or is potentially flawed.
Quite the contrary. There’s a lot of misinformation about data centers, that I think in a lot of ways is a result of people’s fear of AI. It also doesn’t help that data centers have opened a lot of eyes to how poor our utility infrastructure is and how corrupt many local governments are.
A lot of the concerns people seem to have about datacenters is largely solved by local governments creating and enforcing sensible building codes, tax policy, and utility regulation. The uncomfortable truth, however, is that the citizens themselves hold the greatest responsibility for not being engaged in their communities, educating themselves and holding their elected officials accountable.
the amount of power needed by datacenters is nothing compared to generation gap. These stories cover up the root cause: in nearly every market, no baseload generation has been added for 15+ years, and is generally declining.
Rates aren't going up because of datacenters. They are going up because no investment has been made for more than 15 years, and we have been offsetting the "crunch" with creative workarounds.
The good news is that plenty of people and companies have been working the problem of upgrading the US electrical grid for more than a decade before this, and all it would take is a small amount of permitting reform and a fraction of the capital deployed for the AI buildout. Plus you get reduced CO2 emissions for free, especially if we wait for the next Congress to do permitting reform.
All such headlines of this formula “x phenomenon disproportionately affects poor people” always shy away from naming the real problem.
The real problem has nothing to do with datacenters. The problem is that in our capitalist society, money equals political influence. So, these negative externalities get put on the people least able to buy political influence. It’s so obvious it’s almost embarrassing to say it out loud, but that’s what it is.
So don’t whine about data centers unless you are seriously ready to do something about capitalism. I’ll be right there with you when you get to that point.
My power bill has gone up significantly (in Chicago) because we have a really good grid, and relatively cheap power production costs due to investments our tax dollars have gone towards (fun fact 25% of illinois power comes from nuclear, the highest in the country).
Now, I and all my neighbors are being financially punished for these investments, because so many data centers are being built out due to this infrastructure. I have friends who are engineers at the power distribution company who are denied raises and putting in 80+ hour weeks without over time.
I say all this, not to diminish the low income Americans bearing the cost of these data centers, but to point out that its all of us. Its insane how few people are actually benefiting from this, and how simply taxing these data centers appropriately would fix it.
I am not familiar with the actual contracts these companies have, nor the tax policies and breaks they are getting, but its clear to me they are not paying enough. I wouldn't be surprised if these servers are over clocked to hell and back simply because the water and power is cheap.
Data centers account for something like 5% of the increase in electricity costs (Rana, Kaps Wharton/Harvard study).
Of course, the real reason energy prices are rising is that regulatory complexity makes it extraordinarily expensive and risky to build new generation, or even to upgrade transmission. Did you know that an upgrade across an already existing and built out right of way --- just making smaller wires bigger --- requires a full NEPA review?
Residents should have voted better. If you've got a politician who isnt making DCs pay for their utilities thats on your poor choice of politician. Its a basic thing that has been solved almost everywhere already. I dont want to go on another 'i hate farmers rant' but seriously these people kick themselves in the nuts repeatedly and then have the gall to blame people in the city who were trying to get these policies implemented.
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[ 3.0 ms ] story [ 877 ms ] threadI remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
my understanding is that there are cases where it is not as bad, but by and large - and through history (corporate tax break attractions) - this has not been the case, outcomes are very situational
This is numerically simple. How much money do these data centers return to the local community and how much do they cost the local community. It’s a catastrophic net-negative for all parties except the owner and the construction crew.
Source? We live in America and, except for some areas like the southwest, there are reservoirs everywhere with loads of water.
A lot:
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
https://www.loudoun.gov/6409/Tax-Revenues-County-Budget
Not all buildings are built or powered the same way in all countries based on the weather of their location.
American lenses about American Datacenters will be about whats happening in America, not other places.
Markets based on supply and demand all work like this. Increased demand results in the market price increasing.
Electricity demand eventually becomes fuel demand, which has the same thing: more demand results in increased prices for fuel. Since fuels are broadly substitutable in electricity generation, all fuels increase in price when there's (significant) additional demand for electricity and that tends to increase prices of everything with a significant energy component.
Supply capacity improvements are incentivized by this price increase.
(If the incentive to improve supply capacity were present at the current price level, then those improvements would already be underway regardless of whether the world had ever seen a datacenter or not.)
Eventually you would expect a lower price, but that's long down the road. In the short run increased demand drives up the price.
Well, that's not the plan. The plan is massive tax cut, infrastructure built with public money and... that's it!
Understand that if the data center developers had not been so cartoonishly exploitative in their deal making in these municipalities nationwide, there really wouldn't be that much pushback. NIMBY stuff ultimately gets built all the time, usually because the money offered is just too good. Instead of using their massive amounts of capital, they struck backroom deals with local politicians to get tax credits, pass along infrastructure costs to other parties, and otherwise financially burden the community.
They had the money to go in and do all of this stuff without involving the public beyond the usual permitting processes; they just thought themselves too important to be burdened with having to spend money to make money. It's the "cult of the founder" mindset in action at the infrastructure policy level.
Data centers simply don't require very many people to operate.
During normal operations though, you would have a handful of technicians, probably a facilities manager and frequent contractor visits, probably onsite security.
The facilities contractors may come from far away for maintenance projects, so maybe you help support local hospitality businesses.
Most of the highly paid work at the datacenter will happen remotely.
Every so often, there will be a hardware refresh, but you probably bring in people from elsewhere to do those, if it doesn't make sense to have the onsite techs do it little by little.
Certainly, there's a lot of equipment installed, and any locality with property tax on business equipment should get value from that. But otherwise, almost any other light industrial business would have more employees.
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
And in doing so we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out imo. I could be wrong but open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of USDoE. Companies and individuals can operate them, plug into them like storage unit businesses.
It might open up a lot of opportunities to have that level of localized edge compute.
They would and they should and that's efficient and good. The problem is corruption. If I go to a sandwich shop and tell them that $12 for a ham sandwich is too high, I can go from sandwich shop to sandwich shop, and eventually I will find one at a quality I can tolerate at a price I'm willing to pay (let's say $6.)
But with these corporations and billionaires, we assume that if we ask them to pay $12 for a ham sandwich, or even $6, they'll keep moving until they find a shop that will pay them $12 to take a sandwich. It's simply corruption. What they do is the equivalent of paying the cashier $3 to give them the sandwich and $12 from the till. They're shopping for the cashier that is willing to do it.
Because there are few jobs and they have to give up more than money. People live in rural areas for reasons and data centers are rather antithetical to them.
If you want to know details, listen to those people
It's about more than money. People live in rural areas for reasons and data centers are rather antithetical to them.
If you want to know details, listen to those people
But that's not how it rolls. At least around me, there instead seems to be a pattern of cities and counties of giving datacenter builds tax abatements of multiple decades in length.
And unlike something like a hospital or a steel mill or even a warehouse: After the local service industry and trades boom from the initial construction is over with, there's not much else coming out of these places. They don't provide very much in the form of long-term employment positions.
And beyond that, it's not like we know what the shape of information technology will be 30 years from now. It's certainly shaped very differently today than it was in 1996.
(And yeah, I know. If there were no tax incentives for datacenters in Location A, then they'd just build them in Location B instead. I don't have a problem with this at all, but some folks seem to find that result to be fundamentally unconscionable.)
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
https://www.loudoun.gov/6409/Tax-Revenues-County-Budget
https://www.nbc4i.com/news/local-news/new-albany/new-albany-...
My city has had issues with data centers since prior to the whole LLM craze.
The reason? They gave them tax breaks, and later on the town discovered they employ almost nobody. For the amount of land they took up, they give very little back to the community - both in taxes and in employment. It's understandable that residents would prefer the land be used for just about anything else. Even a pollution generating plant.
Data centers require very little personnel to operate. It chugs a ton of water and electricity while polluting acoustically the surrounding area and basically bringing no jobs
* Lowered property taxes by 70% by broadening the tax base
* Helped fund a new high school, hospital, fire station, water infrastructure improvements, and parks with taxes
* Directly created 900 new jobs, and created 4-6 times that number of indirect jobs (this is in a town of about 8,500 - so that's significant).
But the data centers have also created headaches for locals like concerns about air pollution, seizing private land under eminent domain to build high voltage power lines, and traffic [2].
So I agree data centers are a potential benefit to a community. But locals should be concerned and getting involved from the early stages to ensure their interests are protected. And vigorous debates, protests, etc should be viewed as part of a healthy democratic process.
[1] https://dor.wa.gov/sites/default/files/2025-09/AdoptedTabled...
[2] https://www.spokesman.com/stories/2026/jul/26/where-agricult...
There are many reasons to oppose data centers, and not all of them have to do with data centers themselves. For instance: a lot of people don't want AI-driven changes to society tech leaders have decided foist on them. Data centers are the infrastructure for those changes, and a point of leverage against them. E.g. an agent can't take your job if your employer can't afford the tokens due to a data center shortage.
> Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
There's race-to-the-bottom competition as well as skill/experience asymmetry between the local governments and the data center builders. "If you don't give me a tax break, I'll just fine someone who will give it to me. Isn't it better to get a modest benefit than none at all?"
~~bribing~~ lobbying also can do away with the extra money that they should pay
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.
I'd want to see a lot more evidence for an actual conspiracy than this.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
I agree the permitting process has hindered building in America, but I'm not convinced the current regimes in charge can craft legislation that actually helps people. America keeps voting for something new because the last attempt hasn't changed the status quo.
You mean aircraft jet engines? Is there a source for this?
https://arstechnica.com/gadgets/2026/10/united-airlines-ceo-...
but generally loud gas turbines (don't have to have jet engine lineage)
Even if congress "fixed" this problem tomorrow it would still take years to build the increased capacity (as you note). Since we do essentially have a fixed supply regime the fast buildout of data centers we've seen over the last few years has indeed been the cause of increased power prices. I'll also add that several renewable power generation projects had been in the works and this administration killed them (even paying a lot of money to kill them).
I haven't read it, and I do support some level of expediency with grid buildout, but it sounds like it opens the door to ruining cultural landmarks, no prevention of abuse for fossil fuel purposes. Finally, and I mean this honestly: If the administration supports it, it probably is something worth pausing to consider.
They have too much power? On their land?
Separately, Here is their objections for anyone interested
https://narf.org/baaja-reform-bill/
What if they only ran the transmission lines behind their eyesore casinos?
There are plenty of other laws available to prevent various things from happening. The difference is that those need a government prosecutor to initiate a case rather than letting every member of the public file a nuisance lawsuit.
Which they would do in your "someone trying to run HVDC through the Grand Canyon" scenario and any other sufficiently egregious case, but not do when someone is just trying to build a boring wind farm on some boring land they own.
https://nicholasinstitute.duke.edu/publications/rethinking-l...
If this is an example of the kind of buildout we want to streamline, I say no thanks.
And both are much easier than getting permits for a high voltage transmission line to another region of the country where it might make more sense to build a wind or solar farm.
A biomass plant harvesting existing timber would only be better if the alternative were building a new coal plant.
This isn’t replacing anything though. We don’t need an extra 1.5GW, so if this project doesn’t go through the alternative will be that we continue moving towards more solar and wind.
There is more excess data center power demand than there is capability to build plants over the next 10 years, so if this plant isn’t built the likely result is 1 less data center and not releasing carbon from 5.5 million tons of timber per year.
I’d upgrading the grid made sense I assume National Grid and Berkshire Gas would do it.
On paper, sure.
In reality they'd probably have to secede from the state to do it.
Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years. The problem is that capex deployed to serve data centers is being paid for by households, not that it cannot be deployed.
Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
The bill you cited would fix much of this, but it would do so via provisions forcing data centers to pay for the costs they cause, instead of forcing households to subsidize them.
If your point is “it’s policy,” fine. But the policy causing this is cost allocation, not permitting.
Your comment doesn’t engage with the article’s central finding at all: who pays.
Data centers pay for electricity under the tariffs utilities charge them. To the extent their demand increases wholesale electricity prices, it's the normal consequence of additional demand competing for constrained supply. In no other market is it standard for the person outbidding to also pay for continuing to provide the service to the person who was outbid. The only reason there is much incremental grid cost is because utilities are legally required to continue serving their residential customers. It seems extremely reasonable for residences to share in some of these costs when getting electricity at a significant discount from market price.
The notion that 'households' are paying for data center electricity is just not what is happening. Maybe residences should get discounted electricity, but again this is a policy question and I'm not sure the best use of the marginal federal dollar.
> Transmission investment driven by new demand grew 17x in five years.
Investment is not transmission built, I don't see how this disproves the well-documented countrywide transmission delays. If anything, it is an indication that we are transmission bottlenecked.
If you're the last house on your block to upgrade your home service to 200A in order to charge an EV, should you be cost allocated 100% of the distribution transformer upgrade that happened to be needed to service you? After all your neighbors were doing just fine until you wanted more capacity.
How about the new subdivision of 200 homes that requires a regional transmission line upgrade? Does that developer (and thus new - typically younger - homeowners) need to pay for the entire upgrade or should that be split over all the ratepayers? Utilities don't tend to upgrade lines to meet exact current demand - that upgrade is going to be spec'ed to be good for decades of additional growth so the next subdivision next door is going to be effectively getting a free ride.
I agree cost allocation needs to be fair. Part of that is the "last comer" is not the one to bear all the costs of needed upgrades. Otherwise things like rapid EV chargers in office parking lots would never get built.
Cost of generation kind of takes care of itself in a sane market. That's just called a power bill. If it's being priced in a way where one user subsidizes another that simply needs to be fixed. Typically those "subsidies" are going in the other direction though as constant 24x7x365 usage is much cheaper to service than rare correlated demand spikes residential users give you.
The transmission grid is a much harder thing to cost allocate fairly.
It's unsurprising that those communities see and reject this as a bad deal, that's politics working as intended.
Much of today's higher prices are attributable to the high cost of the permitting process. If you want the government to fix something, have them fix that.
Moreover, renewable generation isn't actually more expensive. LCoE for solar and wind is now something like $0.06/kWh, which is better than fossil fuels. That doesn't count the storage you'd need to use them for 100% of the grid, but we're nowhere near using them for 100% of the grid so that isn't relevant yet, and using them for e.g. 50% of the grid doesn't really require storage. Moreover, you can get a large storage sink "for free" by electrifying transportation, because then you have millions of large batteries that you can charge when cheap generation is available and let them stay at 60% rather than 90% when it isn't.
One problem is that they only produce when the sun is shining, or the wind is blowing, etc…. These can be ameliorated with batteries, but that still takes a significant additional expense.
The bigger problem is location. They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power. Which means you need transmission lines. And those take as long or longer to permit and build as do nuclear or combined-cycle natural gas power plants. These things tend to be delivered in terms of 120 months, or more. Not 120 days, like the datacenter builders want.
There are no quick and easy solutions here. Sure, you can truck in jet engines to use them as generators, but then you have to fuel them, you have to deal with the exhaust and added pollution, you have to deal with the noise, you have to deal with all the extra water you’re going to need to run them, you have to deal with added risk of toxic spills due to all the extra fuel you have to have on-site, you have to deal with added risk of fires because of that fuel, you have to deal with the increased heat island effects of running those engines, etc….
And datacenter builders want to externalize all their costs. This is the one single fundamental problem with them and all other big businesses.
If we make the datacenter builders fully internalize all of their costs, then we won’t have these problems.
This is the irrelevant part when they're not the majority of the grid. We already have peaker plants to handle the differences in load throughout the day. They currently mostly run during the day and the early evening. You build a bunch of new solar and instead they'd mostly run at night, because the new solar takes the existing daytime demand plus the new daytime demand and the existing peaker plants take the new nighttime demand.
> They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power.
This is not really true in the US. Solar doesn't work very well in Alaska because it's too far north, but it's fine basically anywhere south of the Canadian border, which is where essentially the entire US population actually lives. The average wind speed in every US state is enough to run a wind turbine.
There are some locations that are better than others, but better enough to build a thousand mile transmission line? That's almost a coin flip even before you consider what a liability it is to centralize power into a big exposed long-distance transmission line instead of just distributing the generation everywhere.
> Sure, you can truck in jet engines to use them as generators, but then you have to fuel them...
As a temporary measure, that's the trade off against short-term higher electric bills. As a permanent measure they're rubbish, but they're not needed as a permanent measure anyway. And the faster you build something else, the sooner they go away.
> And datacenter builders want to externalize all their costs.
That's not what that means. You can't internalize demand for a commodity. All you can do is increase supply to meet the new demand.
They need a buffer to be able to fully and properly contribute to the grid. Without a buffer, solar and wind farms are already causing some problems. They can’t really grow much beyond where they are today, without adding a buffer. Sad, but true.
T. Boone Pickens is pushing wind as hard as he possibly can out in the Texas panhandle, and it’s getting harder and harder for him to do that, in part because much of that is done without a buffer. Granted, he’s also having to fight transmission line problems.
For solar to be effective from the perspective of the grid, it needs to be installed in a place that gets enough average sunshine. And that latitude line is way lower than the border between Canada and the US. You also have to take weather and climate patterns into account, because if you’re below that line but you get too much average cloud cover, then you’re still not cost-effective enough.
The only places where you can install solar panels without regards for those kinds of constraints, is where people don’t care how many panels they have to install, in order to get the amount of average power that they need. If you over-provision by enough, then you can install useful amounts of solar in otherwise considerably less than ideal sites. But then you’re also willing to pay a price and space premium that no grid operator would be willing to pay. Many homeowners might fit into this category.
And many places where you would want to install solar panels close to the consumers so that you can avoid long transmission lines, that land just isn’t available. Or not available at a price that any grid operator would be willing to pay.
This happens with solar in the summer because it generates more in the summer, and then if you build enough for the other seasons you have "too much" on many days in the summer. But storage doesn't help much for that anyway because you'd need storage that lets you store power from July to use in January.
And "too much" isn't a problem when it only happens a minority of the time. You'll have critics complaining if it happens at all, but that doesn't mean it's a real problem.
The real problem is "not enough", which is the thing that doesn't get really bad until you're trying to run the majority of the grid on it. If it's only half then the other half is reliable power sources, some of those are still peaker plants and then you have the option to run them during the day on the days when it's cloudy, renewable generation is sometimes low but it's hardly ever actually zero, and by that point you're at something like 80% coverage on the lowest generation days and can get the remaining 20% through variable pricing.
> For solar to be effective from the perspective of the grid, it needs to be installed in a place that gets enough average sunshine.
A solar panel generates ~50% more in Arizona (on the border with Mexico) than New York (on the border with Canada). That isn't totally negligible but but it's not so large as to make it unworkable.
> Many homeowners might fit into this category.
Naturally, because it solves two problems at once. First, no land cost because you're using what would otherwise be an empty roof. Second, no transmission cost because the power is consumed where it's generated.
This is an easy win for homeowners because even at the less advantageous latitudes, they'd be paying ~$0.10/kWh for their own solar while the New York power company is asking 28.6.
And there are still plenty of not just homes but also commercial buildings that don't have solar on their roof. Give every Walmart and Home Depot an incentive to install a support scaffold full of panels over every parking lot. Why pay for a lot of land when we haven't even taken the easy wins yet?
You're not thinking like a grid operator. They need to pay to keep those peaker plants operational, even if they're not being used. The more peaker plants that have to be kept offline for more of the time, the less attractive it is to buy the power from the solar or wind plants.
Until solar and wind can generate reliable amounts of power, day-in and day-out, 365 days out of the year, you will always need those peaker plants to take up the slack. But those renewable sources will never be able to do that. The best they can hope for is to overgenerate during the times that they are capable of doing so, and storing the excess somehow in another medium. That could be batteries, flywheels, pumped hydro, or whatever. But they need that buffer if they are going to be a larger part of the grid.
> A solar panel generates around two thirds as much in New York (on the border with Canada) as in Arizona (on the border with Mexico). That isn't totally negligible but it's not so large as to make it unworkable.
It might not be enough to keep homeowners from installing solar panels in those kinds of environments, but it's definitely enough to keep large-scale power generation facilities from building there.
> And there are still plenty of not just homes but also commercial buildings that don't have solar on their roof. Give every Walmart and Home Depot an incentive to install a support scaffold full of panels over every parking lot. Why pay for a lot of land when we haven't even taken the easy wins yet?
I agree that parking lots and roofs of buildings are targets that look easy. But the incentives just aren't there. It's still just way too expensive, for not nearly enough ROI to make it happen. And I just don't see incentives of that scale coming, not even with the New Democrats.
In theory, I don't disagree with you with regards to where we should be going and what we should be doing.
But in practice, there is a huge difference between theory and practice.
But they are being used, every night. And then you can also use them during the day on the minority of days when it's cloudy.
> It might not be enough to keep homeowners from installing solar panels in those kinds of environments, but it's definitely enough to keep large-scale power generation facilities from building there.
Nope:
https://cleanview.co/power-projects/operating/solar-farms/us
You could easily confuse that with a population density map of the US. The main tell is that the dots are on the outskirts of the major cities rather than in them.
> It's still just way too expensive, for not nearly enough ROI to make it happen.
It kind of is happening. Nearly 100% of net new generation capacity in the US is renewables, with some new natural gas barely offsetting the gradual death of coal to net to zero.
The problem is it's not happening fast enough.
But they're not being used every night. Night load is mostly carried by combined-cycle, nuclear and wind. Peaker plants are expensive to operate compared to combined-cycle, so they will get turned off as soon as possible, so that the grid relies on less expensive sources for base load operations.
Okay, so let's go to the interactive view of that map at https://cleanview.co/power-projects/operating/solar-farms/us
It's basically just a whole bunch of single-colored dots on a map. That doesn't tell you when a given solar farm was installed, just by looking at it. And it doesn't tell you a whole lot about the capacity. If you zoom in, you can see that most of those dots are under 50MW in size. When I zoomed in and looked at a sample, most of them seemed to be single-digit MW ratings. What we really need to count is capacity, not number of dots.
Unfortunately, this page doesn't actually give us a lot of detail. But let's look at the detail it does give us. First off, let's look at the ten most recent solar farm installations that they show and where they are:
Five are in Texas, in the counties of Yoakum, Ector, Milam, Kaufman, and Upton. Two are in Illinois, in the counties of Pulaski and Jefferson. One is in Arizona. One is in Colorado. One is in Michigan. Of all of those, the ones in Colorado and Michigan are at about 40 degrees north latitude or higher, so that would qualify as "in the north". Pulaski and Jefferson counties in Illinois are below 40 degrees north latitude, so I count them "in the south".
Okay, so now let's look at where the ten biggest solar farms are:
Three are in Texas, in the counties of Jack, Swisher, and Webb. Two are in Arizona, in the counties of Maricopa, and La Paz. One is in Nevada. One is in California. One is in Illinois. One is in Ohio. And one is in Utah. Of those, the three in Illinois, Ohio, and Utah are all about 40 degrees north latitude, so they can be considered to be "in the north".
So, while we don't have the full dataset available to us to show the actual distribution of when and where grid-scale solar farms are being installed, the tiny amount of data we do have from this website clearly shows that the majority of the new grid-scale solar farms that are installed or being installed are going into the South. Texas alone has 50% of the newest solar farm installations, according to that list.
According to EIA, Texas alone has 40% of the planned new solar farm installations (see https://www.eia.gov/TODAYinENERGY/detail.php?id=67205), out of the 43.4GW of planned new solar farm capacity to be installed across the country. That would give us another ~17.36GW of solar to be added in Texas alone.
There's also 24GW of battery capacity to be added this year, of which 53% is planned for Texas alone (12.9GW), and 80% of the total across just three states: Texas, California, and Arizona. Solar is happening, yes. But so are batteries.
All of which is in line with what I said before.
But all that said, we should be looking at total average amounts of sunshine, and not north versus south. Anything at or above about an average of five hours of sunshine per day is considered "sunny", and the order here is Arizona being the sunniest, followed by Utah, Colorado, and Texas. Illinois, Michigan, and Ohio are in the "low-sun" group.
By that criteria, of the ten largest solar farms, only two of ten are in low-sun states: Illinois and Ohio. For share of total solar farm capacity of the top ten, that would be about 20% (1,170 of 5,786 MW).
Of the ...
So it's way worse, aside from populist "but think of the poor!" it is also actively hurting entire economy, driving prices up everywhere.
Care to explain how that fraction counts as "outbidding"?
Meanwhile the thing they're outbidding you on is generation.
Also I’m sharing 99.99% of the distribution costs with my neighbors.
Completely the opposite. Consumers are charged more for distribution because distribution to consumers costs more per kWh to build and maintain. Distribution to sites with large consumption has a much lower cost per kWh, which those sites are already paying, which is why they pay less per kWh even with that cost already included.
> Also I’m sharing 99.99% of the distribution costs with my neighbors.
Your neighbors who are also consuming an average of ~1kW, so the ~20 houses on your mile-long suburban street are consuming ~20kW in total. A 100MW+ site which is a mile from the substation or power plant has distribution costs that are thousands of times lower per kWh, will generally be located close to them for exactly that reason, and may also be sharing the same lines with other neighboring commercial/industrial sites.
It’s the market that is being distorted by all the additional datacenters coming online and wanting to suck down all the power that the entire rest of the country needs.
That market distortion is what needs to be fixed. Datacenter builders need to cover ALL the costs of ALL of the additional infrastructure needed to support their operation, plus the standard daily OpEx once all the infrastructure is in place.
And they need to comply with all national and international laws regarding their operation, including adherence to Dark Sky rules for lighting in-site, ensuring that they don’t cause any additional noise for any of the surrounding area, ensuring that they don’t cause any problems with water pollution, and so much more.
That's not what the article is describing.
What's happening is that price is used suppress demand during the period between when demand increases and when supply responds. That isn't the cost of increasing supply, it's the cost of not having it already. Which is why you want to cause the period between the one and the other to be as short as possible.
> Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years.
The claim that supply is fixed is "false" in the sense that it isn't literally impossible to add new supply. It is, however, much more difficult than it could or should be, which makes the investment cost more and take longer than it otherwise would, and in the meantime people are paying higher prices.
Moreover, "17x" doesn't really mean anything when the base rate started so close to zero. We've been deterring these investments for far too long.
> Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
New York and New England are among the hardest places in the country to build energy infrastructure which is why the price of electricity there is already high and then you don't get increased demand in the place with high prices since the high prices shift the demand to other locations.
That's not a useful strategy if you want lower prices since the prices there are only not going up there because they're already up there.
> Your comment doesn’t engage with the article’s central finding at all: who pays.
We need to distinguish two things here.
The first is, who pays for the actual long-term costs of increasing generation. But that's easy, because that cost isn't actually that high. It's equivalent to the normal pre-existing price of electricity. It might even be less because e.g. solar has gotten pretty cheap and to the extent that you add that, the average generation cost would even go down.
The second is, what happens during the period between when the new demand comes online and when the new generation comes online? But having new data centers "pay" that to keep the short-term price of electricity from going up is not possible, because having the short-term price go up is the thing that suppresses the short-term demand to keep it from exceeding supply. If the price didn't go up in the interim then the demand at the lower price would exceed available supply.
Which brings us back to, what you need is to bring the new generation online as quickly as possible.
This is the same as with roads. Roads are subsidized for corporations because damage is proportional to 4th power of weight (upto 9th power of weight on poor roads).
Almost all corporations in US are 'successful' on the backs of being subsidized by consumers in many ways.
There's plenty of reason to leave the problem in place. The current regime is corrupt, and energy scarcity benefits entrenched fossil fuel players who are cozy with the administration.
Congress has up until now given its endorsement to all of this. Will a new Congress care? Time will tell.
The issue isn't how difficult it is to provision new power, it's that no matter how cheap it will be and how unregulated it will be, datacenters will look to 1) skirt environmental law, and 2) arbitrage cheaper areas that end up being forced to split the price to increase production between the dcs and the locals.
Very large consumers should be required to pay for new production when it's obvious that only them benefit from it, there's absolutely no reason to split the bill with the locals, especially when datacenter have close to zero local economic benefits.
It's pretty simple: the more you use, the more you pay per unit.
And do we really think that giving corporations more power to make more money is somehow going to lessen the cost for consumers? What are your grocery prices like right now?
Why can't these rural areas just let this outside money build power infra at the drop of a hat?
Rules.
Who's rules?
Well it wasn't the town in the middle of nowhere that got screwed when steel mill closed or the glass cookware plant packed up for Vietnam who wrote the rules that's for sure...
In that case, the accurate analogy would be: Our kids will look back and wonder why we haven't built many more of them.
>California hasn't built its bullet train because the state has required 130,000 pages of environmental reports, making absurd demands like:
• counting bumblebees one by one • rebuilding woodrat stick huts • hiring specialized dogs to sniff lizard scat
I find their methodology misleading, though. They're basically taking the cost of transmission infrastructure upgrades and then assigning the cost of those upgrades proportional to peak energy demand of the customer base, not the cost of the infrastructure upgrade.
So if, for example, they estimate that residential customer demand will grow by 10%, then they suggest residential customers should only be paying for 10% of transmission infrastructure upgrades.
That's not how infrastructure upgrades work, though. Connecting 100,000 new residential addresses and areas can cost more than a couple data centers that are close to the power station.
The problem is they don't have access to, or at least they didn't look very hard, to find the actual data about transmission line upgrades and how much data centers actually pay to get connected. Contrary to what I see in a lot of the comments here, big customers do actually get billed for their infrastructure upgrade costs after utilities do their analyses. This paper is ignoring the utilities' analyses and substitutes their own highly simplified proportional-to-peak-demand estimates, and that's how they get their headline number.
One very surprising discovery was that they show data center construction incentives to actually be a good deal:
> State incentives for data centers have provided returns on the investments, if inconsistently, the researchers found. Some states, such as California, reaped $180 in worker income for every dollar spent, while Virginia increased income $2 for every dollar invested. The researchers determined that the presence of an existing, qualified workforce was a stronger indicator of high returns than the amount of incentive spending.
That's not what I expected to read.
This is a topic where details basically don't matter for public opinion, though, so I'm not sure it matters. It aligns with what people
A lot of the concerns people seem to have about datacenters is largely solved by local governments creating and enforcing sensible building codes, tax policy, and utility regulation. The uncomfortable truth, however, is that the citizens themselves hold the greatest responsibility for not being engaged in their communities, educating themselves and holding their elected officials accountable.
Rates aren't going up because of datacenters. They are going up because no investment has been made for more than 15 years, and we have been offsetting the "crunch" with creative workarounds.
The real problem has nothing to do with datacenters. The problem is that in our capitalist society, money equals political influence. So, these negative externalities get put on the people least able to buy political influence. It’s so obvious it’s almost embarrassing to say it out loud, but that’s what it is.
So don’t whine about data centers unless you are seriously ready to do something about capitalism. I’ll be right there with you when you get to that point.
Now, I and all my neighbors are being financially punished for these investments, because so many data centers are being built out due to this infrastructure. I have friends who are engineers at the power distribution company who are denied raises and putting in 80+ hour weeks without over time.
I say all this, not to diminish the low income Americans bearing the cost of these data centers, but to point out that its all of us. Its insane how few people are actually benefiting from this, and how simply taxing these data centers appropriately would fix it.
I am not familiar with the actual contracts these companies have, nor the tax policies and breaks they are getting, but its clear to me they are not paying enough. I wouldn't be surprised if these servers are over clocked to hell and back simply because the water and power is cheap.
Of course, the real reason energy prices are rising is that regulatory complexity makes it extraordinarily expensive and risky to build new generation, or even to upgrade transmission. Did you know that an upgrade across an already existing and built out right of way --- just making smaller wires bigger --- requires a full NEPA review?