From oil rigs in the Permian Basin to wind turbines swirling above the plateau, West Texas has long attracted companies seeking wealth in the energy sector.
Now, those dry ranchlands are offering a new money-making opportunity: data centers.
Lancium, an energy and data center management company with locations in Fort Stockton and Abilene, is betting that building data centers near power plants can harness underutilized clean power. One of the companies.
“This is a land grab,” Rancium President Ari Feng said.
Traditionally, companies have built data centers closer to Internet users to better meet consumer demands, such as streaming shows on Netflix or playing video games hosted in the cloud. Ta. However, the growth of artificial intelligence requires large data centers to train evolving large-scale language models, reducing the need to be closer to users.
But as these sites begin to proliferate across the country, new questions arise about whether they can sustainably operate and meet demand. The carbon footprint of building centers and racks of expensive computer equipment is itself huge, and the demand for electricity has also increased significantly.
Just 10 years ago, data centers consumed 10 megawatts of power; today, 100 megawatts is common. The Uptime Institute, an industry advisory group, has identified 10 ultra-large cloud computing campuses across North America with an average size of 621 megawatts.
This increase in power demand comes as U.S. manufacturing is at its highest level in half a century and the power grid is increasingly strained.
In the face of this demand, the industry's myriad self-imposed net-zero goals will become harder to meet and backtracking may become commonplace, the Uptime Institute said in a recent report. I predicted it.
“This is not just about data centers,” said Mark Dyson, managing director of RMI, a sustainability-focused nonprofit. “Data centers are a practice round for what the country has already seen, and will continue to see, an even greater wave of load growth with the electrification of industry, vehicles and buildings.”
The data center industry has embraced more sustainable solutions in recent years and has become a significant investor in renewable power at the enterprise level. Sites leasing wind and solar capacity have grown 50% year-over-year to more than 40 gigawatts as of early 2023, and capacity continues to grow. Still, demand outstrips those investments. And what you need more processing power for is backing up your interconnect queues and creating a stopgap solution.
Power-hungry data centers complicate that balance even more. Once completed, the planned data center will consume as much electricity per year as the San Francisco metropolitan area, according to a report released Wednesday by real estate services firm JLL. Most sites coming online this year are already leased. In popular markets, significant space will not be available for at least two years.
“We need to get as many gigawatts live as possible as quickly as possible,” says Rancium's Fenn. “People are trying to put it together any way they can.”
This has led to rapid expansion of development beyond established primary and secondary markets such as Northern Virginia, Dallas, and Silicon Valley.
Competition is increasing in some parts of the country that offer cheap land and available power. Amazon, for example, announced last month that it is planning a $10 billion project in Mississippi, the state's largest economic development project, including a data center and solar power facility.
“Anyone with a significant source of power is now the new data center market,” said Jim Kerrigan, managing principal at industry consultancy North American Data Centers.
AI is only a small part of the world's data center footprint. The Uptime Institute predicts that global electricity usage due to AI will jump from 2% today to 10% by 2025.
“Along with many other types of demand drivers, they're building at a breakneck pace,” said Andy Lawrence, the institute's executive director of research. “AI is like a bubble.”
Data center construction increased by 25% last year, according to real estate firm CBRE. And Nvidia, which supplies most of the high-tech chips behind the technology, last week reported record profits in data center sales, with sales in 2023 reaching $47.5 billion, up 217% from a year earlier. announced.
Christopher Wellies, vice president of sustainability at global data center operator Equinix, said the nation's energy grid can't handle that kind of demand. “Technology is evolving faster than infrastructure is evolving,” he says.
Equinix, which operates 260 data centers around the world, installed Bloom Energy fuel cells to provide backup power to many of its data centers. The company is also reducing emissions through offsets, such as through power purchase agreements, and has improved operational efficiency by 5% over the past year, Wellies said. Design firms like Gensler have been experimenting with new designs that use large amounts of wood to reduce the carbon contained in data centers.
AI itself can also help. In our Frankfurt data center, Equinix used this technology to ease cooling loads, adjust energy usage to changing weather conditions, and increase data center efficiency by 9%.
Niklas Sandberg, sustainable IT expert and chief digital officer at Swedish transport and logistics company Kuehne & Nagel, said the industry needs to focus on investing in renewable power generation capacity.
Some facilities are looking to install on-site gas power plants to compensate for grid deficiencies. While it may be cleaner than existing electricity, it will significantly increase the industry's carbon footprint.
And lawmakers are proposing more transparency and action. In early February, the Senate introduced a proposal to assess the environmental impact of AI. Lawmakers in Northern Virginia, known as Data Center Alley, are pushing to mandate sustainability goals for data centers.
Virginia Sen. Suhas Subrahmanyam proposed a number of rules, including requiring data centers to get at least 90 percent of their electricity from renewable energy to be eligible for subsidies. “We don't want to put our kids in a situation where 20 years from now we'll have to pay part of what we thought was a good idea and it turns out it wasn't. ” he said.
