Friday, May 24

The AI ​​frenzy complicates efforts to keep energy-hungry data sites green

West Texas, from the oil rigs of the Permian Basin to the wind turbines that swirl above the High Plains, has long been a magnet for companies seeking fortunes in the energy sector.

Now, those arid ranch lands offer a new revenue opportunity: data centers.

Lancium, a data center and energy management company that has opened offices in Fort Stockton and Abilene, is one of many companies across the country betting that building data centers near generation sites will allow them to tap into ‘underutilized clean energy.

“It’s a land grab,” said Lancium president Ali Fenn.

In the past, companies built data centers close to Internet users, to better meet consumer requests, such as streaming a show on Netflix or playing a video game hosted in the cloud. But the growth of artificial intelligence requires massive data centers to train the evolving models of large languages, making proximity to users less necessary.

But as more and more of these sites begin to appear across the United States, there are new questions about their ability to meet demand while continuing to operate sustainably. The carbon footprint of building centers and racking expensive IT equipment is itself significant, and their energy needs have grown considerably.

Just ten years ago, data centers consumed 10 megawatts of energy, but today the average amount is 100 megawatts. The Uptime Institute, an industry advisory group, has identified 10 large cloud computing campuses across North America with an average size of 621 megawatts.

This growth in electricity demand comes as U.S. generation is the highest in half a century and the power grid is becoming increasingly strained.

The Uptime Institute predicted in a recent report that the industry’s myriad net-zero goals, which are self-imposed benchmarks, would become much harder to meet in the face of this demand, and that backsliding could become common.

“It’s not just about data centers,” said Mark Dyson, CEO of RMI, a nonprofit focused on sustainability. “Data centers represent a gateway to a much larger wave of load growth that we are already seeing and will continue to see in this country resulting from the electrification of industry, vehicles and buildings.”

In recent years the data center industry has embraced more sustainable solutions, becoming a significant investor in renewable energy at the enterprise level. Sites leasing wind and solar capacity increased 50% year-over-year starting in early 2023, to more than 40 gigawatts, capacity that continues to grow. However, demand exceeds such investments. And the need for more processing power is supporting interconnect queuing and creating buffer solutions.

Power-hungry, busy data centers further complicate the balance. The data centers under construction, when completed, would use as much annual electricity as the San Francisco metropolitan area, according to a report released Wednesday by real estate services firm JLL. Most sites online this year are already rented; in popular markets, a significant space won’t open up for at least two years.

“You have to get as many gigawatts as you can, as fast as you can,” Ms. Fenn said of Lancium. “People are going to put this together any way they can.”

This quickly expanded development beyond established first- and second-tier markets, such as Northern Virginia, Dallas and Silicon Valley.

Competition is growing in parts of the country that offer cheap land and available energy. Amazon, for example, announced last month that it was planning a $10 billion project in Mississippi, the state’s largest economic development project, including data centers and solar generation sites.

“Anyone who has a significant power source has now become a new data center market,” said Jim Kerrigan, chief executive of North American Data Centers, an industry consultancy.

AI represents only a small percentage of the global data center footprint. The Uptime Institute predicts that AI will reach 10% of global industry energy consumption by 2025, up from 2% today.

“They’ve been building at a breakneck pace with so many other types of demand drivers,” said Andy Lawrence, executive director of research at the institute. “AI is kind of the foam on top.”

According to real estate firm CBRE, data center construction increased by 25% last year. And Nvidia, which supplies most of the high-tech chips that power this technology, reported record profits in data center sales last week, with revenue in 2023 reaching $47.5 billion, a 217 percent increase. % compared to the previous year.

National energy grids can’t handle this kind of demand, said Christopher Wellise, vice president of sustainability at Equinix, a global data center operator. “Technology is moving faster than our infrastructure has evolved,” he said.

Equinix, which operates 260 data centers worldwide, has installed fuel cells from Bloom Energy to provide backup power to many of its data centers. The company is also reducing emissions by putting more renewable energy into the grid, such as through power purchase agreements, and has achieved 5% more efficiency from its operations over the past year, Wellise said. Design firms like Gensler have been experimenting with new designs that use solid wood to reduce embodied carbon in data centers.

And AI itself can help: In a Frankfurt data center, Equinix used the technology to moderate cooling loads and adjust energy consumption based on weather changes, making a data center 9% more efficient.

Niklas Sundberg, sustainable IT expert and chief digital officer at Kuehne + Nagel, a transportation and logistics company in Sweden, said the industry should focus on investing in renewable generation capacity.

Some sites have sought to install gas-fired power plants on site to make up for grid shortfalls. It may be cleaner than existing energy, but it increases the sector’s substantial carbon footprint.

And lawmakers have proposed more transparency and action. In early February, the Senate presented a proposal to assess the environmental impact of artificial intelligence. Lawmakers in northern Virginia, known as Data Center Alley, have pushed to impose sustainability goals for data centers.

Suhas Subramanyam, a Virginia state senator, has proposed a series of rules, including one that would require data centers to get at least 90% of their energy from renewable sources to qualify for subsidies. “I don’t want to leave my kids in a situation where, 20 years from now, they’re going to have to pay some bills for things that we thought were a good idea and turned out not to be,” he said.