Technical.ly editor Katie Malone sends her Innovation Wire column as a newsletter every two weeks, covering local trends in AI, tech, startups, entrepreneurship and jobs of the future. Subscribe here.
In: A more reliable power grid.
Out: Data centers.
That’s the rhetoric recent polling data shows. Across the US, nearly three-quarters (72%) of people support investing in the electric grid, per a survey by clean energy nonprofit Conservative Energy Network, while only one in five (21%) support or somewhat support a data center being built near where they live, according to a survey commissioned by climate news site Heatmap.
It’s not exactly a one-to-one comparison, given the different sources of data. (And, as always, keep in mind who paid for these polls.)
Here’s the overlap: Data center investments are driving grid upgrades.
They may be unpopular as neighbors, but data center energy demand is already reshaping how states plan, finance and regulate the electric grid, a patchwork system that has struggled to keep up with modern energy use. The majority of power transformers, substations and transmission lines are outdated or inefficient, and the US sees many more blackouts than other healthy economies around the world.
Despite that, grid upgrades have been slow going. Coordination is one reason: Those lines and transformers are owned or managed by a coterie of public and private utilities subject to rules from dozens of regulatory agencies. Plus, it would be expensive — one estimate from 2017 put the replacement cost at $5 trillion.
But rising data center demand is forcing a rethink.
Georgia Power said data center growth is part of why it plans more than 1,000 miles of new transmission lines. More than $7 billion in new transmission projects in Texas are being built to handle a surge in new demand tied to data centers. Arizona’s SRP said it is making data centers pay upfront for upgrades to grid infrastructure to meet large-load demands.
Let’s look at Pennsylvania, a place our reporters track closely.
At a politico all-star “energy and AI” summit in Pittsburgh last year, the headline figure was a $90 billion package of private-sector pledges, with many of the investments going to gas generation and transmission modernization tied to data center development.
Pennsylvania’s regulators are now wrestling with new rules for how large electricity users should pay to connect to the grid. Hanging in the balance? Making sure the companies profiting off the data centers pay for the infrastructure upgrades they’ll require, instead of leaving households and small businesses with stranded costs.
The public is already skeptical of electric companies: A Pew survey found that two-thirds of Americans believe utilities’ push for higher profits is a major reason home energy bills are rising. In the same poll, 4 in 10 respondents pick data centers as a target to blame.
The grid was already due for major upgrades. Where data centers fit into that broader cost debate is less clear, and may depend on how communities weigh the tradeoffs.
Another angle:
The significant capital that data center companies are directing to the energy system could be used to support scaling traditional renewable energy sources like wind and solar, as well as GETs [grid-enhancing technologies] and nascent technologies such as virtual power plants, clean firm generation, and long-duration storage.”
Technical.ly headlines of the week
3 things to know
🧐 Search party: Who’s searching for AI the most? Mississippi, Arkansas and Louisiana top the list. Mississippi lapped the field, with AI searches up 1,024% year over year. [Arkansas Money and Politics]
🗺️ Pocket guide: World Cup host cities are trying to turn fan traffic into neighborhood traffic. We covered an indie developer doing it in Philly, but check out how Seattle, Kansas City and Frisco compare. [Technical.ly (Philadelphia)/Sports Business Journal (Seattle)/Startland News (Kansas City)/Chron (Frisco)]
🐆 Lions, Tigers and Bears, oh my!: Data centers already had human neighbors worried about power, water and noise. Now Nashville’s zoo is joining the opposition, arguing a proposed facility next door could disturb some very sensitive residents — including its clouded leopards. [NBC News]
What patterns are you noticing between data centers and electric grid buildouts? Hit reply and let me know.