California data centers rapidly increasing energy use, report finds

from Alejandro LazoCalMatters

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California is a major hub for data centers—facilities that store and transmit much of the Internet. But how much these energy-intensive operations affect the country’s energy use, climate and public health remains an open question for researchers.

A new report published this week by the environmental think tank Next 10 and a UC Riverside researcher tries to quantify that impact — but its authors say the report is just an estimate without more precise data from the centers themselves.

“We’re just doing these reports almost in the dark — because there’s almost zero information,” said Shaolei Ren, an AI researcher at UC Riverside and co-author of the report. “We have extremely little information about data centers in California.”

Wren and his co-authors conclude that between 2019 and 2023, electricity use and carbon emissions from California data centers nearly doubled, while on-site water consumption slightly more than doubled. Much of the increase is due to the electricity required to perform AI calculations. But many of the report’s assessments, including its health impact, are based on limited data — a key problem the researchers said they encountered repeatedly in preparing the report.

The report highlights a growing tension in the industry: Clean energy advocates and experts who study energy demand agree that the days of stable, even data center power consumption are over, but there is much less consensus about how sharply electricity demand will rise.

“In very simple terms, a lot of the uncertainty comes from: What will our lives look like with AI in the next five years, 10 years, 20 years — how integrated will it become?” said Maya LeRoy, a Sacramento-based advocate who focuses on clean energy and the grid. “Are we reaching a point where usage is plateauing, or will it continue?”

Experts say more transparency is essential to better understand what resources California data centers require.

Liang Min, who runs the Bits and Watts initiative at Stanford University, says the state needs to improve its energy demand forecasts to support clean energy goals. Min, who investigate AI’s increasing strain on the power grid told CalMatters that demand on power centers grows in rapid, unpredictable phases and can change rapidly with each new generation of hardware.

The California Energy Commission, which plans for energy use and demand growth, “can play a key role” in understanding and adapting to the demands of AI.

As demand grows, policy responses lag

In Sacramento, efforts to add transparency and guardrails around data centers have struggled this year. California legislators shelves most consumer and environmental proposals targeting data centers, even when they have approved a plan for regionalization of California’s electric grid to meet the demand from the sector. They separated two bills aimed at curbing data center energy use — one requiring operators disclose their electricity consumption and another which offered incentives for clean energy.

Governor Gavin Newsom vetoed a separate proposal that would have required data center operators to report water usage even after the bill was watered down. In the end, Newsom — who has often emphasized California’s dominance of the artificial intelligence sector — signed only one measure allowing regulators to determine whether data centers are increasing costs.

Mark Toney, who runs The Utility Reform Network and supported the transparency measure, questioned whether data centers justify the costs they impose on ratepayers.

He warned of “rampant consumption of energy and water in the centres, increased carbon emissions and higher bills for ratepayers”.

Hard facts about data centers are hard to come by in California because most lease power, cooling and space to other companies, said Ren, the UC Riverside researcher. Such colocation facilities do not operate their own servers or technology, so they publicly disclose less information than data centers built by large technology companies in other countries.

Although estimates vary, California has the third-highest number of data centers in the country behind Texas and Virginia. DataCenterMaptrade directory, which tracks data centers worldwide, lists 321 sites across the state. More are expected in California in the coming years.

The centers operate around the clock and often rely on backup diesel generators to maintain service during power outages, a practice that adds both greenhouse gases and local air pollutants. They also consume energy and water depending on their cooling methods.

The growing demand for data centers and emerging issues

F. Noel Perry, the businessman and philanthropist who founded Next 10, said his organization’s report shines a light on what is essentially a black box. “To solve a problem, we have to understand what the problem is,” he said.

“We’ve seen the proliferation of data centers in California, across the U.S. and around the world — and we’re also seeing big environmental implications,” Perry told CalMatters. “The real issue is about transparency — and the ability of elected officials and regulators to create some rules that will govern emissions reductions and water use.”

The report estimates that data centers used 10.8 terawatt hours of electricity in 2023, up from 5.5 terawatt hours in 2019, accounting for 6% of the country’s total data center energy consumption. Unless growth is curbed or better managed, the report’s authors project demand could rise to 25 terawatt hours by 2028, equivalent to the electricity use of roughly 2.4 million U.S. homes.

Carbon emissions from the sector nearly doubled over the same period, rising from 1.2 million to 2.4 million tons, the researchers estimated, while on-site water use rose from 1,078 acre-feet in 2019 to 2,302 acre-feet in 2023. That’s enough to meet the annual water needs of nearly seven thousand California households.

The report’s authors also estimate that the public health costs of data center-related air pollution have potentially risen from $45 million in 2019 to more than $155 million in 2023, with the burden expected to reach $266 million by 2028.

Most of these costs stem from indirect pollution produced by fossil fuel-fired power plants that feed the grid. But the authors pointed out that regions densely populated with data centers — especially Santa Clara County, where Silicon Valley is located — may face higher localized risks from diesel backup generators.

Dan Diorio, vice president of state policy for the Data Center Coalition, said the report overstates the impact of backup diesel generators, which are heavily regulated and rarely used in California, minimizing their contribution to air pollution. Data centers do not control the water used in power generation, Diorio said. Since these water impacts do not happen on site, it is not fair to blame the centers themselves.

“This paints a distorted picture of this critical 21st century industry,” Diorio said in a statement.

Diorio said the report also ignores how cooling technology varies by region and has become more efficient in recent years.

But the authors say their findings underscore the need for uniform reporting standards for energy and water use in data centers. The report says California should establish ongoing local monitoring and review of data centers — and make the findings public.

Ren, the UC Riverside researcher, said California’s cleaner grid and stricter pollution rules are already helping to reduce some of the environmental impacts of data centers.

“California — compared to the national average — is doing a better job because of the cleaner grid,” he said.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.