In recent years, Artificial Intelligence (AI) has become increasingly embedded in everyday tasks, from shopping and payments to transportation, identity verification and communication. This growing reliance on AI has driven the demand for more data centers — vast facilities that store and process the massive amounts of data powering these technologies. Washington state hosts data centers for several major companies, including Microsoft, Google Cloud and Amazon Web Services. Despite the potential for job creation, the expansion of new and existing data centers raises significant concerns about their energy consumption and environmental impact.

Energy consumption is a major concern for data centers, as they are entirely dependent on electricity, whether sourced from renewable or nonrenewable energy. This issue demands careful consideration as AI usage continues to expand. According to Associate Professor of Geology and Environmental Studies Lyman Persico, this growing trend is only just beginning to be fully understood.

“I think we have cause for a moderate amount of concern … We really have to understand how large these data centers are in terms of their power consumption and how rapidly these data centers are coming around … We’re just starting to reckon [with] how much that demand is going to increase due to … things like AI,” Persico said.

To understand the degree to which AI is already causing an explosion in electricity demand, consider that the energy used in a simple Google search has increased 30-fold since the company integrated AI Overviews.

Chief Operating Officer of H5 Data Centers David Dunn, provided insight into the magnitude of this issue from an industry perspective. H5 Data Centers owns and operates data centers in Seattle and Quincy, Washington, as well as 20 other cities and towns across the country.

“AI workloads are growing very rapidly, and the supply chain of mechanical and electrical components in data centers has not kept up,” Dunn said.

The increase in energy demand driven by AI poses a potential risk to local power grids. In areas like Quincy, Washington and other counties in the region, the power supply relies heavily on renewable sources such as hydroelectric power and wind turbines, making energy stability a critical issue. Dunn emphasized the importance of the region’s natural resources in supporting data center operations.

“Quincy, Washington is a really good place to have a data center from a weather and mechanical systems perspective. You can have systems designed to use outside atmospheric conditions. Quincy itself is served by hydroelectric dams right on the Columbia River,” Dunn said.

However, balancing the rising energy demand from data centers with the needs of residential and commercial customers in the region poses a challenge. Chuck Allen, Senior Manager of External Affairs and Communications at Grant County Public Utility District (PUD) — the utility provider for H5 Data Centers in Quincy, Washington — outlined the county’s approach to addressing this issue.

“Our commissioners have adopted a rate strategy that gives residential, small business and agricultural customers ‘core customer’ preference. This ensures that these core customers receive power at or below Grant PUD’s cost to serve them, while larger power-consuming customers will pay rates above the utility’s costs,” Allen said in an email to the Wire.

With this approach, industrial customers with higher energy demands bear the costs associated with infrastructure expansion in order to prevent price increases for local residents.

As data centers’ energy needs surpass what the state’s current infrastructure can provide, regulations may be necessary to encourage corporations to prioritize renewable energy over fossil fuels. Persico pointed out that while the shift to green energy is crucial, identifying the most effective path forward can be challenging.

“I think we need to find some way to incentivize [renewable energy] because we’ve seen that Google has stepped back from its carbon commitments because of its increase in power,” Persico said.

Grant County PUD has already launched several initiatives to promote energy efficiency and the adoption of renewable energy. According to Allen, the utility offers state-mandated incentive programs for energy efficiency, allocating around $400,000 over a two-year period for rebates available to all customer groups, including data centers. This program aims to reduce energy consumption across all sectors, fostering sustainability and efficiency within the industry.

Dunn also emphasized H5 Data Centers’ commitment to sustainability.

“We have a goal of becoming carbon neutral. We define that as offsetting the power our customers draw through either sustainability RECs [Renewable Energy Certificates] or directly deploying solar arrays,” Dunn said.

Despite the abundant use of renewable energy sources such as hydroelectric power and wind in the region, Dunn acknowledged that the Pacific Northwest faces unique challenges regarding solar power.

“The Pacific Northwest, being where it is on the latitude of the planet, has less optimal conditions for solar generation compared to places like Arizona or New Mexico. … But the hydroelectric power in Washington helps make up for that,” Dunn said.

While many agree that renewable energy is a priority, fossil fuels, particularly natural gas, still play a significant role in electricity production in the Pacific Northwest. Dunn argues that natural gas – the second-largest source of electricity generation in Washington state – is unlikely to be phased out anytime soon, especially at night when solar is unreliable.

“Natural gas will continue to be a significant source for electricity across the U.S.,” Dunn said.

However, Persico emphasized the importance of replacing fossil fuels with renewable energy given the urgency of decreasing carbon emissions.

“We need to significantly reduce fossil fuel consumption now because the costs of conversion to both solar power and wind power are such that it is significantly cheaper than trying to remove that carbon from the atmosphere,” Persico said.

The conflict between growing energy needs and concerns regarding the environmental impact of electricity generation will continue to be highly relevant as AI expands.

The recent advancements and promising future of AI, along with the growth of data centers, necessitate both an upgrade to existing infrastructure and a shift in energy sources. A top priority for utility providers like Grant County PUD is ensuring the stability of the power grid while meeting the increasing energy demands of their customers.

“We are seeing significant growth in all sectors in Grant County. … We are working with our customers to build out local power infrastructure so we can reliably serve this load,” Allen said.

However, the process of building new infrastructure comes with numerous challenges. Allen noted that acquiring property and rights of way for new infrastructure, along with meeting local, state and federal permitting requirements, can be a time-consuming process. This has resulted in a queue of industrial customers, including data centers, waiting for power resources to be built to serve them.

Despite these challenges, AI presents an opportunity to optimize energy consumption more effectively, as evidenced by its increasing integration across industries and power plants. Persico pointed to the potential for AI to help monitor smart electrical systems and grids, reducing overall energy usage.

“There’s potential for AI to even [be used to] help…monitor smart electrical systems and smart houses, and a smart grid that can use energy more efficiently,” Persico said.

Ultimately, the key to balancing the growth of data centers with environmental sustainability and the needs of local communities lies in collective decision-making. As Persico pointed out, these are decisions that need to be made at both the local and societal levels.

“That’s a decision we as society and we as community members in the Pacific Northwest have to [make] … how we want to approach these new demands and whether we want this type of data center infrastructure in the region,” Persico stated.

The development of data centers in places like Quincy, Washington presents both challenges and opportunities for growth and innovation. As the use of AI continues to expand, it is crucial for data centers, service providers and policymakers to collaborate in ensuring that energy demands are met in a sustainable and responsible manner that protects the environment. By investing in renewable energy capacity, upgrading infrastructure and promoting energy efficiency, we can effectively address the needs of the technology sector alongside the environmental and economic concerns of local communities.