As a researcher of energy policy who has studied the cost challenges associated with new utility infrastructure, I know that uncertainty comes with a cost. In the electricity sector, it is the challenge of state utility regulators to decide who pays what shares of the costs associated with generating and serving these types of operations, sometimes broadly called “large load centers.”
States are exploring different approaches, each with strengths, weaknesses, and potential drawbacks.
A new type of customer?
For years, large electricity customers such as textile mills and refineries have used enough electricity to power a small city.
Moreover, their construction timelines were more aligned with the development time of new electricity infrastructure. If a company wanted to build a new textile mill and the utility needed to build a new gas-fired power plant to serve it, the construction on both could start around the same time. Both could be ready in two and a half to three years, and the textile mill could start paying for the costs necessary to serve it.
Modern data centers use a similar amount of electricity but can be built in nine to 12 months. To meet that projected demand, construction of a new gas-fired power plant, or a solar farm with battery storage, must begin a year—maybe two—before the data center breaks ground.
During the time spent building the electrical supply, computing technology advances, including both the capabilities and the efficiency of the kinds of calculations artificial intelligence systems require. Both factors affect how much electricity a data center will use once it is built.
