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Even speculative AI energy demand can raise electricity bills<\/p>\n
Oscar Wong\/Getty Images<\/p>\n<\/p>\n
Tech companies\u2019 artificial intelligence ambitions will require a massive expansion in electricity-hungry data centres. This surging demand risks raising electricity bills for everyone \u2013 even if some data centres are never built.<\/p>\n
US utility companies are rushing to build more power plants, transmission lines and gas pipelines to meet the rapidly growing<\/a> electricity requirements of data centres. Residential electricity costs in the US have already increased nearly 30 per cent since 2021 \u2013 faster than inflation \u2013 according to a report<\/a> by PowerLines, a US non-profit organisation focused on utility regulation. The past two years alone saw nationwide electricity bill increases of $10 billion each year.<\/p>\n Now a new report<\/a> commissioned by the Southern Environmental Law Center, an environmental non-profit organisation based in Virginia, warns forecasts of electricity use overestimate the demand from speculative data centre plans, which could drive utility costs even higher. In particular, developers often submit redundant requests for electrical service in multiple regions for each data centre project \u2013 before ever committing to one location.<\/p>\n \u201cIf the projected data centre load doesn\u2019t fully materialise \u2013 which all evidence and, frankly, common sense at this point is pointing to \u2013 ratepayers will ultimately bear that economic burden of the unnecessary and underutilized gas and electric infrastructure,\u201d says Megan Gibson<\/a> at the Southern Environmental Law Center.<\/p>\n Former executives from companies like Google and Meta have themselves acknowledged the practice of making redundant requests for data centre electricity is common, the report notes. \u201cTech executives have said the quiet part out loud already,\u201d says Gibson. New Scientist reached out to Amazon, Google, Meta and Microsoft about their data centre development plans, but did not receive any additional comments.<\/p>\n The inflated estimates become clearer when taking all US data centre projects announced for 2025 through 2030 into consideration. Together, they would require 90 per cent of the global chip supply \u2013 despite the US currently accounting for less than 50 per cent of global chip demand. \u201cIt would be highly unlikely that all the world\u2019s chips would go to this subset of the US,\u201d says Marie N Fagan<\/a> at London Economics International, a global consulting firm headquartered in the US and Canada, whose team prepared the report.<\/p>\n To ease the burden for ordinary ratepayers, \u201cstates must require utilities to sign contracts with potential data centre customers that put this risk on the data centres\u201d, says Ari Peskoe<\/a> at Harvard Law School, who is an advisor for PowerLines.<\/p>\n Some state governments are starting to act. On 9 July, Ohio state regulators ordered<\/a> large data centre customers of Ohio\u2019s largest utility company must pay at least 85 per cent of their subscribed electricity load \u2013 even if their actual electricity consumption fell below that point. Georgia state officials also adopted<\/a> a rule that aims to prevent data centre development from burdening other ratepayers.<\/p>\n