Increased demand drives up prices under a fixed supply regime. Power is, in many places of the US, something approaching a fixed supply regime. This is not a physical requirement of the universe. It is a policy choice that we have made. I would argue that it is not the data centers driving up power prices, it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
The main problem identified in this article is cost allocation, not rate of deployment. Data centers paid only 38% of the grid costs tied to their growth. Speeding up permitting would simply accelerate this subsidy to data centers, with households paying even more, sooner.
Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years. The problem is that capex deployed to serve data centers is being paid for by households, not that it cannot be deployed.
Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
The bill you cited would fix much of this, but it would do so via provisions forcing data centers to pay for the costs they cause, instead of forcing households to subsidize them.
If your point is “it’s policy,” fine. But the policy causing this is cost allocation, not permitting.
Your comment doesn’t engage with the article’s central finding at all: who pays.
> Data centers paid only 38% of the grid costs tied to their growth.
Data centers pay for electricity under the tariffs utilities charge them. To the extent their demand increases wholesale electricity prices, it's the normal consequence of additional demand competing for constrained supply. In no other market is it standard for the person outbidding to also pay for continuing to provide the service to the person who was outbid. The only reason there is much incremental grid cost is because utilities are legally required to continue serving their residential customers. It seems extremely reasonable for residences to share in some of these costs when getting electricity at a significant discount from market price.
The notion that 'households' are paying for data center electricity is just not what is happening. Maybe residences should get discounted electricity, but again this is a policy question and I'm not sure the best use of the marginal federal dollar.
> Transmission investment driven by new demand grew 17x in five years.
Investment is not transmission built, I don't see how this disproves the well-documented countrywide transmission delays. If anything, it is an indication that we are transmission bottlenecked.
Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built (possibly built with public money as a public utility). Should that additional cost of new generation be shared equally by the datacenter and the community? IMO it should be paid by the datacenter.
> Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built
Much of today's higher prices are attributable to the high cost of the permitting process. If you want the government to fix something, have them fix that.
Moreover, renewable generation isn't actually more expensive. LCoE for solar and wind is now something like $0.06/kWh, which is better than fossil fuels. That doesn't count the storage you'd need to use them for 100% of the grid, but we're nowhere near using them for 100% of the grid so that isn't relevant yet, and using them for e.g. 50% of the grid doesn't really require storage. You can also get a large storage sink "for free" by electrifying transportation, because then you have millions of large batteries that you can charge when cheap generation is available and let them stay at 60% rather than 90% when it isn't.
I love renewable energy as much as anyone I know, but they have some major and well-known problems.
One problem is that they only produce when the sun is shining, or the wind is blowing, etc…. These can be ameliorated with batteries, but that still takes a significant additional expense.
The bigger problem is location. They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power. Which means you need transmission lines. And those take as long or longer to permit and build as do nuclear or combined-cycle natural gas power plants. These things tend to be delivered in terms of 120 months, or more. Not 120 days, like the datacenter builders want.
There are no quick and easy solutions here. Sure, you can truck in jet engines to use them as generators, but then you have to fuel them, you have to deal with the exhaust and added pollution, you have to deal with the noise, you have to deal with all the extra water you’re going to need to run them, you have to deal with added risk of toxic spills due to all the extra fuel you have to have on-site, you have to deal with added risk of fires because of that fuel, you have to deal with the increased heat island effects of running those engines, etc….
And datacenter builders want to externalize all their costs. This is the one single fundamental problem with them and all other big businesses.
If we make the datacenter builders fully internalize all of their costs, then we won’t have these problems.
How fine grained do you want this to be? The point of cost allocation is that grid upgrades and additional capacity overall benefit everyone - basically that electricity exists as a reliable and relatively cheap commodity to all comers. Especially industrial ones. It more or less enables the modern world.
If you're the last house on your block to upgrade your home service to 200A in order to charge an EV, should you be cost allocated 100% of the distribution transformer upgrade that happened to be needed to service you? After all your neighbors were doing just fine until you wanted more capacity.
How about the new subdivision of 200 homes that requires a regional transmission line upgrade? Does that developer (and thus new - typically younger - homeowners) need to pay for the entire upgrade or should that be split over all the ratepayers? Utilities don't tend to upgrade lines to meet exact current demand - that upgrade is going to be spec'ed to be good for decades of additional growth so the next subdivision next door is going to be effectively getting a free ride.
I agree cost allocation needs to be fair. Part of that is the "last comer" is not the one to bear all the costs of needed upgrades. Otherwise things like rapid EV chargers in office parking lots would never get built.
Cost of generation kind of takes care of itself in a sane market. That's just called a power bill. If it's being priced in a way where one user subsidizes another that simply needs to be fixed. Typically those "subsidies" are going in the other direction though as constant 24x7x365 usage is much cheaper to service than rare correlated demand spikes residential users give you.
The transmission grid is a much harder thing to cost allocate fairly.
Except people are building datacenters that don't provide any marginal utility or jobs to locals, and asking small local communities to increase their collective power cost for no local benefit.
It's unsurprising that those communities see and reject this as a bad deal, that's politics working as intended.
The lack of cheap reliable power is actively hurting the entire economy. This stems primarily from the fact the US coasted on the previous generation's (no pun intended) investments in the power grid. At some point you run out of your great grandparents investments into the future. Inertia doesn't last forever.
The billed price per kWh includes the cost of both generation and distribution. Residential customers pay higher distribution costs per kWh because the same mile of residential power lines only carries kW of power instead of MW without correspondingly consuming thousands of times less land or requiring thousands of times less maintenance.
Meanwhile the thing they're outbidding you on is generation.
> Data centers paid only 38% of the grid costs tied to their growth.
That's not what the article is describing.
What's happening is that price is used suppress demand during the period between when demand increases and when supply responds. That isn't the cost of increasing supply, it's the cost of not having it already. Which is why you want to cause the period between the one and the other to be as short as possible.
> Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years.
The claim that supply is fixed is "false" in the sense that it isn't literally impossible to add new supply. It is, however, much more difficult than it could or should be, which makes the investment cost more and take longer than it otherwise would, and in the meantime people are paying higher prices.
Moreover, "17x" doesn't really mean anything when the base rate started so close to zero. We've been deterring these investments for far too long.
> Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
New York and New England are among the hardest places in the country to build energy infrastructure which is why the price of electricity there is already high and then you don't get increased demand in the place with high prices since the high prices shift the demand to other locations.
That's not a useful strategy if you want lower prices since the prices are only not going up there because they're already up there.
> Your comment doesn’t engage with the article’s central finding at all: who pays.
We need to distinguish two things here.
The first is, who pays for the actual long-term costs of increasing generation. But that's easy, because that cost isn't actually that high. It's equivalent to the normal pre-existing price of electricity. It might even be less because e.g. solar has gotten pretty cheap and to the extent that you add that, the average generation cost would even go down.
The second is, what happens during the period between when the new demand comes online and when the new generation comes online? But having new data centers "pay" that to keep the short-term price of electricity from going up is not possible, because having the short-term price go up is the thing that suppresses the short-term demand to keep it from exceeding supply. If the price didn't go up in the interim then the demand at the lower price would exceed available supply.
Which brings us back to, what you need is to bring the new generation online as quickly as possible.
In this case the other 62% is only $5.1 billion, which averages out to about $15 per person across the US. Since this is reflected in wholesale electricity prices I assume it is even enough that after accounting for unequal impact, it still isn't that high. It seems like a problem, but not a major one.
That average is a false equivalency since the cost subsidy will be localized to the regional power provider typically the state-run monopoly or some other large provider. It's not an even distribution and the core thesis of the article, that the lower-income folks are the ones subsidizing it, likely still holds because land is historically cheaper and is generally less developed by municipal and state govts when its residents are lower-income and/or a minority population, and local distribution (and costs) impact those with less (usually no) disposable income by which they can improve their household energy efficiency.
This makes no sense because the impact here is increased costs on the utilities which is then passed through as rate increases. Unless lower income people consume more electricity than rich people (doubt) then it doesn't impact them more.
They're saying it's not $15 from each of the $350m people in the US, it's a much larger number from each of the much smaller number of people unlucky enough to share a utility with one of these new data centers.
Well, since it’s “only” $5.1 billion, the trillion dollar valued companies should have no problem paying costs in full rather than seeking subsidies from the hapless taxpayers.
Even if congress "fixed" this problem tomorrow it would still take years to build the increased capacity (as you note). Since we do essentially have a fixed supply regime the fast buildout of data centers we've seen over the last few years has indeed been the cause of increased power prices. I'll also add that several renewable power generation projects had been in the works and this administration killed them (even paying a lot of money to kill them).
There is new data center project 30 miles outside my city that plans to build a 1000MW natural gas power plant and a 500MW biomass plant that will take millions of acres of forest to sustain (to quite the developer it will burn 350-500 truckloads of logs per day).
If this is an example of the kind of buildout we want to streamline, I say no thanks.
One of the perverse things about our current permitting regime is that it's often easier for a company to build a private natural gas power plant connected to their data center than it is for the local utility to build a new wind or solar farm. The former can often be done without any kind of discretionary permit at all, whereas the latter goes through a public process in which residents can complain and sue to block the project.
And both are much easier than getting permits for a high voltage transmission line to another region of the country where it might make more sense to build a wind or solar farm.
My town just found out about the forest service’s intent to do some major logging and the truck traffic is way out of spec to the existing roads to the trees.
The scale the data centers want to operate at maybe way out of spec. to the existing infrastructure.
This an ancient road when it turns to dirt that’s VT. The Massachusetts is paved but as the town head of DPW is worried about the weight of the trucks. This road happens to not meet the town standards for construction of new development.
The road might see 200 cars a day. The physics for a logging trucks are beyond the roads capabilities. They may come in spurts. There are no stop signs and none are needed.
How manny times does the snow plow go down that road in the same 5yr period? What's the axle group loading for a snow plow? The same federal maximum as the log truck you say?
The prevalence of dirt roads in VT is an intentional policy decision.
The majority of our power comes from 2 nuclear plants nearby, 8 hydro dams, and renewables. We also have one of the largest pumped storage hydro facilities a few miles away.
A biomass plant harvesting existing timber would only be better if the alternative were building a new coal plant.
This isn’t replacing anything though. We don’t need an extra 1.5GW, so if this project doesn’t go through the alternative will be that we continue moving towards more solar and wind.
Sounds like Tennessee Valley Authority, in which case 50% of your energy mix is fossil fuels and 0% of the biomass plant is fossil fuel and the incremental effect is potentially negative on atmospheric carbon.
That only counts if you grow the trees explicitly for power generation. Burning trees that already existed (as is the plan for the plant I mentioned) is like burning coal, which also removed CO2 from the air in the past.
Trees are part of the active carbon cycle. They grow while taking in CO2, then die and rot while releasing it again. Burning them does the same thing as the second one, which was going to happen on its own.
Coal isn't part of the active carbon cycle. It would stay locked in the ground indefinitely if you didn't dig it up.
Moreover, that plant appears to be getting biomass as compressed pellets from sawmill scrap wood and sawdust, i.e. it's the refuse from trees that were already being logged to make lumber. If they didn't burn it then it would go into a landfill to rot and release the carbon anyway.
That’s not the plant I’m referring to plans to do. They’re planning to bring in 350-500 logging trucks per day.
Sure they will get sawmill scraps if they can, but if built this will be by far the largest biomass reactor in the country. When I did the math there’s not enough available scrap in the entire country to power this thing.
They’ve explicitly stated that they need 5.5 million tons of timber from the surround 250 miles of forest annually.
>Burning them does the same thing as the second one, which was going to happen on its own.
Over 50-100 years for short lived species. And much longer for longer lived species.
So yes better than coal but over the lifetime of anyone alive today it’s essentially the same thing, so it’s only really better than coal if you are looking 100 years into the future and if you stop doing cutting down existing trees at some point.
> When I did the math there’s not enough available scrap in the entire country to power this thing.
Which tracks since it's in England and they're getting pellets from the US, Canada and Europe.
> Over 50-100 years for short lived species. And much longer for longer lived species.
But who is logging old growth trees for biomass?
In if someone is cutting down a tree in a first world country it's generally either because the tree was grown intending to cut it down and they immediately start growing new trees there, or because it's going to be cut down regardless of what you do with the tree because they're removing it in order to make some other use of the land.
Moreover, you can always find that one asshat doing something ridiculous, but the world also generates a lot of scrap wood or cuts down a lot of trees just to clear the land. Burning them to generate electricity is never going to be large proportion of world power generation, but doing it to the extent that the trees were just going to rot anyway seems pretty hard to object to.
> it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
The issue isn't how difficult it is to provision new power, it's that no matter how cheap it will be and how unregulated it will be, datacenters will look to 1) skirt environmental law, and 2) arbitrage cheaper areas that end up being forced to split the price to increase production between the dcs and the locals.
Very large consumers should be required to pay for new production when it's obvious that only them benefit from it, there's absolutely no reason to split the bill with the locals, especially when datacenter have close to zero local economic benefits.
> Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
There's plenty of reason to leave the problem in place. The current regime is corrupt, and energy scarcity benefits entrenched fossil fuel players who are cozy with the administration.
Congress has up until now given its endorsement to all of this. Will a new Congress care? Time will tell.
Aren't most markets fixed supply, at least in the short to medium term? Outside of something like software (where you can just copy paste code and hardware is usually not the limiting factor), there is a ramp-up period between an increased demand and an increased supply. No matter how you want to spin it, a huge increase in energy demand is going to have an increased in energy costs for at least months to years.
It could be both. I think people reasonably state it's data centers driving up prices more than other things because we've power as a mostly fixed supply in many places in the US for a while, and the recent increase in lower income/rural areas had correlated all with data center expansion as opposed to other things like EV adoption, etc...
Thank you for doing the work of keeping in the know on this sort of topic and notifying us all of the bill. I'll check it out and send a letter to my congressmen if it checks out.
BAAJA is massive deregulation of an environmentally harmful industry. Instead of eliminating the few safeguards communities have to protect their local environment and giving corporations the ability to circumvent public health concerns, we should move towards more sustainable energy and cease investing in fossil fuel infrastructure. All BAAJA does is transfer authority from local governments/communities to private developers and corporate interests.
And do we really think that giving corporations more power to make more money is somehow going to lessen the cost for consumers? Have you seen that play out that way in the past two years?
If the cost of capital improvements is divvy'd up among ratepayers, and a huge amount of new generation needs to be built out and amortized over a large period of time, and the datacenters pay less per kWh than the residential consumers, residential rates go up regardless.
There are rural parts of Massachusetts that have run out of natural gas and electric delivery bandwidth. The simplest solution is non-grid connected power and heat generation. Doing this requires no real change in regulation since the power sources are stand alone. Local building codes are the only regulations.
isn't the simplest solution to upgrade the grid? What non-connected power do you envision that isn't natural gas and isn't so expensive you may as well connect it to the grid and upgrade the grid to handle it?
Solar PV and solar thermal. Batteries and insulation. Our population density is very low. More efficient heating would go a long way and the upgrades would help the local trades. Using less is the same as generating more. We could also go micro grid and turn our sewage treatment into anerobic digester and we are surrounded by wind farm. Our entire county would need a wind farm a third the size of cape wind 100k homes.
I’d upgrading the grid made sense I assume National Grid and Berkshire Gas would do it.
Exactly. Nobody ever wants to ask the next question.
Why can't these rural areas just let this outside money build power infra at the drop of a hat?
Rules.
Who's rules?
Well it wasn't the town in the middle of nowhere that got screwed when steel mill closed or the glass cookware plant packed up for Vietnam who wrote the rules that's for sure...
NYT has an op-ed today encouraging BAAJA, but all the comments are ripping it for bias. Notably it seems to strip away protections for historic sites and takes away rights from Indian tribes. Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
I haven't read it, and I do support some level of expediency with grid buildout, but it sounds like it opens the door to ruining cultural landmarks, no prevention of abuse for fossil fuel purposes. Finally, and I mean this honestly: If the administration supports it, it probably is something worth pausing to consider.
> Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
There are plenty of other laws available to prevent various things from happening. The difference is that those need a government prosecutor to initiate a case rather than letting every member of the public file a nuisance lawsuit.
Which they would do in your "someone trying to run HVDC through the Grand Canyon" scenario and any other sufficiently egregious case, but not do when someone is just trying to build a boring wind farm on some boring land they own.
There is too much protection for historic sites (most of which have trivial historical value) and Indian tribes have way too much power to extort money out of infrastructure projects.
It's not their sovereign land, except in the sense that the entirety of the US is 'their land.' Tribes are sovereign over their own land and BAJAA does not change that. It is common for tribes to litigate things outside of their own lands and administered by/for the public, for instance this landmark case https://en.wikipedia.org/wiki/Navajo_Nation_v._United_States...
Their lawyers took the religious objection path perhaps because that might carry greater weight than an environmental protection argument- but at its root this has the look of a watershed issue.
Would you personally be A-OK with tonnes of treated sewerage being dumped upshed from your drinking water extraction point?
Responsible elders / leaders are expected to to do their best to slow roll or stop such changes being made - once it becomes routine its much harder to stop as problems present.
They used Religious Freedom Restoration Act in that case, and didn't even win.
Some cases that have won use RFRA to legally discriminate against minorities by Evangelical Christians. Native Americans bring lawsuits based on their religion over a sacred site and reclaimed water, just like anyone else can, and yet losing "this landmark case" somehow proves they have too much power?
If BAAJA means that data center companies can install jet engine gas turbines to power their needs, people are not going to be happy.
I agree the permitting process has hindered building in America, but I'm not convinced the current regimes in charge can craft legislation that actually helps people. America keeps voting for something new because the last attempt hasn't changed the status quo.
That doesn't say they're gonna put airlines jet engines in datacenters just that the company will make gas turbines for the AI boom, and gas turbines for power generation are everywhere. Nuclear power plants also use turbines.
Not all turbines operate the same. What are you trying to argue or advocate for here? The public has a lot of opposition, better to listen than to tell them they are wrong to feel the way they do
I find their methodology misleading, though. They're basically taking the cost of transmission infrastructure upgrades and then assigning the cost of those upgrades proportional to peak energy demand of the customer base, not the cost of the infrastructure upgrade.
So if, for example, they estimate that residential customer demand will grow by 10%, then they suggest residential customers should only be paying for 10% of transmission infrastructure upgrades.
That's not how infrastructure upgrades work, though. Connecting 100,000 new residential addresses and areas can cost more than a couple data centers that are close to the power station.
The problem is they don't have access to, or at least they didn't look very hard, to find the actual data about transmission line upgrades and how much data centers actually pay to get connected. Contrary to what I see in a lot of the comments here, big customers do actually get billed for their infrastructure upgrade costs after utilities do their analyses. This paper is ignoring the utilities' analyses and substitutes their own highly simplified proportional-to-peak-demand estimates, and that's how they get their headline number.
One very surprising discovery was that they show data center construction incentives to actually be a good deal:
> State incentives for data centers have provided returns on the investments, if inconsistently, the researchers found. Some states, such as California, reaped $180 in worker income for every dollar spent, while Virginia increased income $2 for every dollar invested. The researchers determined that the presence of an existing, qualified workforce was a stronger indicator of high returns than the amount of incentive spending.
That's not what I expected to read.
This is a topic where details basically don't matter for public opinion, though, so I'm not sure it matters. It aligns with what people
I appreciate this if only because most people seem to take things at face value rather than really thinking about the methodology and whether it makes sense or is potentially flawed.
I struggle to understand why data centers are seen as a problem rather than an opportunity. Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
The article discussed this... data centers don't pay for the infrastructure upgrades they need to operate - the majority of that cost gets foisted on the public. They also drive up the wholesale cost of electricity, which means we all pay more for it.
Both are solvable with politicians who can be held accountable. But, in many locations, they aren't accountable and can only be trusted to do what's in the interest of their largest donors.
That's all ignoring the various other externalities... aesthetics, noise, pollution.
But, 100%, if a county/town has an underutilized industrial zone, they should build data centers there. But, it also appears data center developers prefer undeveloped plots. Again, also solvable, but somebody needs to do so.
If a significant part of the build-out is hurting people due to corruption, what are you actually asking for? Should protesters always make sure to add a footnote mentioning that they're only protesting due to the significant likelihood of negative effects due to corruption?
Because if you're asking for them to refocus from data centers to corrupt politicians, I can confidently predict the outcome, and I believe so can you.
This is a regulation problem, not a datacentre problem.
In Aus, when anyone makes an application to connect to the electricity network, you get charged for ALL upstream upgrades to service your load. That might mean new powerlines, new substations upstream etc. That both shifts the load onto the DC operator AND moves them to areas where spare capacity is available.
Similar thing applies for a water connection.
Datacentres still technically drive up spot price for electricity but with the amount of new generation coming online that will even out over time. We're building DCs like crazy here and the average spot price is actually falling.
USA appears to have weird inversion from how things could be done, so obvious logical benefits of building datacenters are flipped into negatives - through tax breaks, incoherent infrastructure spending (industrial clients should be effectively subsidizing the infrastructure!) on top of electrical grid that might benefit from being taken behind the barn.
Once you get rid of "USA is a specially broken place", you're truly left only with noise pollution, which is workable to deal with and its costs can in fact be taken by developer. Hell, existing industrial zones or ex-factory land is normally preferred elsewhere.
It really is a bizarre place to live... it's both the richest nation in the world, but also uniquely broken in many really sad and confusing ways.
Pretty sure unlimited campaign spending (much of it without attribution via dark money) is a major contributor. While not legally bribery, it sure does look like a duck. Not to mention the actual bribery (747s and weddings for Trump being the most obvious examples).
A particular issue is how tax is handled at local government level. On one side the flexibility theoretically allows USA to optimize. In practice... well, not.
A lot of the problems can't happen in popular datacenter-buildout areas in Poland because the local government cannot change anything about taxes nor can it give any sort of tax break and the most sweetheart deal thing you could pull is water pricing and that is also hard to sell. Nationwide rules set which government levels get what part of the taxes levied on the datacenter, and because of how what USA would call "property taxes" are calculated, there's considerable pressure for owner of the DC to get paying tenants to pay for them.
Even at maximum imaginable tax "optimization", a DC is one of the best RoI things a local government can have in Poland
> USA appears to have weird inversion from how things could be done
The US has a corruption problem, which is not exceptional - I don't know what place you're comparing the US to that doesn't give the rich money and the right of way where and when they want.
People say it's a "race to the bottom" without realizing what that implies. It implies that data centers will simply get deals in localities that will not benefit from data centers if other places demand that they at least pay for themselves. Why would that happen? It happens because it will personally benefit the people who have been charged with making the decision.
> Once you get rid of "USA is a specially broken place"
Again, compared to who? You think they'll have an easier time in Europe? You think if they want to build them in Peru that the residents will benefit?
I think you are getting at something here. The benefit piece. The proximity to community. But the society in the US is not structured in a way to make this happen. Municipality is basically a bad word at this point. But imagine localized network, compute, green energy, battery etc.
Because of how certain things are less flexible in many european countries, the required scale of corruption to change the rules the way they apparently are bent in USA specifically on this topic becomes impractical.
Note, I am saying specifically on this topic, I am not saying there are no other kinds of grift available.
But I have done recently a deep dive and for example in Poland, especially in the area around Warsaw, a high power datacenter is literally one of the best investments you can get, and the only real issue is to force the builder to use certain noise abatement technologies to deal with the low-frequency noise.
And while it's a race to the bottom, that does not mean that there are no other variables than price - for example, outside of AI, a large boom in EU datacenter space is due to DORA and NIS2 regulations that place certain requirements on locality and resilience
I agree that datacenters should be treated like industrial sites. Most people wouldn't want a micro oil refinery or machining factory put up 300 meters from their house. Regulate datacenters like we would a factory. Require them to account for their inputs and their waste outputs, and prohibit them if noise levels are too high or if a concentration of them affects the local climate through heat waste.
EDIT in response to the below comment, since I've been throttled:
While I agree on noise, heat output tends to be comparable with a large shopping mall, and they use way less of all other local resources (assuming they are paying market rates for electricity etc. and not some bribe-level "tax break")
Noise requires certain extra investment at building time but can be very much mitigated below 40dB. At mid-scales (12~15 MW usable power) you can have a datacenter pretty much beside residential building and it will be the quieter one.
Any municipality that tries to do this will not get a DC built, and the one next door will promise a 3 year tax abatement or other special privileges to get it instead. It's a race to the bottom thing.
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
Yep they can definitely provide public benefts to a community. Like in Quincy, Washington where data centers built over the last twenty years have [1]:
* Lowered property taxes by 70% by broadening the tax base
* Helped fund a new high school, hospital, fire station, water infrastructure improvements, and parks with taxes
* Directly created 900 new jobs, and created 4-6 times that number of indirect jobs (this is in a town of about 8,500 - so that's significant).
But the data centers have also created headaches for locals like concerns about air pollution, seizing private land under eminent domain to build high voltage power lines, and traffic [2].
So I agree data centers are a potential benefit to a community. But locals should be concerned and getting involved from the early stages to ensure their interests are protected. And vigorous debates, protests, etc should be viewed as part of a healthy democratic process.
tax breaks on top of subsidized infrastructure as the utility companies now invest more in infrastructure and raise the prices for all preexisting clients to pay for it.
Why wouldn’t they search for communities that would charge them the least? And in doing so, we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out IMO. It is considered a matter of national security, right? I could be wrong, so I'm open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of US Dept of Energy. Companies and individuals can operate them, plug into them like self-storage unit business model.
They would be powered by advanced nuclear, solar, etc. with loads of build out across the country (energy transmission, maintenance, etc.).
Why do we need to have power generation at the source (yes, it is cheaper), when we could do a large scale jobs and infrastructure project out of it that would keep folks employed for GENERATIONS! The demand never ends.
It might open up a lot of opportunities to have that level of localized edge compute, and historically speaking our computing and energy requirements have only ever grown. Give as many people (and communities) a stake into the future!
Private businesses benefit, since they build new things on top of this infrastructure. People benefit, because maintaining the infrastructure is a cost that's rolled in. Everyone benefits from it directly or indirectly (end users).
US Gov could print $1T+ bonds for this, and they would actually pay out in far more ways IMO.
> Why wouldn’t they search for communities that would charge them the least?
They would and they should and that's efficient and good. The problem is corruption. If I go to a sandwich shop and tell them that $12 for a ham sandwich is too high, I can go from sandwich shop to sandwich shop, and eventually I will find one at a quality I can tolerate at a price I'm willing to pay (let's say $6.)
But with these corporations and billionaires, we assume that if we ask them to pay $12 for a ham sandwich, or even $6, they'll keep moving until they find a shop that will pay them $12 to take a sandwich. It's simply corruption. What they do is the equivalent of paying the cashier $3 to give them the sandwich and $12 from the till. They're shopping for the cashier that is willing to do it.
Taxes would be great. If a giant new datacenter meant more money in the coffers for schools, roads, and everything else that is funded by local taxes, then that sounds like something that some places would really like to see.
But that's not how it rolls. At least around me, there instead seems to be a pattern of cities and counties of giving datacenter builds tax abatements of multiple decades in length.
And unlike something like a hospital or a steel mill or even a warehouse: After the local service industry and trades boom from the initial construction is over with, there's not much else coming out of these places. They don't provide very much in the form of long-term employment positions.
And beyond that, it's not like we know what the shape of information technology will be 30 years from now. It's certainly shaped very differently today than it was in 1996.
(And yeah, I know. If there were no tax incentives for datacenters in Location A, then they'd just build them in Location B instead. I don't have a problem with this at all, but some folks seem to find that result to be fundamentally unconscionable.)
Skill issue. This is just some of Loudoun County's report on the positive tax impact of data centers.
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
When demand increases and supply remains static, prices go up.
Supply capacity improvements are incentivized by this price increase.
(If the incentive to improve supply capacity were present at the current price level, then those improvements would already be underway regardless of whether the world had ever seen a datacenter or not.)
The problem isn't one of scale, but one of paying for the increased infrastructure. It gets passed along to all customers, not only the ones that caused the increased demand.
Eventually you would expect a lower price, but that's long down the road. In the short run increased demand drives up the price.
Markets based on supply and demand all work like this. Increased demand results in the market price increasing.
Electricity demand eventually becomes fuel demand, which has the same thing: more demand results in increased prices for fuel. Since fuels are broadly substitutable in electricity generation, all fuels increase in price when there's (significant) additional demand for electricity and that tends to increase prices of everything with a significant energy component.
> I struggle to understand why data centers are seen as a problem rather than an opportunity.
There are many reasons to oppose data centers, and not all of them have to do with data centers themselves. For instance: a lot of people don't want AI-driven changes to society tech leaders have decided foist on them. Data centers are the infrastructure for those changes, and a point of leverage against them. E.g. an agent can't take your job if your employer can't afford the tokens due to a data center shortage.
> Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
There's race-to-the-bottom competition as well as skill/experience asymmetry between the local governments and the data center builders. "If you don't give me a tax break, I'll just fine someone who will give it to me. Isn't it better to get a modest benefit than none at all?"
> Cities and counties can charge a high property tax to data centers and the residents can benefit.
My city has had issues with data centers since prior to the whole LLM craze.
The reason? They gave them tax breaks, and later on the town discovered they employ almost nobody. For the amount of land they took up, they give very little back to the community - both in taxes and in employment. It's understandable that residents would prefer the land be used for just about anything else. Even a pollution generating plant.
Sure, I would. In the scope of giant corpo entities, Costco seems like they'd be a decent-enough neighbor to have. They keep short hours: The earliest they're open for regular knuckle-draggers and ruffians is 9:30AM. They're never open after 8:30PM. On weekends, they wrap up by 6:00 or 7:00PM.
Last time I went to Costco, I parked over by the edge of the lot by fences with single-family homes behind them.
It was a busy time of day, but it seemed quiet enough. I remember thinking to myself, "Self, if I lived there, then the first thing I'd do is install a gate in that fence so I could just walk over to Costco."
And I've certainly lived in much noisier neighborhoods with far fewer opportunities to walk around and conduct commerce. I'll take the noise of Costco parking lot traffic over that of a congested 5-way city intersection any day.
Living on a steady diet of $1.50 all-beef hot dogs (with a Coke (with refill!)) probably wouldn't be the healthiest way, but I think I'd find a balance somehow.
The realities of living next to a Costco are a lot different than what you describe here. You don’t seem to realize that semis will keep coming over beyond the hours you describe, the pollution, noise and traffic is way higher than what you describe here and just walking over to Costco sounds nice for a minute but then you realize that it’s huge waste of time to go for smaller shopping trips, and you won’t be making larger trips all the time.
You need to have a much more honest take than this and mention the real downsides if you’re going to say you’ll do it.
My current abode is very near to a US highway with heavy truck traffic, a flour mill, and two busy freight rail lines. Some mornings, everything outside is covered in a dusting of white powder. I keep the windows closed most of the time even in fair weather not because I hate the outdoors, but because the noise is stifling.
The road does calm down late at night, and then the grain trucks begin roaring again promptly at 0400. The trains only sleep on holidays.
And yet: I've resided in noisier places than even this.
Living right next to a Costco and being able to walk over for a hot dog sounds like a fucking dreamscape by comparison and this is a comparison that I feel I'm qualified to make.
And, sure: Costco isn't everything, and I often want only one can of crushed tomatoes today -- not 12.
But adjacent to the parking lot of the same Costco I was referring to earlier is a nice medium-sized grocery store. There's a coffee shop on the corner. A little further out is a Home Depot and an Asian market, along with quick access to an interstate highway for the things that the neighborhood doesn't provide for.
Okay, so what you’re describing is a living condition that is worse than living next to a Costco, and therefore would be okay living next to one, which is fair. Is there a reason why you chose to live exactly where you live, and given an option, would you move to a different place that don’t have the same problems as the current one?
What I’m trying to get at is that while we talk about establishing a new datacenter or Costco or a rail line or a freeway, it often makes the living conditions worse for a group of people than what they live in. Understandably, this is the reason why people do not support them, even if, there was a little more money to be made. I for example would rather pay my full property taxes, than have the air quality, traffic, noise etc. get worse in my neighborhood in exchange for a discount on my taxes. And I’m not in an affluent neighborhood.
> Is there a reason why you chose to live exactly where you live
Sure. Financial reasons are on the surface, but finances are limited by my ability to make my brain work both normally-enough and regularly-enough to satisfy typical employment obligations. Maybe some of this could be alleviated with the availability of better healthcare and healthcare management. And while I'm very proficient at some very complex things, I'm a demonstrated failure at many things that others find easy or basic. Maybe a life coach would be useful (but I can't afford that, either, even if I encabulate the expense as an investment with certainty of positive return).
I make too much money to get meaningful assistance with any of that and nowhere near enough money to move to a quieter neighborhood.
Resultingly, I don't get to choose where to live with any meaningful capacity. The best I can do is seize opportunities when they avail themselves.
The most-recent opportunity brought me to a nice-enough home with lots of indoor space for projects and my own noisemaking, with a decent-sized garage (which is useless for parking in, but whatever). It's in a very loud neighborhood in a small town, but it's what I've been able to sustain in recent years. It's cheaper than an apartment with neighbors left, right, up, and down.
There's a bodega nearby and I can walk there in a couple of minutes. I like the place well-enough, but everything they have (other than addictive things like smokes, beer, and soda) is alarmingly expensive. There's also Kroger that is a good bit further out than I'd prefer to walk with groceries, but it exists. Everything else of meaningful report is in another city.
> given an option, would you move to a different place that don’t have the same problems as the current one?
Yeah, I sure would. Some previous person decided that this house needed lots of windows added, and they're decent-enough windows but they leak noise even when closed and latched. I'm listening to trucks roll by with the Jake break blubbing loudly right now as I write this, interspersed with the sounds of would-be race cars with gutted [whether intentionally or unintentionally] exhaust systems and occasional periods of relative silence.
Except for the hammering. That starts early in the morning and extends until 10:00PM or sometimes later. As I understand it, there's some kind of conveyor that gets stuffed up at the mill and hammering on it (sometimes, ceaselessly) seems like the primary method of keeping it going. Except when they use pneumatic vibrators, instead: Those klaxon-sounding devices come and go in their use periodically. I think they wear them out quickly, and I also think that I've heard them degrade and wear-out in real time.
My tolerance for noise is obviously very well-honed, but it would be nice if it weren't quite so fucking loud outside. The edge of a Costco parking lot wins on quietness in this way, by a wide margin.
> What I’m trying to get at is that while we talk about establishing a new datacenter or Costco or a rail line or a freeway, it often makes the living conditions worse for a group of people than what they live in.
According to my homework, this house was built well after the mill was introduced, and just after the US highway became a deliberate 4-lane concrete-paved monster that ran through the town.
Previous to all of that, and the land being divided up to build many somewhat-big houses on very small lots, it was farmland -- or at least, farmland-adjacent.
Things changed. They didn't necessarily change in the normal order, but they changed.
That particular Costco, too: That area was a center of commerce. It was gridded with residential subdivisions and cul-de-sacs and a proper school, but it was also commercial. There was a mall in that neighborhood. And that mall didn't stand forever, but the folks who really remember a time before it was present are mostly dead by now.
I regularly drive through an area of my own hometown with largely-isolated residential neighborhoods that were constructed because the recently-constructed mall [which is gone now] was nearby along with jobs at a plant a few blocks away [also gone] that made vacuum components before transitioning to semiconductors. My own grandfather played a part in developing much of that housing, largely to the exception of the parts that were instead developed by my own old friend's competing grandfather.
> Understandably, this is the reason why people do not support them, even if, there was a little more money to be made.
I can understand how people would feel that way, but I'm still all-in on living right next to a Costco. Seriously.
A datacenter of the type under discussion: Not so much. If it could manage to be quiet then it'd be kinda-sorta-fine, except they're also enormous and loud (cooling, gas turbines, etc).
I can't walk into a datacenter as I walk and buy a hotdog on my little jaunt to Home Depot to get some lag screws before hitting the Asian market to refill on cheap bamboo chopsticks, canned fish, and red bananas. The proximity of the datacenter presents only an obstacle to me on my path.
It's not a big deal in a car at 35MPH, but it's tiresome as a pedestrian to spend time walking past immense, boring things. The mind wants to engage with something, and there's nothing positive around to engage with while focused on circumnavigating a datacenter.
> I for example would rather pay my full property taxes, than have the air quality, traffic, noise etc. get worse in my neighborhood in exchange for a discount on my taxes. And I’m not in an affluent neighborhood.
That's a reasonable take on datacenters, but: I think you should reconsider this Costco thing that we've been discussing. :)
Actually, yes, I do. That would be very convenient. Then again, I'm a city dweller. My grocery store is one block over, I literally just walk there with a fold-up wagon.
>I struggle to understand why data centers are seen as a problem rather than an opportunity.
Data centers require very little personnel to operate. It chugs a ton of water and electricity while polluting acoustically the surrounding area and basically bringing no jobs
That's exactly what the newly elected Democrat congressmen are proposing. Right now, it's the opposite where they get tax breaks, reap resources (electricity, water), while providing zero benefits to the local communities (jobs or funding).
Yes it's a huge job creation/economics boon as well. The data centers are injecting a lot of money into local economies (many of which have been shrinking) and providing skilled jobs.
The actual issue is that they don't. A 100 MW steel mill might employ ~1000 people and contribute ~$1 billion/year to the economy. A 100 MW data center doesn't need that many people even during construction, and its economic contributions are attributed to the location of corporate offices. As far as local people are concerned, any other use for the electricity would be more valuable than a remotely owned data center.
Well, it's arguably making things worse in rural Texas/Louisiana/etc., so I don't blame them for not wanting the data centers.
Understand that if the data center developers had not been so cartoonishly exploitative in their deal making in these municipalities nationwide, there really wouldn't be that much pushback. NIMBY stuff ultimately gets built all the time, usually because the money offered is just too good. Instead of using their massive amounts of capital, they struck backroom deals with local politicians to get tax credits, pass along infrastructure costs to other parties, and otherwise financially burden the community.
They had the money to go in and do all of this stuff without involving the public beyond the usual permitting processes; they just thought themselves too important to be burdened with having to spend money to make money. It's the "cult of the founder" mindset in action at the infrastructure policy level.
Got any examples of 100 MW steel mills and 100 MW Datacenters that you are comparing here? Would love to see some real side by sides if you actually have any data?
I took the steel mill example from a comparison I made in a Finnish context. Outokumpu's steel mill in Tornio employs ~2000 people directly, plus an unknown number of subcontractors. Its revenues have varied between €3.5 billion/year and €7 billion/year recently, and its average power consumption is ~400 MW.
Nebius is currently building a 310 MW data center in Lappeenranta. The construction phase employs ~700 people, and the finished data center is expected to have ~100 employees.
>Yes it's a huge job creation/economics boon as well
Is it though? Maybe the construction itself but after that running a data center doesn't need that many on-premise people, like it can be in the two digit range which is not a lot at all. And even then on-premise people won't be the highest paid engineer jobs but rather security and technicians.
Two digit range is a lot of people in a rural area with a couple thousand residents. That's probably a double digit % increase in jobs in that community.
Datacenters certainly provide many construction jobs during that phase of the project.
During normal operations though, you would have a handful of technicians, probably a facilities manager and frequent contractor visits, probably onsite security.
The facilities contractors may come from far away for maintenance projects, so maybe you help support local hospitality businesses.
Most of the highly paid work at the datacenter will happen remotely.
Every so often, there will be a hardware refresh, but you probably bring in people from elsewhere to do those, if it doesn't make sense to have the onsite techs do it little by little.
Certainly, there's a lot of equipment installed, and any locality with property tax on business equipment should get value from that. But otherwise, almost any other light industrial business would have more employees.
It is actually terrible at job creation. Data centers don't create many jobs at all, and you could argue through second and third order effects that they are job destroyers.
Data centers simply don't require very many people to operate.
Job destroyers where? Maybe in the glass towers of NYC and SF and elsewhere. Creating even a few dozen jobs in rural communities is a massive improvement and boost to the local economy.
You say so. All I know is rent nearly doubled in my area as soon as construction on the data center began. If that's a what a boon to the economy looks like, I'm not interested.
My power bill has gone up significantly (in Chicago) because we have a really good grid, and relatively cheap power production costs due to investments our tax dollars have gone towards (fun fact 25% of illinois power comes from nuclear, the highest in the country).
Now, I and all my neighbors are being financially punished for these investments, because so many data centers are being built out due to this infrastructure. I have friends who are engineers at the power distribution company who are denied raises and putting in 80+ hour weeks without over time.
I say all this, not to diminish the low income Americans bearing the cost of these data centers, but to point out that its all of us. Its insane how few people are actually benefiting from this, and how simply taxing these data centers appropriately would fix it.
I am not familiar with the actual contracts these companies have, nor the tax policies and breaks they are getting, but its clear to me they are not paying enough. I wouldn't be surprised if these servers are over clocked to hell and back simply because the water and power is cheap.
Data centers account for something like 5% of the increase in electricity costs (Rana, Kaps Wharton/Harvard study).
Of course, the real reason energy prices are rising is that regulatory complexity makes it extraordinarily expensive and risky to build new generation, or even to upgrade transmission. Did you know that an upgrade across an already existing and built out right of way --- just making smaller wires bigger --- requires a full NEPA review?
False analogy. Data centers are consumers not producers. They compete with humans for infrastructure capacity. Companies need to foot the bill for improving infrastructure not humans
Yes, absolutely. What do local residents get out of the data centers?
I remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
>Yes, absolutely. What do local residents get out of the data centers?
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
How many long term jobs for locals do they create after construction? My experience with similar booms in fracking is that you get a lot of out of town workers and some local jobs catering to them for 2-3 years and then it's pretty quiet and the money slows to a trickle once they've built up infrastructure.
DCs need some guards, some highly trained technicians, and that's mostly it, right? maybe 20-30 jobs per? That's not exactly opening up a new major employer like a factory or steel mill.
If you're facing local protests, my suggestion is offer to fund their schools for 5 years with a bond or something like that. Put the company name on a new power plant. It won't take up most of the cost of building and it'll probably get town hall to approve the zoning for you.
That many employees in a community of a few thousand or even 20 thousand is a massive boost to the local economy. Some places these things are being built have had declining populations for decades and haven't had new jobs in as many years as well.
They aren't building steel mills or factories in too many places these days - why do people keep comparing these to data centers as if it's even an option?
All of the data centers I've worked with have had technicians onsite 24/7. There's just a lot of stuff that sometimes needs doing that's easier with someone there.
I'm sure they pull in from outside the area for large jobs like major equipment refreshes or major network changes. But for day to day stuff (and there's always day to day stuff), it's just a couple people. Some days, they're very busy and my lowpri tickets take a long time to get worked, other days my tickets get completed in minutes.
I know some companies are driving towards less intervention with racked hardware and will wait to disturb a rack until several units have failed, but you still need someone to work on those when they hit the threshold. And it's nice to have someone onsite for simple things like replacing a failing cable.
This has been repeatedly debunked. Data centers provide temporary construction jobs, but those jobs are rarely local unless built in a major metropolitan area. Otherwise the data centers are almost completely automated. The Facebook data center near where I live is absolutely massive and employs about 150 people. Its 5 buildings each about a 1000ft long and 2 or 3 stories, if there is nothing underground.
150 employees in a community of a few thousand or even 20 thousand is a massive boost to the local economy. Some places these things are being built have had declining populations for decades and haven't been new jobs in as many years as well.
That is numerically irrational. If a data center consumes enough water and power for a community of 20,000 what do those local residents get in return?
This is numerically simple. How much money do these data centers return to the local community and how much do they cost the local community. It’s a catastrophic net-negative for all parties except the owner and the construction crew.
> Jobs in places where there usually aren't any ... a huge jolt of new economic activity.
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
my understanding is that there are cases where it is not as bad, but by and large - and through history (corporate tax break attractions) - this has not been the case, outcomes are very situational
How many jobs vs how much does the price of power go up? And are they good paying jobs or are they the equivalent of being a 3PL order packer but for swapping drives?
> What do local residents get out of the data centers?
A lot:
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
Datacenters are getting sweetheart tax deals, and likely will pay way less in taxes than the people do because in the great US of A corporations can simply not pay taxes.
Do you have another argument that doesn't rely on trickle-down economics?
Yes, the whole point of giving them a reduction in future taxes is to encourage development in otherwise undesirable land.
You would never build residential development at the threshold of an airport for obvious reasons. So the remaining options are either leave the land undeveloped and get nothing, or build something that doesn't need quiet to generate tax revenue.
I'm not advocating for or against specific tax agreements because that is between the company and local government, who represent the people.
I looked at the linked page of corporate tax rates. Scroll down to the next graph showing corporate tax revenues. US corporate tax revenues are insignificant compared the other countries in the graph.
What they get out of not having the nuclear power plant is not getting unexplained cancer in 10 or 20 years.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
The trouble w/ nuclear power plants isn't that the public hates them, it's that the bond market hates them. Even the sticker price is a little bit too expensive but it usually seems to take several times more money and time to build one than anticipated.
Wind is a thing, batteries are a thing, hydro is a thing...
Maybe all that's still not going to cover you in all cases, but...I'm not anti-nuclear by any means, but my understanding is that the upfront costs are very high and take a long time to recoup even in the best of cases. If it's only used as a backup for when cheaper renewable energy can't be generated or bought I'm not sure if the economics will ever work out anymore.
There's a different between "a thing" and a complete system.
They're still expanding hydro in China because they can tell 2 million people to take a hike and there is nothing they can do about it. I remember reading about how the Glen Canyon dam was going to silt up in 40 years or so back in 1990 and... it did!
A real price for solar energy when you consider batteries for overnight/Dunkelflaut and overbuilding for winter could be 2-3x what people are quoting now... Right about in AP1000 territory.
And yeah, what will really happen is that energy markets will be built around the need of gas turbine peakers who will wind up making almost all the profit in electricity generation even if they are only making 1% of it. By 2050 renewables might be seen as a failed technology the way nuclear was circa 1990, but it might not matter much because India will have a heat event that causes a few million mass causalities and they might decide to use their nuclear weapons to put an end to the fossil fuel age.
... People don't pay directly for either nuclear power plants or datacenters. The closest they come to affecting this is by passing and enforcing zoning regulations.
In any case, most of us would rather have one beating than six, but that doesn't mean we want one beating.
the amount of power needed by datacenters is nothing compared to generation gap. These stories cover up the root cause: in nearly every market, no baseload generation has been added for 15+ years, and is generally declining.
Rates aren't going up because of datacenters. They are going up because no investment has been made for more than 15 years, and we have been offsetting the "crunch" with creative workarounds.
Unfortunately, american idiocies in building datacenters are exported world wide as "memes" resulting in people thinking it's truth about datacenters, instead of being truth about broken politics and tax policies of USA
The good news is that plenty of people and companies have been working the problem of upgrading the US electrical grid for more than a decade before this, and all it would take is a small amount of permitting reform and a fraction of the capital deployed for the AI buildout. Plus you get reduced CO2 emissions for free, especially if we wait for the next Congress to do permitting reform.
I’m lucky enough (/s) to have a regulated, for-profit power company as the only option for electricity. They made $430M in profit this past year and are asking the corporation commission to raise our rates “only” 14% this year. Meanwhile, the cost of electricity they pay to purchase from residential solar is approaching zero.
All such headlines of this formula “x phenomenon disproportionately affects poor people” always shy away from naming the real problem.
The real problem has nothing to do with datacenters. The problem is that in our capitalist society, money equals political influence. So, these negative externalities get put on the people least able to buy political influence. It’s so obvious it’s almost embarrassing to say it out loud, but that’s what it is.
So don’t whine about data centers unless you are seriously ready to do something about capitalism. I’ll be right there with you when you get to that point.
Residents should have voted better. If you've got a politician who isnt making DCs pay for their utilities thats on your poor choice of politician. Its a basic thing that has been solved almost everywhere already. I dont want to go on another 'i hate farmers rant' but seriously these people kick themselves in the nuts repeatedly and then have the gall to blame people in the city who were trying to get these policies implemented.
Here's an interesting coincidence. During 2010-2023, data centers growth was all in crypto farms, a truly ridiculous massive waste of energy. However, that growth played against the West. It diverted capital into ruinous tulip bubbles. It created an alternative to the Western-led financial system and trivialized bypassing sanctions. Yet it got fairly little mainstream coverage.
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
At first blush I'd say the difference in data center growth is significant between the two events, plus there's a much more massive capital inflow to AI datacenters, plus crypto has obvious other things to rail against before you get to noise and water impact.
I'd want to see a lot more evidence for an actual conspiracy than this.
I asked a chatbot to compare the energy expended in mining Bitcoin and on generative AI thus far, and it came up with 900 TWh for Bitcoin and 450 TWh for AI. Granted it might be biased in favor of AI.
The fact that made up issues like water use or waste heat, complete with faked research papers, are being used to push the issue? It does make one suspicious.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.
thats what it kinda feels like to me. My intuition tells me the average non tech person has a very worried view of the future due to AI-- I mean, what industry out there says their industry has a non zero chance of ending life as we know it! So that in mind, people look for reasons to shore up their concerns. Datacenters = AI, therefore they are bad for all these reasons-- Reasons which could be applied to many industries.
I agree with all your points. As with the rest of the anti-AI movement, I think the key is in the likely consequences. Slowing down the buildout and regulating AI in the West won't affect it elsewhere. At best it's tilting at windmills, so I think it's reasonable to suspect the worst.
Increased demand drives up prices under a fixed supply regime. Power is, in many places of the US, something approaching a fixed supply regime. This is not a physical requirement of the universe. It is a policy choice that we have made. I would argue that it is not the data centers driving up power prices, it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
The main problem identified in this article is cost allocation, not rate of deployment. Data centers paid only 38% of the grid costs tied to their growth. Speeding up permitting would simply accelerate this subsidy to data centers, with households paying even more, sooner.
Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years. The problem is that capex deployed to serve data centers is being paid for by households, not that it cannot be deployed.
Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
The bill you cited would fix much of this, but it would do so via provisions forcing data centers to pay for the costs they cause, instead of forcing households to subsidize them.
If your point is “it’s policy,” fine. But the policy causing this is cost allocation, not permitting.
Your comment doesn’t engage with the article’s central finding at all: who pays.
> Data centers paid only 38% of the grid costs tied to their growth.
Data centers pay for electricity under the tariffs utilities charge them. To the extent their demand increases wholesale electricity prices, it's the normal consequence of additional demand competing for constrained supply. In no other market is it standard for the person outbidding to also pay for continuing to provide the service to the person who was outbid. The only reason there is much incremental grid cost is because utilities are legally required to continue serving their residential customers. It seems extremely reasonable for residences to share in some of these costs when getting electricity at a significant discount from market price.
The notion that 'households' are paying for data center electricity is just not what is happening. Maybe residences should get discounted electricity, but again this is a policy question and I'm not sure the best use of the marginal federal dollar.
> Transmission investment driven by new demand grew 17x in five years.
Investment is not transmission built, I don't see how this disproves the well-documented countrywide transmission delays. If anything, it is an indication that we are transmission bottlenecked.
Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built (possibly built with public money as a public utility). Should that additional cost of new generation be shared equally by the datacenter and the community? IMO it should be paid by the datacenter.
> Even if that supply is built, it will be more expensive because it is built at today's prices, not the prices of 20+ years ago when the community's previous generation capacity was built
Much of today's higher prices are attributable to the high cost of the permitting process. If you want the government to fix something, have them fix that.
Moreover, renewable generation isn't actually more expensive. LCoE for solar and wind is now something like $0.06/kWh, which is better than fossil fuels. That doesn't count the storage you'd need to use them for 100% of the grid, but we're nowhere near using them for 100% of the grid so that isn't relevant yet, and using them for e.g. 50% of the grid doesn't really require storage. You can also get a large storage sink "for free" by electrifying transportation, because then you have millions of large batteries that you can charge when cheap generation is available and let them stay at 60% rather than 90% when it isn't.
I love renewable energy as much as anyone I know, but they have some major and well-known problems.
One problem is that they only produce when the sun is shining, or the wind is blowing, etc…. These can be ameliorated with batteries, but that still takes a significant additional expense.
The bigger problem is location. They’re only cost-effective if you put them in the right places, and that’s usually far away from where people want to use that power. Which means you need transmission lines. And those take as long or longer to permit and build as do nuclear or combined-cycle natural gas power plants. These things tend to be delivered in terms of 120 months, or more. Not 120 days, like the datacenter builders want.
There are no quick and easy solutions here. Sure, you can truck in jet engines to use them as generators, but then you have to fuel them, you have to deal with the exhaust and added pollution, you have to deal with the noise, you have to deal with all the extra water you’re going to need to run them, you have to deal with added risk of toxic spills due to all the extra fuel you have to have on-site, you have to deal with added risk of fires because of that fuel, you have to deal with the increased heat island effects of running those engines, etc….
And datacenter builders want to externalize all their costs. This is the one single fundamental problem with them and all other big businesses.
If we make the datacenter builders fully internalize all of their costs, then we won’t have these problems.
How fine grained do you want this to be? The point of cost allocation is that grid upgrades and additional capacity overall benefit everyone - basically that electricity exists as a reliable and relatively cheap commodity to all comers. Especially industrial ones. It more or less enables the modern world.
If you're the last house on your block to upgrade your home service to 200A in order to charge an EV, should you be cost allocated 100% of the distribution transformer upgrade that happened to be needed to service you? After all your neighbors were doing just fine until you wanted more capacity.
How about the new subdivision of 200 homes that requires a regional transmission line upgrade? Does that developer (and thus new - typically younger - homeowners) need to pay for the entire upgrade or should that be split over all the ratepayers? Utilities don't tend to upgrade lines to meet exact current demand - that upgrade is going to be spec'ed to be good for decades of additional growth so the next subdivision next door is going to be effectively getting a free ride.
I agree cost allocation needs to be fair. Part of that is the "last comer" is not the one to bear all the costs of needed upgrades. Otherwise things like rapid EV chargers in office parking lots would never get built.
Cost of generation kind of takes care of itself in a sane market. That's just called a power bill. If it's being priced in a way where one user subsidizes another that simply needs to be fixed. Typically those "subsidies" are going in the other direction though as constant 24x7x365 usage is much cheaper to service than rare correlated demand spikes residential users give you.
The transmission grid is a much harder thing to cost allocate fairly.
Except people are building datacenters that don't provide any marginal utility or jobs to locals, and asking small local communities to increase their collective power cost for no local benefit.
It's unsurprising that those communities see and reject this as a bad deal, that's politics working as intended.
Well, that is true, EVERY SINGLE INDUSTRY THAT USES POWER is paying for AI investments.
So it's way worse, aside from populist "but think of the poor!" it is also actively hurting entire economy, driving prices up everywhere.
The lack of cheap reliable power is actively hurting the entire economy. This stems primarily from the fact the US coasted on the previous generation's (no pun intended) investments in the power grid. At some point you run out of your great grandparents investments into the future. Inertia doesn't last forever.
Care to enlighten us as to what fraction of residential rates that data centers pay?
Care to explain how that fraction counts as "outbidding"?
The billed price per kWh includes the cost of both generation and distribution. Residential customers pay higher distribution costs per kWh because the same mile of residential power lines only carries kW of power instead of MW without correspondingly consuming thousands of times less land or requiring thousands of times less maintenance.
Meanwhile the thing they're outbidding you on is generation.
The theory you can defend can be summarized by an apt name: locust capitalism.
Thanks, exactly the sort of substantive conversation I come to HN for.
> Data centers paid only 38% of the grid costs tied to their growth.
That's not what the article is describing.
What's happening is that price is used suppress demand during the period between when demand increases and when supply responds. That isn't the cost of increasing supply, it's the cost of not having it already. Which is why you want to cause the period between the one and the other to be as short as possible.
> Your claim that supply is effectively fixed also seems false. Transmission investment driven by new demand grew 17x in five years.
The claim that supply is fixed is "false" in the sense that it isn't literally impossible to add new supply. It is, however, much more difficult than it could or should be, which makes the investment cost more and take longer than it otherwise would, and in the meantime people are paying higher prices.
Moreover, "17x" doesn't really mean anything when the base rate started so close to zero. We've been deterring these investments for far too long.
> Real-world data also cuts against you. New York and New England are among the hardest places in the country to build energy infrastructure, yet the study found no clear price increase there from data centers.
New York and New England are among the hardest places in the country to build energy infrastructure which is why the price of electricity there is already high and then you don't get increased demand in the place with high prices since the high prices shift the demand to other locations.
That's not a useful strategy if you want lower prices since the prices are only not going up there because they're already up there.
> Your comment doesn’t engage with the article’s central finding at all: who pays.
We need to distinguish two things here.
The first is, who pays for the actual long-term costs of increasing generation. But that's easy, because that cost isn't actually that high. It's equivalent to the normal pre-existing price of electricity. It might even be less because e.g. solar has gotten pretty cheap and to the extent that you add that, the average generation cost would even go down.
The second is, what happens during the period between when the new demand comes online and when the new generation comes online? But having new data centers "pay" that to keep the short-term price of electricity from going up is not possible, because having the short-term price go up is the thing that suppresses the short-term demand to keep it from exceeding supply. If the price didn't go up in the interim then the demand at the lower price would exceed available supply.
Which brings us back to, what you need is to bring the new generation online as quickly as possible.
In this case the other 62% is only $5.1 billion, which averages out to about $15 per person across the US. Since this is reflected in wholesale electricity prices I assume it is even enough that after accounting for unequal impact, it still isn't that high. It seems like a problem, but not a major one.
That average is a false equivalency since the cost subsidy will be localized to the regional power provider typically the state-run monopoly or some other large provider. It's not an even distribution and the core thesis of the article, that the lower-income folks are the ones subsidizing it, likely still holds because land is historically cheaper and is generally less developed by municipal and state govts when its residents are lower-income and/or a minority population, and local distribution (and costs) impact those with less (usually no) disposable income by which they can improve their household energy efficiency.
This makes no sense because the impact here is increased costs on the utilities which is then passed through as rate increases. Unless lower income people consume more electricity than rich people (doubt) then it doesn't impact them more.
They're saying it's not $15 from each of the $350m people in the US, it's a much larger number from each of the much smaller number of people unlucky enough to share a utility with one of these new data centers.
Well, since it’s “only” $5.1 billion, the trillion dollar valued companies should have no problem paying costs in full rather than seeking subsidies from the hapless taxpayers.
> Congress could fix this problem tomorrow.
Even if congress "fixed" this problem tomorrow it would still take years to build the increased capacity (as you note). Since we do essentially have a fixed supply regime the fast buildout of data centers we've seen over the last few years has indeed been the cause of increased power prices. I'll also add that several renewable power generation projects had been in the works and this administration killed them (even paying a lot of money to kill them).
Congress can’t fix the problem tomorrow. The problem is tied to non-existent distribution infrastructure.
There is new data center project 30 miles outside my city that plans to build a 1000MW natural gas power plant and a 500MW biomass plant that will take millions of acres of forest to sustain (to quite the developer it will burn 350-500 truckloads of logs per day).
If this is an example of the kind of buildout we want to streamline, I say no thanks.
One of the perverse things about our current permitting regime is that it's often easier for a company to build a private natural gas power plant connected to their data center than it is for the local utility to build a new wind or solar farm. The former can often be done without any kind of discretionary permit at all, whereas the latter goes through a public process in which residents can complain and sue to block the project.
And both are much easier than getting permits for a high voltage transmission line to another region of the country where it might make more sense to build a wind or solar farm.
My town just found out about the forest service’s intent to do some major logging and the truck traffic is way out of spec to the existing roads to the trees.
The scale the data centers want to operate at maybe way out of spec. to the existing infrastructure.
https://www.iberkshires.com/story/84456/Town-Residents-Conce...
so from the article, 200 truck trips over 5 years.
we're honestly screwed as a country, funny to see.
This an ancient road when it turns to dirt that’s VT. The Massachusetts is paved but as the town head of DPW is worried about the weight of the trucks. This road happens to not meet the town standards for construction of new development.
The road might see 200 cars a day. The physics for a logging trucks are beyond the roads capabilities. They may come in spurts. There are no stop signs and none are needed.
How manny times does the snow plow go down that road in the same 5yr period? What's the axle group loading for a snow plow? The same federal maximum as the log truck you say?
The prevalence of dirt roads in VT is an intentional policy decision.
Biomass is almost certainly a better form of energy production than whatever your existing energy mix is and it is being villanized, nice.
The majority of our power comes from 2 nuclear plants nearby, 8 hydro dams, and renewables. We also have one of the largest pumped storage hydro facilities a few miles away.
A biomass plant harvesting existing timber would only be better if the alternative were building a new coal plant.
This isn’t replacing anything though. We don’t need an extra 1.5GW, so if this project doesn’t go through the alternative will be that we continue moving towards more solar and wind.
Sounds like Tennessee Valley Authority, in which case 50% of your energy mix is fossil fuels and 0% of the biomass plant is fossil fuel and the incremental effect is potentially negative on atmospheric carbon.
Better how?
More sustainable/co2 neutral/renewable.
Farmed trees are often promoted as being a great fuel, but they do very, very little for enhancing biodiversity.
The UK's largest CO₂ emitter is an ex-coal now-biomass powerplant: https://en.wikipedia.org/wiki/Drax_Power_Station
> Farmed trees are often promoted as being a great fuel, but they do very, very little for enhancing biodiversity.
Wind turbines and hydroelectric dams don't do much for enhancing biodiversity either, which is fine because their purpose is to generate electricity.
> The UK's largest CO₂ emitter is an ex-coal now-biomass powerplant
Only by counting burning biomass as emitting new CO2 while not counting the CO2 it removed from the air from being grown.
That only counts if you grow the trees explicitly for power generation. Burning trees that already existed (as is the plan for the plant I mentioned) is like burning coal, which also removed CO2 from the air in the past.
Trees are part of the active carbon cycle. They grow while taking in CO2, then die and rot while releasing it again. Burning them does the same thing as the second one, which was going to happen on its own.
Coal isn't part of the active carbon cycle. It would stay locked in the ground indefinitely if you didn't dig it up.
Moreover, that plant appears to be getting biomass as compressed pellets from sawmill scrap wood and sawdust, i.e. it's the refuse from trees that were already being logged to make lumber. If they didn't burn it then it would go into a landfill to rot and release the carbon anyway.
That’s not the plant I’m referring to plans to do. They’re planning to bring in 350-500 logging trucks per day.
Sure they will get sawmill scraps if they can, but if built this will be by far the largest biomass reactor in the country. When I did the math there’s not enough available scrap in the entire country to power this thing.
They’ve explicitly stated that they need 5.5 million tons of timber from the surround 250 miles of forest annually.
>Burning them does the same thing as the second one, which was going to happen on its own.
Over 50-100 years for short lived species. And much longer for longer lived species.
So yes better than coal but over the lifetime of anyone alive today it’s essentially the same thing, so it’s only really better than coal if you are looking 100 years into the future and if you stop doing cutting down existing trees at some point.
> When I did the math there’s not enough available scrap in the entire country to power this thing.
Which tracks since it's in England and they're getting pellets from the US, Canada and Europe.
> Over 50-100 years for short lived species. And much longer for longer lived species.
But who is logging old growth trees for biomass?
In if someone is cutting down a tree in a first world country it's generally either because the tree was grown intending to cut it down and they immediately start growing new trees there, or because it's going to be cut down regardless of what you do with the tree because they're removing it in order to make some other use of the land.
Moreover, you can always find that one asshat doing something ridiculous, but the world also generates a lot of scrap wood or cuts down a lot of trees just to clear the land. Burning them to generate electricity is never going to be large proportion of world power generation, but doing it to the extent that the trees were just going to rot anyway seems pretty hard to object to.
> it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
The issue isn't how difficult it is to provision new power, it's that no matter how cheap it will be and how unregulated it will be, datacenters will look to 1) skirt environmental law, and 2) arbitrage cheaper areas that end up being forced to split the price to increase production between the dcs and the locals.
Very large consumers should be required to pay for new production when it's obvious that only them benefit from it, there's absolutely no reason to split the bill with the locals, especially when datacenter have close to zero local economic benefits.
This is true on the assumption of inflexible demand. Flexible demand may change this, especially reducing non-market capacity payments, for instance.
https://nicholasinstitute.duke.edu/publications/rethinking-l...
> Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
There's plenty of reason to leave the problem in place. The current regime is corrupt, and energy scarcity benefits entrenched fossil fuel players who are cozy with the administration.
Congress has up until now given its endorsement to all of this. Will a new Congress care? Time will tell.
Aren't most markets fixed supply, at least in the short to medium term? Outside of something like software (where you can just copy paste code and hardware is usually not the limiting factor), there is a ramp-up period between an increased demand and an increased supply. No matter how you want to spin it, a huge increase in energy demand is going to have an increased in energy costs for at least months to years.
It could be both. I think people reasonably state it's data centers driving up prices more than other things because we've power as a mostly fixed supply in many places in the US for a while, and the recent increase in lower income/rural areas had correlated all with data center expansion as opposed to other things like EV adoption, etc...
Thank you for doing the work of keeping in the know on this sort of topic and notifying us all of the bill. I'll check it out and send a letter to my congressmen if it checks out.
BAAJA is massive deregulation of an environmentally harmful industry. Instead of eliminating the few safeguards communities have to protect their local environment and giving corporations the ability to circumvent public health concerns, we should move towards more sustainable energy and cease investing in fossil fuel infrastructure. All BAAJA does is transfer authority from local governments/communities to private developers and corporate interests.
And do we really think that giving corporations more power to make more money is somehow going to lessen the cost for consumers? Have you seen that play out that way in the past two years?
If the cost of capital improvements is divvy'd up among ratepayers, and a huge amount of new generation needs to be built out and amortized over a large period of time, and the datacenters pay less per kWh than the residential consumers, residential rates go up regardless.
There are rural parts of Massachusetts that have run out of natural gas and electric delivery bandwidth. The simplest solution is non-grid connected power and heat generation. Doing this requires no real change in regulation since the power sources are stand alone. Local building codes are the only regulations.
isn't the simplest solution to upgrade the grid? What non-connected power do you envision that isn't natural gas and isn't so expensive you may as well connect it to the grid and upgrade the grid to handle it?
Solar PV and solar thermal. Batteries and insulation. Our population density is very low. More efficient heating would go a long way and the upgrades would help the local trades. Using less is the same as generating more. We could also go micro grid and turn our sewage treatment into anerobic digester and we are surrounded by wind farm. Our entire county would need a wind farm a third the size of cape wind 100k homes.
I’d upgrading the grid made sense I assume National Grid and Berkshire Gas would do it.
>isn't the simplest solution to upgrade the grid?
On paper, sure.
In reality they'd probably have to secede from the state to do it.
Exactly. Nobody ever wants to ask the next question.
Why can't these rural areas just let this outside money build power infra at the drop of a hat?
Rules.
Who's rules?
Well it wasn't the town in the middle of nowhere that got screwed when steel mill closed or the glass cookware plant packed up for Vietnam who wrote the rules that's for sure...
Why doesn't the simple solution of a superlinear cost curve ever get mentioned?
It's pretty simple: the more you use, the more you pay per unit.
NYT has an op-ed today encouraging BAAJA, but all the comments are ripping it for bias. Notably it seems to strip away protections for historic sites and takes away rights from Indian tribes. Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
I haven't read it, and I do support some level of expediency with grid buildout, but it sounds like it opens the door to ruining cultural landmarks, no prevention of abuse for fossil fuel purposes. Finally, and I mean this honestly: If the administration supports it, it probably is something worth pausing to consider.
> Imagine running HVDC lines through tribal lands, over the Grand Canyon or other historic landmarks - things that would be prevented today that would be legal tomorrow.
There are plenty of other laws available to prevent various things from happening. The difference is that those need a government prosecutor to initiate a case rather than letting every member of the public file a nuisance lawsuit.
Which they would do in your "someone trying to run HVDC through the Grand Canyon" scenario and any other sufficiently egregious case, but not do when someone is just trying to build a boring wind farm on some boring land they own.
Pendulum has swung far too far towards historic preservation over the last half century.
There is too much protection for historic sites (most of which have trivial historical value) and Indian tribes have way too much power to extort money out of infrastructure projects.
> Indian tribes have way too much power to extort money out of infrastructure projects.
They have too much power? On their land?
Separately, Here is their objections for anyone interested
https://narf.org/baaja-reform-bill/
> They have too much power? On their land?
It's not their sovereign land, except in the sense that the entirety of the US is 'their land.' Tribes are sovereign over their own land and BAJAA does not change that. It is common for tribes to litigate things outside of their own lands and administered by/for the public, for instance this landmark case https://en.wikipedia.org/wiki/Navajo_Nation_v._United_States...
Their lawyers took the religious objection path perhaps because that might carry greater weight than an environmental protection argument- but at its root this has the look of a watershed issue.
Would you personally be A-OK with tonnes of treated sewerage being dumped upshed from your drinking water extraction point?
Responsible elders / leaders are expected to to do their best to slow roll or stop such changes being made - once it becomes routine its much harder to stop as problems present.
They used Religious Freedom Restoration Act in that case, and didn't even win.
Some cases that have won use RFRA to legally discriminate against minorities by Evangelical Christians. Native Americans bring lawsuits based on their religion over a sacred site and reclaimed water, just like anyone else can, and yet losing "this landmark case" somehow proves they have too much power?
I didn’t say they have too much power, I said that the land at question is not tribal land, it is federal lands.
> Imagine running HVDC lines through tribal lands
What if they only ran the transmission lines behind their eyesore casinos?
Do property rights end when the stuff on your property is ugly?
Property rights end when you don't own the land and its federal lands administered by & for the public
If BAAJA means that data center companies can install jet engine gas turbines to power their needs, people are not going to be happy.
I agree the permitting process has hindered building in America, but I'm not convinced the current regimes in charge can craft legislation that actually helps people. America keeps voting for something new because the last attempt hasn't changed the status quo.
> data center companies can install jet engine gas turbines to power their needs
Is there a source for this?
https://news.ycombinator.com/item?id=50310902
https://arstechnica.com/gadgets/2026/10/united-airlines-ceo-...
but generally loud gas turbines (don't have to have jet engine lineage)
https://www.usnews.com/news/national-news/articles/2026-04-2...
From the people I talk with, the data centers are not a problem in themselves. It is the irresponsibility around them that is the problem.
That doesn't say they're gonna put airlines jet engines in datacenters just that the company will make gas turbines for the AI boom, and gas turbines for power generation are everywhere. Nuclear power plants also use turbines.
ok... here's another, information is a search away "jet engine data center"
https://www.seattletimes.com/business/old-polluting-jet-engi...
Not all turbines operate the same. What are you trying to argue or advocate for here? The public has a lot of opposition, better to listen than to tell them they are wrong to feel the way they do
The authors shared a replication package with all of the data, which more researchers should do: https://zenodo.org/records/23019736
I find their methodology misleading, though. They're basically taking the cost of transmission infrastructure upgrades and then assigning the cost of those upgrades proportional to peak energy demand of the customer base, not the cost of the infrastructure upgrade.
So if, for example, they estimate that residential customer demand will grow by 10%, then they suggest residential customers should only be paying for 10% of transmission infrastructure upgrades.
That's not how infrastructure upgrades work, though. Connecting 100,000 new residential addresses and areas can cost more than a couple data centers that are close to the power station.
The problem is they don't have access to, or at least they didn't look very hard, to find the actual data about transmission line upgrades and how much data centers actually pay to get connected. Contrary to what I see in a lot of the comments here, big customers do actually get billed for their infrastructure upgrade costs after utilities do their analyses. This paper is ignoring the utilities' analyses and substitutes their own highly simplified proportional-to-peak-demand estimates, and that's how they get their headline number.
One very surprising discovery was that they show data center construction incentives to actually be a good deal:
> State incentives for data centers have provided returns on the investments, if inconsistently, the researchers found. Some states, such as California, reaped $180 in worker income for every dollar spent, while Virginia increased income $2 for every dollar invested. The researchers determined that the presence of an existing, qualified workforce was a stronger indicator of high returns than the amount of incentive spending.
That's not what I expected to read.
This is a topic where details basically don't matter for public opinion, though, so I'm not sure it matters. It aligns with what people
I appreciate this if only because most people seem to take things at face value rather than really thinking about the methodology and whether it makes sense or is potentially flawed.
“If only“ is this your way of signalling that you remain against datacenters?
I struggle to understand why data centers are seen as a problem rather than an opportunity. Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
The article discussed this... data centers don't pay for the infrastructure upgrades they need to operate - the majority of that cost gets foisted on the public. They also drive up the wholesale cost of electricity, which means we all pay more for it.
Both are solvable with politicians who can be held accountable. But, in many locations, they aren't accountable and can only be trusted to do what's in the interest of their largest donors.
That's all ignoring the various other externalities... aesthetics, noise, pollution.
But, 100%, if a county/town has an underutilized industrial zone, they should build data centers there. But, it also appears data center developers prefer undeveloped plots. Again, also solvable, but somebody needs to do so.
That's called corruption, it has nothing to do with data centers specifically
This current bout of corruption is about data centers specifically.
Politicians acting in their own short-term interest is not necessarily called corruption.
Politicians using their position of power for person gain is the definition of corruption.
But you can only _call_ it that when you can prove it.
If a significant part of the build-out is hurting people due to corruption, what are you actually asking for? Should protesters always make sure to add a footnote mentioning that they're only protesting due to the significant likelihood of negative effects due to corruption?
Because if you're asking for them to refocus from data centers to corrupt politicians, I can confidently predict the outcome, and I believe so can you.
This is a regulation problem, not a datacentre problem.
In Aus, when anyone makes an application to connect to the electricity network, you get charged for ALL upstream upgrades to service your load. That might mean new powerlines, new substations upstream etc. That both shifts the load onto the DC operator AND moves them to areas where spare capacity is available.
Similar thing applies for a water connection.
Datacentres still technically drive up spot price for electricity but with the amount of new generation coming online that will even out over time. We're building DCs like crazy here and the average spot price is actually falling.
USA appears to have weird inversion from how things could be done, so obvious logical benefits of building datacenters are flipped into negatives - through tax breaks, incoherent infrastructure spending (industrial clients should be effectively subsidizing the infrastructure!) on top of electrical grid that might benefit from being taken behind the barn.
Once you get rid of "USA is a specially broken place", you're truly left only with noise pollution, which is workable to deal with and its costs can in fact be taken by developer. Hell, existing industrial zones or ex-factory land is normally preferred elsewhere.
"USA is a specially broken place"
It really is a bizarre place to live... it's both the richest nation in the world, but also uniquely broken in many really sad and confusing ways.
Pretty sure unlimited campaign spending (much of it without attribution via dark money) is a major contributor. While not legally bribery, it sure does look like a duck. Not to mention the actual bribery (747s and weddings for Trump being the most obvious examples).
A particular issue is how tax is handled at local government level. On one side the flexibility theoretically allows USA to optimize. In practice... well, not.
A lot of the problems can't happen in popular datacenter-buildout areas in Poland because the local government cannot change anything about taxes nor can it give any sort of tax break and the most sweetheart deal thing you could pull is water pricing and that is also hard to sell. Nationwide rules set which government levels get what part of the taxes levied on the datacenter, and because of how what USA would call "property taxes" are calculated, there's considerable pressure for owner of the DC to get paying tenants to pay for them.
Even at maximum imaginable tax "optimization", a DC is one of the best RoI things a local government can have in Poland
> USA appears to have weird inversion from how things could be done
The US has a corruption problem, which is not exceptional - I don't know what place you're comparing the US to that doesn't give the rich money and the right of way where and when they want.
People say it's a "race to the bottom" without realizing what that implies. It implies that data centers will simply get deals in localities that will not benefit from data centers if other places demand that they at least pay for themselves. Why would that happen? It happens because it will personally benefit the people who have been charged with making the decision.
> Once you get rid of "USA is a specially broken place"
Again, compared to who? You think they'll have an easier time in Europe? You think if they want to build them in Peru that the residents will benefit?
I think you are getting at something here. The benefit piece. The proximity to community. But the society in the US is not structured in a way to make this happen. Municipality is basically a bad word at this point. But imagine localized network, compute, green energy, battery etc.
Because of how certain things are less flexible in many european countries, the required scale of corruption to change the rules the way they apparently are bent in USA specifically on this topic becomes impractical.
Note, I am saying specifically on this topic, I am not saying there are no other kinds of grift available.
But I have done recently a deep dive and for example in Poland, especially in the area around Warsaw, a high power datacenter is literally one of the best investments you can get, and the only real issue is to force the builder to use certain noise abatement technologies to deal with the low-frequency noise.
And while it's a race to the bottom, that does not mean that there are no other variables than price - for example, outside of AI, a large boom in EU datacenter space is due to DORA and NIS2 regulations that place certain requirements on locality and resilience
I agree that datacenters should be treated like industrial sites. Most people wouldn't want a micro oil refinery or machining factory put up 300 meters from their house. Regulate datacenters like we would a factory. Require them to account for their inputs and their waste outputs, and prohibit them if noise levels are too high or if a concentration of them affects the local climate through heat waste.
EDIT in response to the below comment, since I've been throttled:
Noise and heat are outputs of datacenters.
While I agree on noise, heat output tends to be comparable with a large shopping mall, and they use way less of all other local resources (assuming they are paying market rates for electricity etc. and not some bribe-level "tax break")
Noise requires certain extra investment at building time but can be very much mitigated below 40dB. At mid-scales (12~15 MW usable power) you can have a datacenter pretty much beside residential building and it will be the quieter one.
They have no waste output.
Any municipality that tries to do this will not get a DC built, and the one next door will promise a 3 year tax abatement or other special privileges to get it instead. It's a race to the bottom thing.
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
Not true in Memphis. The city is reaping massive new tax revenue despite fighting datacenters
Yep they can definitely provide public benefts to a community. Like in Quincy, Washington where data centers built over the last twenty years have [1]:
* Lowered property taxes by 70% by broadening the tax base
* Helped fund a new high school, hospital, fire station, water infrastructure improvements, and parks with taxes
* Directly created 900 new jobs, and created 4-6 times that number of indirect jobs (this is in a town of about 8,500 - so that's significant).
But the data centers have also created headaches for locals like concerns about air pollution, seizing private land under eminent domain to build high voltage power lines, and traffic [2].
So I agree data centers are a potential benefit to a community. But locals should be concerned and getting involved from the early stages to ensure their interests are protected. And vigorous debates, protests, etc should be viewed as part of a healthy democratic process.
[1] https://dor.wa.gov/sites/default/files/2025-09/AdoptedTabled...
[2] https://www.spokesman.com/stories/2026/jul/26/where-agricult...
In my understanding, if anything, data centers get tax breaks, rather than increased taxes.
tax breaks on top of subsidized infrastructure as the utility companies now invest more in infrastructure and raise the prices for all preexisting clients to pay for it.
Why wouldn’t they search for communities that would charge them the least? And in doing so, we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out IMO. It is considered a matter of national security, right? I could be wrong, so I'm open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of US Dept of Energy. Companies and individuals can operate them, plug into them like self-storage unit business model.
They would be powered by advanced nuclear, solar, etc. with loads of build out across the country (energy transmission, maintenance, etc.).
Why do we need to have power generation at the source (yes, it is cheaper), when we could do a large scale jobs and infrastructure project out of it that would keep folks employed for GENERATIONS! The demand never ends.
It might open up a lot of opportunities to have that level of localized edge compute, and historically speaking our computing and energy requirements have only ever grown. Give as many people (and communities) a stake into the future!
Private businesses benefit, since they build new things on top of this infrastructure. People benefit, because maintaining the infrastructure is a cost that's rolled in. Everyone benefits from it directly or indirectly (end users).
US Gov could print $1T+ bonds for this, and they would actually pay out in far more ways IMO.
> Why wouldn’t they search for communities that would charge them the least?
They would and they should and that's efficient and good. The problem is corruption. If I go to a sandwich shop and tell them that $12 for a ham sandwich is too high, I can go from sandwich shop to sandwich shop, and eventually I will find one at a quality I can tolerate at a price I'm willing to pay (let's say $6.)
But with these corporations and billionaires, we assume that if we ask them to pay $12 for a ham sandwich, or even $6, they'll keep moving until they find a shop that will pay them $12 to take a sandwich. It's simply corruption. What they do is the equivalent of paying the cashier $3 to give them the sandwich and $12 from the till. They're shopping for the cashier that is willing to do it.
Taxes would be great. If a giant new datacenter meant more money in the coffers for schools, roads, and everything else that is funded by local taxes, then that sounds like something that some places would really like to see.
But that's not how it rolls. At least around me, there instead seems to be a pattern of cities and counties of giving datacenter builds tax abatements of multiple decades in length.
And unlike something like a hospital or a steel mill or even a warehouse: After the local service industry and trades boom from the initial construction is over with, there's not much else coming out of these places. They don't provide very much in the form of long-term employment positions.
And beyond that, it's not like we know what the shape of information technology will be 30 years from now. It's certainly shaped very differently today than it was in 1996.
(And yeah, I know. If there were no tax incentives for datacenters in Location A, then they'd just build them in Location B instead. I don't have a problem with this at all, but some folks seem to find that result to be fundamentally unconscionable.)
Skill issue. This is just some of Loudoun County's report on the positive tax impact of data centers.
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
https://www.loudoun.gov/6409/Tax-Revenues-County-Budget
We can label the issue in as many different ways as we wish, but that doesn't somehow excise it. It's still real.
https://www.nbc4i.com/news/local-news/new-albany/new-albany-...
Furthermore, why is it assumed that as power demand and capacity rises, that prices would rise? In every other market prices drop at scale.
When demand increases and supply remains static, prices go up.
Supply capacity improvements are incentivized by this price increase.
(If the incentive to improve supply capacity were present at the current price level, then those improvements would already be underway regardless of whether the world had ever seen a datacenter or not.)
The problem isn't one of scale, but one of paying for the increased infrastructure. It gets passed along to all customers, not only the ones that caused the increased demand.
Eventually you would expect a lower price, but that's long down the road. In the short run increased demand drives up the price.
> In every other market prices drop at scale.
Markets based on supply and demand all work like this. Increased demand results in the market price increasing.
Electricity demand eventually becomes fuel demand, which has the same thing: more demand results in increased prices for fuel. Since fuels are broadly substitutable in electricity generation, all fuels increase in price when there's (significant) additional demand for electricity and that tends to increase prices of everything with a significant energy component.
Because data centers don't operate in the free market, they work on incentives and public funds given by cities and states.
Money is made up. Access to water and clean air are real.
> I struggle to understand why data centers are seen as a problem rather than an opportunity.
There are many reasons to oppose data centers, and not all of them have to do with data centers themselves. For instance: a lot of people don't want AI-driven changes to society tech leaders have decided foist on them. Data centers are the infrastructure for those changes, and a point of leverage against them. E.g. an agent can't take your job if your employer can't afford the tokens due to a data center shortage.
> Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
There's race-to-the-bottom competition as well as skill/experience asymmetry between the local governments and the data center builders. "If you don't give me a tax break, I'll just fine someone who will give it to me. Isn't it better to get a modest benefit than none at all?"
Pollution, resources and increased utility costs to name a few.
> Cities and counties can charge a high property tax to data centers and the residents can benefit.
My city has had issues with data centers since prior to the whole LLM craze.
The reason? They gave them tax breaks, and later on the town discovered they employ almost nobody. For the amount of land they took up, they give very little back to the community - both in taxes and in employment. It's understandable that residents would prefer the land be used for just about anything else. Even a pollution generating plant.
You wouldn't mind listening to this 24/7? https://youtube.com/shorts/EVh2jkuGYps?si=YRxda9gb_wjdhKIv
And why pray tell the datacenter would move to the city that tries to charge them that?
~~bribing~~ lobbying also can do away with the extra money that they should pay
Do you want a costco right next to your house? I believe you could do the same with a Costco, property tax, employment, yada yada
Sure, I would. In the scope of giant corpo entities, Costco seems like they'd be a decent-enough neighbor to have. They keep short hours: The earliest they're open for regular knuckle-draggers and ruffians is 9:30AM. They're never open after 8:30PM. On weekends, they wrap up by 6:00 or 7:00PM.
Last time I went to Costco, I parked over by the edge of the lot by fences with single-family homes behind them.
It was a busy time of day, but it seemed quiet enough. I remember thinking to myself, "Self, if I lived there, then the first thing I'd do is install a gate in that fence so I could just walk over to Costco."
And I've certainly lived in much noisier neighborhoods with far fewer opportunities to walk around and conduct commerce. I'll take the noise of Costco parking lot traffic over that of a congested 5-way city intersection any day.
Living on a steady diet of $1.50 all-beef hot dogs (with a Coke (with refill!)) probably wouldn't be the healthiest way, but I think I'd find a balance somehow.
The realities of living next to a Costco are a lot different than what you describe here. You don’t seem to realize that semis will keep coming over beyond the hours you describe, the pollution, noise and traffic is way higher than what you describe here and just walking over to Costco sounds nice for a minute but then you realize that it’s huge waste of time to go for smaller shopping trips, and you won’t be making larger trips all the time.
You need to have a much more honest take than this and mention the real downsides if you’re going to say you’ll do it.
My current abode is very near to a US highway with heavy truck traffic, a flour mill, and two busy freight rail lines. Some mornings, everything outside is covered in a dusting of white powder. I keep the windows closed most of the time even in fair weather not because I hate the outdoors, but because the noise is stifling.
The road does calm down late at night, and then the grain trucks begin roaring again promptly at 0400. The trains only sleep on holidays.
And yet: I've resided in noisier places than even this.
Living right next to a Costco and being able to walk over for a hot dog sounds like a fucking dreamscape by comparison and this is a comparison that I feel I'm qualified to make.
And, sure: Costco isn't everything, and I often want only one can of crushed tomatoes today -- not 12.
But adjacent to the parking lot of the same Costco I was referring to earlier is a nice medium-sized grocery store. There's a coffee shop on the corner. A little further out is a Home Depot and an Asian market, along with quick access to an interstate highway for the things that the neighborhood doesn't provide for.
Okay, so what you’re describing is a living condition that is worse than living next to a Costco, and therefore would be okay living next to one, which is fair. Is there a reason why you chose to live exactly where you live, and given an option, would you move to a different place that don’t have the same problems as the current one?
What I’m trying to get at is that while we talk about establishing a new datacenter or Costco or a rail line or a freeway, it often makes the living conditions worse for a group of people than what they live in. Understandably, this is the reason why people do not support them, even if, there was a little more money to be made. I for example would rather pay my full property taxes, than have the air quality, traffic, noise etc. get worse in my neighborhood in exchange for a discount on my taxes. And I’m not in an affluent neighborhood.
> Is there a reason why you chose to live exactly where you live
Sure. Financial reasons are on the surface, but finances are limited by my ability to make my brain work both normally-enough and regularly-enough to satisfy typical employment obligations. Maybe some of this could be alleviated with the availability of better healthcare and healthcare management. And while I'm very proficient at some very complex things, I'm a demonstrated failure at many things that others find easy or basic. Maybe a life coach would be useful (but I can't afford that, either, even if I encabulate the expense as an investment with certainty of positive return).
I make too much money to get meaningful assistance with any of that and nowhere near enough money to move to a quieter neighborhood.
Resultingly, I don't get to choose where to live with any meaningful capacity. The best I can do is seize opportunities when they avail themselves.
The most-recent opportunity brought me to a nice-enough home with lots of indoor space for projects and my own noisemaking, with a decent-sized garage (which is useless for parking in, but whatever). It's in a very loud neighborhood in a small town, but it's what I've been able to sustain in recent years. It's cheaper than an apartment with neighbors left, right, up, and down.
There's a bodega nearby and I can walk there in a couple of minutes. I like the place well-enough, but everything they have (other than addictive things like smokes, beer, and soda) is alarmingly expensive. There's also Kroger that is a good bit further out than I'd prefer to walk with groceries, but it exists. Everything else of meaningful report is in another city.
> given an option, would you move to a different place that don’t have the same problems as the current one?
Yeah, I sure would. Some previous person decided that this house needed lots of windows added, and they're decent-enough windows but they leak noise even when closed and latched. I'm listening to trucks roll by with the Jake break blubbing loudly right now as I write this, interspersed with the sounds of would-be race cars with gutted [whether intentionally or unintentionally] exhaust systems and occasional periods of relative silence.
Except for the hammering. That starts early in the morning and extends until 10:00PM or sometimes later. As I understand it, there's some kind of conveyor that gets stuffed up at the mill and hammering on it (sometimes, ceaselessly) seems like the primary method of keeping it going. Except when they use pneumatic vibrators, instead: Those klaxon-sounding devices come and go in their use periodically. I think they wear them out quickly, and I also think that I've heard them degrade and wear-out in real time.
My tolerance for noise is obviously very well-honed, but it would be nice if it weren't quite so fucking loud outside. The edge of a Costco parking lot wins on quietness in this way, by a wide margin.
> What I’m trying to get at is that while we talk about establishing a new datacenter or Costco or a rail line or a freeway, it often makes the living conditions worse for a group of people than what they live in.
According to my homework, this house was built well after the mill was introduced, and just after the US highway became a deliberate 4-lane concrete-paved monster that ran through the town.
Previous to all of that, and the land being divided up to build many somewhat-big houses on very small lots, it was farmland -- or at least, farmland-adjacent.
Things changed. They didn't necessarily change in the normal order, but they changed.
That particular Costco, too: That area was a center of commerce. It was gridded with residential subdivisions and cul-de-sacs and a proper school, but it was also commercial. There was a mall in that neighborhood. And that mall didn't stand forever, but the folks who really remember a time before it was present are mostly dead by now.
I regularly drive through an area of my own hometown with largely-isolated residential neighborhoods that were constructed because the recently-constructed mall [which is gone now] was nearby along with jobs at a plant a few blocks away [also gone] that made vacuum components before transitioning to semiconductors. My own grandfather played a part in developing much of that housing, largely to the exception of the parts that were instead developed by my own old friend's competing grandfather.
> Understandably, this is the reason why people do not support them, even if, there was a little more money to be made.
I can understand how people would feel that way, but I'm still all-in on living right next to a Costco. Seriously.
A datacenter of the type under discussion: Not so much. If it could manage to be quiet then it'd be kinda-sorta-fine, except they're also enormous and loud (cooling, gas turbines, etc).
I can't walk into a datacenter as I walk and buy a hotdog on my little jaunt to Home Depot to get some lag screws before hitting the Asian market to refill on cheap bamboo chopsticks, canned fish, and red bananas. The proximity of the datacenter presents only an obstacle to me on my path.
It's not a big deal in a car at 35MPH, but it's tiresome as a pedestrian to spend time walking past immense, boring things. The mind wants to engage with something, and there's nothing positive around to engage with while focused on circumnavigating a datacenter.
> I for example would rather pay my full property taxes, than have the air quality, traffic, noise etc. get worse in my neighborhood in exchange for a discount on my taxes. And I’m not in an affluent neighborhood.
That's a reasonable take on datacenters, but: I think you should reconsider this Costco thing that we've been discussing. :)
Actually, yes, I do. That would be very convenient. Then again, I'm a city dweller. My grocery store is one block over, I literally just walk there with a fold-up wagon.
I would derive direct and tangible value from a costco nextdoor, not so from a datacenter.
Costco is currently the only business I buy from regularly that I don't have within walking distance. So yes I would love one near me.
Not near you, over the fence, next door. Because a lot of people agree to a lot of things until it’s next door to them.
>I struggle to understand why data centers are seen as a problem rather than an opportunity.
Data centers require very little personnel to operate. It chugs a ton of water and electricity while polluting acoustically the surrounding area and basically bringing no jobs
They don't.
That's exactly what the newly elected Democrat congressmen are proposing. Right now, it's the opposite where they get tax breaks, reap resources (electricity, water), while providing zero benefits to the local communities (jobs or funding).
> What's wrong with that plan?
It's about more than money. People live in rural areas for reasons and data centers are rather antithetical to them.
If you want to know details, listen to those people
Yes it's a huge job creation/economics boon as well. The data centers are injecting a lot of money into local economies (many of which have been shrinking) and providing skilled jobs.
The actual issue is that they don't. A 100 MW steel mill might employ ~1000 people and contribute ~$1 billion/year to the economy. A 100 MW data center doesn't need that many people even during construction, and its economic contributions are attributed to the location of corporate offices. As far as local people are concerned, any other use for the electricity would be more valuable than a remotely owned data center.
Yeah well they aren't building steel mills in rural Texas/Louisiana/etc so this is what we have to work with.
Well, it's arguably making things worse in rural Texas/Louisiana/etc., so I don't blame them for not wanting the data centers.
Understand that if the data center developers had not been so cartoonishly exploitative in their deal making in these municipalities nationwide, there really wouldn't be that much pushback. NIMBY stuff ultimately gets built all the time, usually because the money offered is just too good. Instead of using their massive amounts of capital, they struck backroom deals with local politicians to get tax credits, pass along infrastructure costs to other parties, and otherwise financially burden the community.
They had the money to go in and do all of this stuff without involving the public beyond the usual permitting processes; they just thought themselves too important to be burdened with having to spend money to make money. It's the "cult of the founder" mindset in action at the infrastructure policy level.
Got any examples of 100 MW steel mills and 100 MW Datacenters that you are comparing here? Would love to see some real side by sides if you actually have any data?
I took the steel mill example from a comparison I made in a Finnish context. Outokumpu's steel mill in Tornio employs ~2000 people directly, plus an unknown number of subcontractors. Its revenues have varied between €3.5 billion/year and €7 billion/year recently, and its average power consumption is ~400 MW.
Nebius is currently building a 310 MW data center in Lappeenranta. The construction phase employs ~700 people, and the finished data center is expected to have ~100 employees.
>Yes it's a huge job creation/economics boon as well
Is it though? Maybe the construction itself but after that running a data center doesn't need that many on-premise people, like it can be in the two digit range which is not a lot at all. And even then on-premise people won't be the highest paid engineer jobs but rather security and technicians.
Two digit range is a lot of people in a rural area with a couple thousand residents. That's probably a double digit % increase in jobs in that community.
Datacenters certainly provide many construction jobs during that phase of the project.
During normal operations though, you would have a handful of technicians, probably a facilities manager and frequent contractor visits, probably onsite security.
The facilities contractors may come from far away for maintenance projects, so maybe you help support local hospitality businesses.
Most of the highly paid work at the datacenter will happen remotely.
Every so often, there will be a hardware refresh, but you probably bring in people from elsewhere to do those, if it doesn't make sense to have the onsite techs do it little by little.
Certainly, there's a lot of equipment installed, and any locality with property tax on business equipment should get value from that. But otherwise, almost any other light industrial business would have more employees.
The construction jobs are likely not local but migrant construction workers. The restaurants and hotels my see a bump during construction.
I'm guessing DHS won't be conducting any ICE raids if it's a data center.
Maybe itinerant workers would be better term
Go check out how many people live in some of these places and how many jobs there are. Even 20 additional tech jobs is a massive boost to these areas.
It is actually terrible at job creation. Data centers don't create many jobs at all, and you could argue through second and third order effects that they are job destroyers.
Data centers simply don't require very many people to operate.
Job destroyers where? Maybe in the glass towers of NYC and SF and elsewhere. Creating even a few dozen jobs in rural communities is a massive improvement and boost to the local economy.
You say so. All I know is rent nearly doubled in my area as soon as construction on the data center began. If that's a what a boon to the economy looks like, I'm not interested.
> What's wrong with that plan?
Well, that's not the plan. The plan is massive tax cut, infrastructure built with public money and... that's it!
My power bill has gone up significantly (in Chicago) because we have a really good grid, and relatively cheap power production costs due to investments our tax dollars have gone towards (fun fact 25% of illinois power comes from nuclear, the highest in the country).
Now, I and all my neighbors are being financially punished for these investments, because so many data centers are being built out due to this infrastructure. I have friends who are engineers at the power distribution company who are denied raises and putting in 80+ hour weeks without over time.
I say all this, not to diminish the low income Americans bearing the cost of these data centers, but to point out that its all of us. Its insane how few people are actually benefiting from this, and how simply taxing these data centers appropriately would fix it.
I am not familiar with the actual contracts these companies have, nor the tax policies and breaks they are getting, but its clear to me they are not paying enough. I wouldn't be surprised if these servers are over clocked to hell and back simply because the water and power is cheap.
Data centers account for something like 5% of the increase in electricity costs (Rana, Kaps Wharton/Harvard study).
Of course, the real reason energy prices are rising is that regulatory complexity makes it extraordinarily expensive and risky to build new generation, or even to upgrade transmission. Did you know that an upgrade across an already existing and built out right of way --- just making smaller wires bigger --- requires a full NEPA review?
https://pbs.twimg.com/media/HW8LQnGakAAdlU1?format=jpg&name=...
Datacenters are this generation’s nuclear power plants. Our kids will look back and wonder what we were thinking.
> Datacenters are this generation’s nuclear power plants.
In that case, the accurate analogy would be: Our kids will look back and wonder why we haven't built many more of them.
False analogy. Data centers are consumers not producers. They compete with humans for infrastructure capacity. Companies need to foot the bill for improving infrastructure not humans
I swear the kind of mental gymnastics AI fanatics go thru needs to be studied.
Yes, absolutely. What do local residents get out of the data centers?
I remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
>Yes, absolutely. What do local residents get out of the data centers?
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
How many long term jobs for locals do they create after construction? My experience with similar booms in fracking is that you get a lot of out of town workers and some local jobs catering to them for 2-3 years and then it's pretty quiet and the money slows to a trickle once they've built up infrastructure.
DCs need some guards, some highly trained technicians, and that's mostly it, right? maybe 20-30 jobs per? That's not exactly opening up a new major employer like a factory or steel mill.
If you're facing local protests, my suggestion is offer to fund their schools for 5 years with a bond or something like that. Put the company name on a new power plant. It won't take up most of the cost of building and it'll probably get town hall to approve the zoning for you.
That many employees in a community of a few thousand or even 20 thousand is a massive boost to the local economy. Some places these things are being built have had declining populations for decades and haven't had new jobs in as many years as well.
They aren't building steel mills or factories in too many places these days - why do people keep comparing these to data centers as if it's even an option?
> some highly trained technicians, and that's mostly it, right?
Do they even need the technicians on full time? I feel like those are flown out if something is wrong and otherwise can just monitor remotely?
All of the data centers I've worked with have had technicians onsite 24/7. There's just a lot of stuff that sometimes needs doing that's easier with someone there.
I'm sure they pull in from outside the area for large jobs like major equipment refreshes or major network changes. But for day to day stuff (and there's always day to day stuff), it's just a couple people. Some days, they're very busy and my lowpri tickets take a long time to get worked, other days my tickets get completed in minutes.
I know some companies are driving towards less intervention with racked hardware and will wait to disturb a rack until several units have failed, but you still need someone to work on those when they hit the threshold. And it's nice to have someone onsite for simple things like replacing a failing cable.
A large mega-datacenter, like the ones they appear to be talking about here, do generally have a significant onsite, full time staff.
This has been repeatedly debunked. Data centers provide temporary construction jobs, but those jobs are rarely local unless built in a major metropolitan area. Otherwise the data centers are almost completely automated. The Facebook data center near where I live is absolutely massive and employs about 150 people. Its 5 buildings each about a 1000ft long and 2 or 3 stories, if there is nothing underground.
150 employees in a community of a few thousand or even 20 thousand is a massive boost to the local economy. Some places these things are being built have had declining populations for decades and haven't been new jobs in as many years as well.
That is numerically irrational. If a data center consumes enough water and power for a community of 20,000 what do those local residents get in return?
This is numerically simple. How much money do these data centers return to the local community and how much do they cost the local community. It’s a catastrophic net-negative for all parties except the owner and the construction crew.
> Jobs in places where there usually aren't any ... a huge jolt of new economic activity.
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
I've seen this happening in rural Louisiana with my own eyes and ears.
perhaps you could share a link with us
my understanding is that there are cases where it is not as bad, but by and large - and through history (corporate tax break attractions) - this has not been the case, outcomes are very situational
How many jobs vs how much does the price of power go up? And are they good paying jobs or are they the equivalent of being a 3PL order packer but for swapping drives?
If you have competent utility regulations and competent utility regulators, the price of electricity won't go up.... so maybe we should fix that?
None of those yokels qualify (even if they do). No, you need to bring in h1bs for pennies on the dollar.
> What do local residents get out of the data centers?
A lot:
> Data center revenue has also enabled the Board of Supervisors to fund the needs of Loudoun County Public Schools, including funding budget increases for the schools amounting to tens of millions of dollars year-over-year. This revenue source has also enabled Loudoun County to meet the public safety needs of the community, funding resources for the Sheriff’s Office and Loudoun County Fire and Rescue. Revenue from data centers has also funded many programs and services provided by Loudoun County to the community, including libraries, parks, recreation and community centers, and critical services in the areas of child protection and mental health. The Board of Supervisors has also funded capital improvements, such as schools, roads, bridges, and a broad range of facilities. All of these expenditures were made possible while simultaneously lowering the real property tax rate for homeowners.
https://www.loudoun.gov/6409/Tax-Revenues-County-Budget
Tax revenue from otherwise undesirable land.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
Datacenters are getting sweetheart tax deals, and likely will pay way less in taxes than the people do because in the great US of A corporations can simply not pay taxes.
Do you have another argument that doesn't rely on trickle-down economics?
Yes, the whole point of giving them a reduction in future taxes is to encourage development in otherwise undesirable land.
You would never build residential development at the threshold of an airport for obvious reasons. So the remaining options are either leave the land undeveloped and get nothing, or build something that doesn't need quiet to generate tax revenue.
I'm not advocating for or against specific tax agreements because that is between the company and local government, who represent the people.
Oh, and by the way, not that you'd care given your aggressive tone, but US corporate tax rate is about in line with OECD rates: https://taxpolicycenter.org/briefing-book/how-do-us-corporat...
I looked at the linked page of corporate tax rates. Scroll down to the next graph showing corporate tax revenues. US corporate tax revenues are insignificant compared the other countries in the graph.
What else can we say about these other countries..
Trickle down economics is starting to get schooled in trickle up governance
What they get out of not having the nuclear power plant is not getting unexplained cancer in 10 or 20 years.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
How about everyone living downstream of coal plants?
Coal plants are worse, of course. Thankfully they are so expensive to run that they are being shut down.
You're giving a rational answer to peoples' emotional reaction to some very highly publicized events. That's not going to move their needle.
i don't believe it. where are all the nuclear power plants then? they are unpopular almost everywhere...
The trouble w/ nuclear power plants isn't that the public hates them, it's that the bond market hates them. Even the sticker price is a little bit too expensive but it usually seems to take several times more money and time to build one than anticipated.
Now that renewables are so cheap, nuclear plants are not cost effective and require massive subsidies by the state.
We just had a period of no wind and overcast days in Denmark. And this time of year daylight only lasts for about 8½ hours.
As a result, electricity prices set a new record. At peak my price per kw/h was 22 times higher than it was in the summer. Twenty two times.
Cheap when the sun is shining during the day.
Wind is a thing, batteries are a thing, hydro is a thing...
Maybe all that's still not going to cover you in all cases, but...I'm not anti-nuclear by any means, but my understanding is that the upfront costs are very high and take a long time to recoup even in the best of cases. If it's only used as a backup for when cheaper renewable energy can't be generated or bought I'm not sure if the economics will ever work out anymore.
There's a different between "a thing" and a complete system.
They're still expanding hydro in China because they can tell 2 million people to take a hike and there is nothing they can do about it. I remember reading about how the Glen Canyon dam was going to silt up in 40 years or so back in 1990 and... it did!
A real price for solar energy when you consider batteries for overnight/Dunkelflaut and overbuilding for winter could be 2-3x what people are quoting now... Right about in AP1000 territory.
And yeah, what will really happen is that energy markets will be built around the need of gas turbine peakers who will wind up making almost all the profit in electricity generation even if they are only making 1% of it. By 2050 renewables might be seen as a failed technology the way nuclear was circa 1990, but it might not matter much because India will have a heat event that causes a few million mass causalities and they might decide to use their nuclear weapons to put an end to the fossil fuel age.
The claim being made wasn't that nuclear power is universally popular, just that it is way more popular than datacenters.
People (in the US anyway, ymmv elsewhere) really, really hate datacenters and just vaguely distrust nuclear power (without a lot of conviction).
... People don't pay directly for either nuclear power plants or datacenters. The closest they come to affecting this is by passing and enforcing zoning regulations.
In any case, most of us would rather have one beating than six, but that doesn't mean we want one beating.
the amount of power needed by datacenters is nothing compared to generation gap. These stories cover up the root cause: in nearly every market, no baseload generation has been added for 15+ years, and is generally declining.
Rates aren't going up because of datacenters. They are going up because no investment has been made for more than 15 years, and we have been offsetting the "crunch" with creative workarounds.
It's important to remember that datacenter news is about the countries they're built in.
Not all buildings are built or powered the same way in all countries based on the weather of their location.
American lenses about American Datacenters will be about whats happening in America, not other places.
Unfortunately, american idiocies in building datacenters are exported world wide as "memes" resulting in people thinking it's truth about datacenters, instead of being truth about broken politics and tax policies of USA
The good news is that plenty of people and companies have been working the problem of upgrading the US electrical grid for more than a decade before this, and all it would take is a small amount of permitting reform and a fraction of the capital deployed for the AI buildout. Plus you get reduced CO2 emissions for free, especially if we wait for the next Congress to do permitting reform.
I love how America's first intuition when a booming technology/industry appears is to racketeer as much as possible until it dies. My favorite quote:
>California hasn't built its bullet train because the state has required 130,000 pages of environmental reports, making absurd demands like:
• counting bumblebees one by one • rebuilding woodrat stick huts • hiring specialized dogs to sniff lizard scat
I’m lucky enough (/s) to have a regulated, for-profit power company as the only option for electricity. They made $430M in profit this past year and are asking the corporation commission to raise our rates “only” 14% this year. Meanwhile, the cost of electricity they pay to purchase from residential solar is approaching zero.
All such headlines of this formula “x phenomenon disproportionately affects poor people” always shy away from naming the real problem.
The real problem has nothing to do with datacenters. The problem is that in our capitalist society, money equals political influence. So, these negative externalities get put on the people least able to buy political influence. It’s so obvious it’s almost embarrassing to say it out loud, but that’s what it is.
So don’t whine about data centers unless you are seriously ready to do something about capitalism. I’ll be right there with you when you get to that point.
Residents should have voted better. If you've got a politician who isnt making DCs pay for their utilities thats on your poor choice of politician. Its a basic thing that has been solved almost everywhere already. I dont want to go on another 'i hate farmers rant' but seriously these people kick themselves in the nuts repeatedly and then have the gall to blame people in the city who were trying to get these policies implemented.
Here's an interesting coincidence. During 2010-2023, data centers growth was all in crypto farms, a truly ridiculous massive waste of energy. However, that growth played against the West. It diverted capital into ruinous tulip bubbles. It created an alternative to the Western-led financial system and trivialized bypassing sanctions. Yet it got fairly little mainstream coverage.
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
At first blush I'd say the difference in data center growth is significant between the two events, plus there's a much more massive capital inflow to AI datacenters, plus crypto has obvious other things to rail against before you get to noise and water impact.
I'd want to see a lot more evidence for an actual conspiracy than this.
I asked a chatbot to compare the energy expended in mining Bitcoin and on generative AI thus far, and it came up with 900 TWh for Bitcoin and 450 TWh for AI. Granted it might be biased in favor of AI.
The fact that made up issues like water use or waste heat, complete with faked research papers, are being used to push the issue? It does make one suspicious.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.
thats what it kinda feels like to me. My intuition tells me the average non tech person has a very worried view of the future due to AI-- I mean, what industry out there says their industry has a non zero chance of ending life as we know it! So that in mind, people look for reasons to shore up their concerns. Datacenters = AI, therefore they are bad for all these reasons-- Reasons which could be applied to many industries.
I agree with all your points. As with the rest of the anti-AI movement, I think the key is in the likely consequences. Slowing down the buildout and regulating AI in the West won't affect it elsewhere. At best it's tilting at windmills, so I think it's reasonable to suspect the worst.