Study: Data centers’ power growth likely in handful of states

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(The Center Square) – A handful of companies and a handful of U.S. states – including Ohio – could account for most of the increased electricity demands from the rapid growth of artificial intelligence that could drive up electric power prices, according to a new study by Ohio State University.

Amazon, Microsoft, Google, Meta, Oracle and Apple will consume 75% of the increased demand for electricity to power data centers, the study said.

“The rapid emergence of generative artificial intelligence and large-scale data analytics has driven a sharp expansion of computational demand,” the study said.

Companies tend to build clusters of data centers in areas with strong energy availability, a mature electric grid and fiber-optic infrastructure, favorable climatic conditions and supportive policy environment, the study said.

 “In North America, clusters are concentrated in regions such as Virginia, Texas, Ohio, and North Carolina, which coincide with established hyperscale infrastructure, large electricity markets, and documented policy support for data-center development,” the Ohio State study said.

In areas where clusters are located, there will be an increase in demand for electricity.

“Fewer than 10 regions account for nearly two-thirds of total projected demand, indicating a strong concentration of infrastructure in a limited number of states and countries. Oregon, Virginia, Iowa, Ohio and Ireland emerge as dominant hubs,” according to the study.

Combined annual data center electricity consumption worldwide could increase from about 118 terawatt-hours in 2024 to between 239 and 295 terawatt-hours by 2030, the study concluded.

A key question raised by the study is who will pay for the increased power supply required for data centers.

“For households, farms and businesses, the implications depend partly on whether data center customers cover the infrastructure costs associated with their demand,” Ohio State professor Ani L. Katchova, said in a statement.

If not, consumers and businesses could face higher electric rates, she said.

However, the boom in data centers is also expected to produce a huge windfall in tax revenues.

A study by Bain and Company estimated that the expansion in artificial intelligence could produce nearly $2 trillion a year in revenues by 2030, “equivalent to the combined GDP of the world’s 10 largest emerging economies.”

The Ohio-based Buckeye Institute, a non-profit group, has opposed any moratoriums on new data centers in Ohio, saying that the best choice is to make sure the companies pay for any additional costs.

“While Ohio policymakers should not dismiss legitimate public concerns about data centers, they should reject moratoriums on their construction,” said Aswin Prabhakar, an economic research analyst at The Buckeye Institute. “A better approach would increase transparency, require data center developers to bear the risks and costs of their projects, ensure they pay all their local property taxes, and ensure government regulations address real problems while creating a fair process for project approval.” 

Tax revenue isn’t everything, says a group called Conserve Ohio that has tried to ban construction of large data centers in the state.

“Rushing to replace human workers with AI,” is a downside for society, one of the leaders of Conserve Ohio, Andrew Gula, told The Center Square.

Another is large corporations paving over large swaths of land, Gula said.

Data centers are “dragging us away from renewable energy sources,” Gula added.

“Essentially my whole life climate change has been talked about,” Gula said. “Now it’s all out the window and we’re just putting gas turbines everywhere. No thought for the future, only focus is on AI and the narrative that China is gunning for us.”