PHILADELPHIA, PA — The rapid growth of data centers across the United States is intensifying the nation’s energy demands, raising concerns over increased reliance on fossil fuels and the resulting impact on the environment and consumers. A new report, Big data centers, big problems: The surging environmental and consumer costs of AI, crypto and big data, released by Frontier Group, the PennEnvironment Research & Policy Center, and national partners, highlights troubling trends tied to these energy-intensive facilities.
Between 2021 and 2024, the number of data centers in the U.S. surged from 2,667 to 5,381, nearly doubling within three years. This growth is expected to continue, with electricity consumption rising correspondingly. Pennsylvania, home to 71 data centers, already sees these facilities accounting for roughly 3.2% of the state’s total energy use. Neighboring Virginia, a hub for data centers, faces an even more significant burden, with 25% of the state’s energy consumption attributed to such operations.
The report warns that increasing energy demand driven by data centers could prolong the life of aging fossil-fuel power plants. At least 17 coal and gas plants nationwide, which were otherwise slated for closure, have either delayed their retirement or are now under consideration to remain operational. Further exacerbating the problem, 10,808 megawatts of new fossil fuel-powered electricity generation—enough to power approximately 200,000 homes in Pennsylvania—is currently in planning stages to meet rising demand.
Closer to home, the construction of a massive 3-gigawatt data center complex in Upper Burrell, Pennsylvania, is raising alarms. Once operational, it would be one of the largest such facilities in the world, backed by its own dedicated natural gas power generation. Pennsylvania has also seen smaller-scale data centers pop up near fracking sites, including those housing cryptocurrency operations.
“People across the country are trying to square the benefits that technology can bring with the real and growing impacts on the environment and consumers,” said Ellie Kerns, Climate and Clean Energy Advocate with the PennEnvironment Research & Policy Center.
Beyond environmental concerns, data centers also pose financial challenges to utility customers. The report identifies a pattern where the costs of integrating these large energy users onto electric grids are often shifted onto ordinary ratepayers. According to Abe Scarr, energy and utilities program director for U.S. PIRG Education Fund, “Utility customers should not have to pay the price when a big data center sets up shop in their town.”
The authors of the report call for swift policy action to mitigate the negative effects of data center expansion. Specific recommendations include mandating the use of renewable energy for powering these facilities, maximizing on-site energy efficiency, and ensuring that data centers pay for infrastructure upgrades instead of passing these costs to other consumers. Additionally, the report urges increased transparency in data center energy and water use and a careful evaluation of the societal value provided by high-impact computing technologies like artificial intelligence and cryptocurrency.
“New technology can be part of a brighter future, but not if it keeps us tied to the dirty energy sources of the past,” warned Quentin Good, policy analyst with Frontier Group and co-author of the report.
With data center expansion showing no signs of slowing, state and federal policymakers face mounting pressure to ensure the environmental and societal costs of these facilities are addressed before they grow further out of control.
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