Data centers are being built in places that restrict renewable energy. There are significant implications for our future energy grid – but it’s unclear if this behavior will lead to tech companies eschewing renewables or finding novel ways to still meet their clean energy commitments.
In the previous edition of The Fight, I began chronicling the data center boom and a nascent backlash to it by talking about Google and what would’ve been its second data center in southern Indianapolis, if the city had not rejected it last Monday. As I learned about Google’s practices in Indiana, I focused on the company’s first project – a $2 billion facility in Fort Wayne, because it is being built in a county where officials have instituted a cumbersome restrictive ordinance on large-scale solar energy. The county commission recently voted to make the ordinance more restrictive, unanimously agreeing to institute a 1,000-foot setback to take effect in early November, pending final approval from the county’s planning commission.
As it turns out, the Fort Wayne data center is not an exception: Approximately 44% of all data centers proposed in Indiana are in counties that have restricted or banned new renewable energy projects. This is according to a review of Heatmap Pro data in which we cross-referenced the county bans and ordinances we track against a list of proposed data centers prepared by an Indiana energy advocacy group, Citizens Action Coalition of Indiana.
This doesn’t necessarily mean the power going to these data centers is consistently fossil. Data centers can take years to construct and often rely on power fed to them from a distributed regional energy grid. But this does mean it would be exceptionally costly for any of these projects to build renewable generation on site, as a rising number of projects choose to do – not to mention that on a macro level, data centers may increasingly run up against the same cultural dynamics that are leading to solar and wind project denials. (See: this local news article about the Fort Wayne data center campus).
Chrissy Moy, a Google spokesperson, told me the Fort Wayne facility will get its power off of the PJM grid, and sent me links to solar projects and hydroelectric facilities in other states on the PJM it has power purchase agreements with. I’d note the company claims it “already matches” all of its global annual electricity demand with “renewable energy purchases.” What this means is that if Google can’t generate renewable energy for a data center directly, it will try to procure renewable energy at the same time from the same grid, even if it can’t literally use that clean power at that data center. And if that's not possible, it will search farther afield or at different times. (Google is one of the more aggressive big tech companies in this regard, as my colleague Emily Pontecorvo details.) Google has also boasted that it will provide an undisclosed amount of excess clean electricity through rights transfers to Indiana Michigan Power when the tech company’s load is low and demand on the broader grid is peaking, as part of Google’s broader commitment to grid flexibility.
I reached out to Tom Wilson, an energy systems technical executive at the Electric Power Research Institute, an industry-focused organization that studies modern power and works with tech companies on flexible data center energy use, including Google. Wilson told me that in Indiana, many of the siting decisions for data centers were made before counties enacted moratoria against renewable energy and that tech companies may not always be knowingly siting projects in places where significant solar or wind generation would be impractical or even impossible. (We would just note that Fort Wayne, Indiana, has an opposition risk score of 84 in Heatmap Pro, meaning it would have been a very risky place to build a renewable energy project even without that restrictive ordinance.) It also indicates some areas may be laying down renewables restrictions after seeing data center development, which is in line with a potential land use techlash.
Wilson told me that two thirds of data centers rely on power from the existing energy grid whereas surveys indicate about a third choose to have at least some electricity generation on site. In at least the latter case, land use constraints and permitting problems really can be a hurdle for building renewable energy close to where data is processed. This is a problem exacerbated when centers are developed near population centers, which Wilson said is frequently the case because companies want to reduce “latency” for customers. In other words, they want to “reduce the time it takes to get answers to people” via artificial intelligence or other data products.
“The primary challenges are the size of the data center and the amount of space it takes to build renewables,” he said. “They are moving from 20 megawatt or 40 megawatt data centers to 100, 200, 300 megawatt data centers. It’s really hard to locate that much renewable [energy] right near a population center. So that requires transmission, and unfortunately right now in the U.S. and in many other countries, transmission takes a significant amount of time to build.”
The majority of data centers are served by regional power grids, Wilson told me. Companies like Google, Meta, and others continue to invest in renewable energy procurement while building facilities in areas that have restricted new solar or wind power infrastructure. In some cases, companies may feel they’re forced to seek these places out because the land is just plain cheap and has existing fiber optic cable networks.
At the same time, there are large data centers getting energy generated on site, and how they each approach their energy sources varies. It’s also not always consistent.
For instance, Meta’s new Prometheus supercluster complex in New Albany, Ohio — potentially the world’s first 1 gigawatt data center — will reportedly have a significant amount of new gas power generation constructed at the facility, even though the company also struck a deal with Invenergy over the summer to procure at least 400 megawatts of solar from two projects in Ohio that already have their permits. One is in Clinton County and was fully permitted but resulted in a years-long fight before the Ohio Power Siting Board and included conservative media backlash. The other is in Franklin County and got its permits in 2021, before a recent wave of opposition against solar projects. Prometheus itself will be sited on the Licking County side of New Albany, where solar has been extremely difficult to build, even though most of this Columbus suburb is in solar-supporting Franklin.
Meanwhile, Elon Musk’s xAI data center notoriously relies on a polluting gas plant in Memphis, Tennessee. The surrounding Shelby County had a solar moratorium until mere months ago that residents want to bring back. An affiliate company of xAI used for the project’s real estate is subleasing land near the data center for a solar farm, but it is unclear right now if it’ll power the data center.
In the end, it really does seem like data centers are being sited in places with renewable energy restrictions. What the data center developers plan to do about it — if anything — is still an open question.
