A new report from the cloud security experts at Upwind shines a light on the staggering energy demands of America’s data center boom. As the heart of the digital economy, these facilities power everything from cloud storage to AI, but their ravenous appetite for electricity is set to balloon in the coming years. Here’s a breakdown of the findings and what they mean for the future of energy in the United States.
- Las Vegas/Reno: This region is poised to see a mind-boggling 953% increase in data center capacity. To put that in perspective, the energy needs of these new facilities will be enough to power around 3.1 million homes – that’s more than exist in the entire country of Denmark.
- Salt Lake City: A 700% surge in data center capacity is on the horizon for Salt Lake City, driven by the region’s business-friendly environment and access to low-cost energy.
- Phoenix: Phoenix is set to experience a 554% increase in data center capacity, fueled by its proximity to major tech hubs and the availability of land for new construction.
- Atlanta: With a 484% increase projected, Atlanta is emerging as a major player in the data center market. The region’s mild climate and existing IT infrastructure make it an attractive location for companies looking to expand their digital footprint.
- Dallas-Fort Worth: Rounding out the top five, the Dallas-Fort Worth region is expected to see a 355% increase in data center capacity. Its central location and robust power grid make it an ideal spot for data centers serving the southern United States.
Check out the 20 cities surveyed by Upwind, who relied on data from real estate firm JLL.
The Epicenter of Data Center Activity
While these regions are seeing the fastest growth, Northern Virginia stands head and shoulders above the rest when it comes to overall data center capacity. The region is already home to the highest concentration of data centers in the country, and that’s set to continue in the coming years. In fact, the energy needs of Northern Virginia’s data centers are projected to be enough to power nearly 9.1 million homes – almost as many as exist in the entire country of Australia.
The Upside: Economic Growth and Green Energy
While the energy demands of data centers are undeniably massive, there’s also a significant silver lining. These facilities are economic gold mines, injecting hundreds of millions of dollars into local economies and creating thousands of jobs. A typical data center injects about $243.5 million into the local economy, creating 1,688 construction jobs and sustaining 157 permanent roles. Once completed, data centers also contribute around $7.8 million annually in wages and add $1.1 million in tax revenue every year.
Perhaps even more exciting is the potential for data centers to drive the adoption of low-cost, carbon-neutral energy solutions. Tech giants like Microsoft, Google, and Amazon are increasingly turning to nuclear power as a way to sustainably meet the massive energy demands of their data centers while keeping costs stable for consumers. Nuclear energy is carbon-free, reliable, and set to triple in capacity in the United States over the next 25 years. As the demand for AI and cloud services continues to skyrocket, nuclear is poised to play a key role in powering the digital economy of the future while also helping to combat climate change.
The Bottom Line
The data center boom is set to profoundly reshape the energy landscape of the United States in the coming years. While the energy demands of these facilities are undeniably massive, they also represent a major opportunity for economic growth and the adoption of green energy solutions. As the tech industry continues to expand its digital footprint, it will be increasingly important for companies, policymakers, and utilities to work together to ensure that the energy needs of data centers are met in a way that is both sustainable and cost-effective for consumers.
Data Center Capacity Projections
- Northern Virginia: 11,077 MW
- Phoenix: 5,340 MW
- Dallas-Fort Worth: 4,396 MW
- Las Vegas/Reno: 3,812 MW
- Atlanta: 3,125 MW
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