UCS Fact Sheet Raises Concerns about Data Center Impacts to the Power Grid

Driven in part by artificial intelligence, California is expected to see significant data center growth over the next decade. Current projections estimate these facilities could add 2 gigawatts of electricity demand by 2030 and 4 gigawatts by 2040-the amount it takes to power 3 million homes at the same time.

Existing ratepayer protections and transparency requirements around data center operations are limited. Without stronger statewide safeguards, electricity customers could bear the costs of rapidly growing energy demand and the infrastructure needed to support it.

Demand from these energy-intensive data centers could increase fossil fuel use or divert renewable energy resources, slowing California's clean energy transition, according to the fact sheet. At the same time, polluting backup diesel generators could worsen air quality and harm public health. In addition, data centers' rapid fluctuations in energy use and potential sudden disconnections from the grid could also rapidly change grid demand, destabilize the grid, and cause a blackout-raising additional reliability concerns.

The fact sheet identifies 19 of California's largest, most energy-intensive data centers, finding that 17 are in the San Francisco Bay Area, with 12 clustered within four square miles in San Jose and Santa Clara. These concentrated data centers strain local electricity infrastructure, and their use of diesel backup generators worsens pollution in an area that struggles with poor air quality, impacting the health of nearby communities.

"California's build-out of energy-intensive data centers is accelerating and happening unevenly across the state," said Mark Specht, co-author of the analysis and a senior manager for the UCS Western States energy program.

The fact sheet recommends California create statewide rules to ensure data centers pay their full costs, support clean energy development, limit fossil-fueled backup generation, and protect grid reliability.

"With the right policies, the state can protect communities from the impacts of nearby data centers and continue advancing toward a reliable, affordable, and clean electricity system," said fact sheet co-author Vivian Yang, the Western States' senior energy analyst.