Data Centers: Balancing Digital Growth with Energy and Environmental Responsibility

Posted by Brian Thumann On

Data centers and their buildouts are rapidly becoming critical infrastructure for the world's digital economy—and they bring both opportunity and community concerns.

The explosive growth of AI and AI large language models agents e.g Claude, Grok, others, cloud computing, streaming, connected and autonomous vehicles, e-commerce, text, social media posting, cybersecurity, this blog and millions like it, prediction markets, and everyday digital services is driving massive demand for computing power. Billions of dollars are flowing into new and expanded facilities. The real question is no longer whether to build them, but:

"How do we build the next generation of data centers while protecting energy reliability, controlling consumer energy costs, conserving water, and minimizing environmental and community impacts?"

The Data Center Is Closer Than You Think

Most people never see a data center, yet they use one constantly. On a typical weekend you might order groceries online, check a pet camera or have a GPS enabled collar, navigate with a connected or autonomous vehicle, stream a movie, deposit a check by phone, or ask an AI assistant a question. Every one of these activities generates and relies on vast amounts of data processed in these facilities. A data center may be a hundred miles or thousand miles away but the data (in the cloud) is instantly at your fingertips.

Why So Many Data Centers?

Digital demand is exploding, and AI is accelerating it further. High-performance processors run continuously to train and serve AI models.

According to a Lawrence Berkeley National Laboratory report backed by the U.S. Department of Energy, data centers could account for approximately 11.8% of total U.S. electricity use by 2030 (up from about 4.4% in 2023), with a possible range of 9.5–15.3%.

The Opportunity and the Challenge

Data centers can deliver private investment, construction and tech jobs, tax revenue for the community, demand for clean energy, and grid modernization. But a single large facility can consume as much electricity as a small or mid-sized city and run 24/7 - 365 days a year.  Furthermore, data centers are typically built out on a redundant scale so that if one facility has an issue, there are many backups to keep the information flow going.

For example, Meta’s planned Hyperion data center in Louisiana has a full power annual energy equivalent of about 43.8 TWh—nearly matching New York City’s projected electricity use-hard to imagine, right?. Data Centers that can use as much energy as a city.

Key challenges include:

•  Grid capacity – New substations, physical transmission lines, and new or expanded existing power generation are often required.

•  Cost allocation – Who pays for the infrastructure / power / roads / new power plants or upgrades so residential and small business customers are not unfairly burdened by higher rates and cost recovery fees?

•  Water use – Data center cooling can be thirsty. U.S. data centers directly consumed an estimated 17.4 billion gallons of water in 2023; Google’s Council Bluffs, Iowa facility alone used about 980 million gallons that year. 

•  Land use, noise pollution, and backup power – Large campuses change local character and need reliable backup generation.

Building Smarter Data Centers

One take is to say the solution is not to stop building or scaling up data centers but to build better: more energy efficient, water wise, resilient, and community integrated facilities.  Community outreach and ability to ask questions can lead to a consensus and buy-in that may fast track a project and offer transparency for all those who may be impacted.

Key Points to Consider:  

1. Make energy efficiency a core design requirement at the very beginning go the project.

High efficiency servers, advanced cooling, heat recovery, AI driven facility optimization, and continuous building systems commissioning can deliver big savings when facilities run nonstop.

2. Integrate renewables and energy storage

Data centers are natural customers for solar, wind, geothermal, nuclear, and battery storage. On-site generation plus storage improves this resiliency.

3. Treat the facility as a grid asset

Flexible workloads, demand response, microgrids, and virtual power plants can help the grid rather than just draw from it.

4. Cut water use

Closed loop, air, or advanced liquid cooling dramatically reduces freshwater demand. Microsoft and others have already achieved very low water-usage effectiveness (WUE) figures at many sites. 

5. Choose locations strategically

Prioritize existing grid capacity, renewable resources, water availability, fiber connectivity, and community fit—not just cheap land.

Five Questions Every Community & Policy Makers / Regulators Should Ask

1.  Who pays for the new energy infrastructure?  Should the ultimate end user bear these costs upfront or a percentage so that communities are not shocked by dramatic upticks in their energy bills?  A recent power purchase agreement (PPA) between Constellation Energy and Google will leverage existing generating capacity and add new energy to the region's grid via upgrades.  

2.  How much electricity will the facility actually use—and how might that grow? And, building in a growth factor, as initial load projects may be too low and working with the premise that data is only going to grow and computing power (and energy needs) are expanding at exponential rates.  Example of Microsoft utilizing renewable energy.

3.  How much water will it consume, and what happens in droughts?  Is there technology, even if the first costs are higher, that can lower water needed.  Water rights is often a contentious issue as its is the essence for life.  Different groups have various needs - basic drinking water; farming; other manufacturing processes; recreational usage and so on.  Water savings example.

4.  What measurable energy efficiency (such as Measurement & Verification- M&V based on IPMVP) and renewable commitments is the developer or data center owner making?  How will these initial promises be enforced?

5.  What tangible benefits (new jobs, tax revenue, infrastructure upgrades, STEM programs and educational student grants) does the community receive in return?

Real world examples show both sides: Microsoft’s West Des Moines, Iowa data centers are powered by renewables and are projected to generate over $2 billion in tax revenue while creating hundreds of permanent jobs; community benefit agreements in places like Lancaster, Pennsylvania have secured clean energy requirements, water caps, and local funding. 

The Bottom Line

Data centers are not going away. Our digital lives will keep generating more and more and more data—from pet or home security cameras and grocery orders to autonomous vehicles and AI queries.

The goal is not simply more data centers. It is better ones: more energy efficient, less water dependent, more resilient, more grid friendly (treated as an energy asset), more transparent, and better integrated into the communities that host them.

If we treat data center growth as an energy management and community partnership challenge rather than just a construction challenge, we can support the digital future while strengthening the energy system that powers it.  The data center may be the building of the future. How we power it—and how fairly we share its benefits and burdens—will help shape that future.  Authors note:  The dog in the illustration represents a small example of every day data created by having a GPS collar, a couple of video monitors (stop eating the shoes), as well as frequent pet food and doggie toys ordered online.  

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Helpful Resources to Explore this topic further:

1.  Lawrence Berkeley National Laboratory (LBNL) – United States Data Center Energy Usage Reports (2024 report and 2025 Update)
Authoritative bottom-up modeling of historical and projected U.S. data center electricity consumption (including scenarios through 2030).
https://eta-publications.lbl.gov/publications/2024-lbnl-data-center-energy-usage-report
https://escholarship.org/uc/item/33m6w3x0

2.  International Energy Agency (IEA) – Energy and AI / Electricity reports
Global and regional projections of data centre electricity demand, supply mix, and growth drivers through 2030–2035.
https://www.iea.org/reports/energy-and-ai
https://www.iea.org/reports/electricity-2026

3.  Electric Power Research Institute (EPRI) – Powering Intelligence reports
Updated U.S. scenarios of data center electricity use, capacity growth by state, and power strategies (Low/Medium/High cases to 2030).
https://www.epri.com/research/products/000000003002034696
https://powering-intelligence.epri.com/

4.  RAND Corporation – Optimizing Data Center Siting tool and documentation
Practical suitability mapper for community planners covering power demand, water use, land use, broadband, and local constraints.
https://www.rand.org/pubs/tools/TLA4617-1.html

5.  Congressional Research Service (CRS) – Data Centers and Water: Frequently Asked Questions
Neutral overview of direct vs. indirect water use, sourcing, quality issues, and community-level considerations.
https://www.congress.gov/crs-product/R49057

6.  Congressional Research Service (CRS) – Data Centers and Their Energy Consumption: Frequently Asked Questions
Clear summary of U.S. energy use figures, efficiency programs, and regulatory context.
https://www.congress.gov/crs-product/R48646

7.  U.S. Department of Energy (DOE) / LBNL Center of Expertise for Energy Efficiency in Data Centers
Tools, best practices, and official energy-use analyses supporting federal and industry efficiency efforts.
https://datacenters.lbl.gov/
https://www.energy.gov/articles/doe-releases-new-report-evaluating-increase-electricity-demand-data-centers

8.  Pacific Northwest National Laboratory (PNNL) – Data Center Atlas
Free public interactive map of U.S. data center locations with infrastructure layers (power, water, fiber) and growth projections.
https://im3.pnnl.gov/datacenter-atlas

9.  Ceres – Reports on data centers’ water footprint (direct and indirect via electricity)
Analysis of freshwater use linked to power generation in key states, with projections and water-stress implications.
https://www.ceres.org/ (search for data center water reports; recent coverage available via ESG Dive summaries of the findings)

10.  Uptime Institute – Global Data Center Survey and related intelligence reports
Annual industry survey data on PUE, capacity, cooling, resiliency, AI impacts, and operational trends (practical operator-sourced metrics).
https://uptimeinstitute.com/ (Global Data Center Survey series)

11.  Baker Institute (Rice University) Center for Energy Studies – U.S. Data Centers and Infrastructure interactive map
Layers data centers with transmission, power plants, water stress, electricity/gas prices, media sentiment, and policy data.
https://www.bakerinstitute.org/us-data-centers-and-infrastructure

12.  Data Center Watch
Independent tracking of local opposition, project delays/cancellations, and political risks with fact-based quarterly updates.
https://www.datacenterwatch.org/

13.  GridWatch – U.S. Data Center Transparency map
Free open map of operational, under-construction, and proposed U.S. facilities with emphasis on energy, water, and community impacts drawn from public records.
https://gridwatchmap.com/

14.  Data Center Dynamics (DCD)
Industry news and analysis of real-world project developments, regulatory changes, energy/water issues, and market data (widely used for timely project tracking).
https://www.datacenterdynamics.com/

15.  Data Center Knowledge
Practical coverage of site selection, grid constraints, water transparency rules, community benefit frameworks, and recent project/regulatory developments.
https://www.datacenterknowledge.com/

These sources collectively cover quantitative projections (energy and water), siting tools, community and regulatory impacts, and ongoing project pipelines. Most are free or offer substantial public content; some specialized reports may require registration or purchase for full detail.  PBJ Tech Hub is not responsible for the views, opinions, functionality or data offered via these resource websites and is for informational purposes only.