Yves here. The growing opposition among local politicians to data centers due to their impact on local energy costs signifies a major shift in public sentiment. This situation contrasts with Trump’s often futile attempts to address inflation, even as he showcases his commitment to controlling oil prices. The real question remains: what will happen when state and federal officials can no longer ignore the shift of energy costs from everyday citizens to tech giants?
By Haley Zaremba, a writer and journalist based in Mexico City. Originally published at OilPrice
- The rapid expansion of data centers, driven by the surge in artificial intelligence, is triggering a bipartisan backlash in communities across the United States due to their considerable effects on energy costs and land use.
- Major utilities in the Southeast have projected significant increases in electrical demand, primarily due to data centers, which translate into higher energy bills for consumers and contribute to an energy affordability crisis.
- As resistance grows in the U.S., with communities successfully halting projects, data center developers are increasingly seeking opportunities in Latin American countries.
In times of significant division, a common adversary often brings people together. Today, that adversary is represented by energy-hungry data centers that are driving up energy costs. As the artificial intelligence boom accelerates, the approval of massive data center projects is occurring at an unprecedented pace, prompting affected communities to push back—sometimes uniting across party lines.
Although political debates regarding data centers have yet to surface at the federal or state levels, they are becoming critical topics within local politics, especially in the Southeast where data centers are emerging rapidly. The Institute for Energy Economics and Financial Analysis reports that in Virginia, South Carolina, and Georgia, data centers account for 65% to over 85% of projected load growth for utilities. Consequently, major utilities in these states, including North Carolina, anticipate adding a total of 32,600 MW of electrical load over the next 15 years.
According to a recent analysis by McKinsey, global energy demand from data centers could increase by 19 to 22 percent annually through 2030, resulting in a total annual demand of 171 to 219 gigawatts. “This is a stark contrast to the current demand of 60 GW, indicating a potential significant supply deficit,” McKinsey reported in October 2024. “To prevent this deficit, at least twice the data center capacity that has been constructed since 2000 must be built in less than a quarter of the time,” the report continued.
Ultimately, someone has to cover the costs of this increased energy consumption. Predictably, it won’t be the tech companies that profit from AI integration but instead everyday consumers, who will face higher energy bills due to grids supporting data centers, even if they do not directly benefit from AI.
“We are witnessing a massive transfer of wealth from residential utility customers to large corporations—data centers and their corporate parents, who profit from building additional energy infrastructure,” stated Maryland People’s Counsel David Lapp in a recent interview with Business Insider. “Utility regulation is failing to protect residential customers, exacerbating the energy affordability crisis.”
This affordability crisis is fostering bipartisan opposition to the approval of new data center projects nationwide. In a recent report from a debate in a suburban Virginia county, Semafor noted that opposing candidates found common ground:
“I personally believe we should block all future data centers,” Republican county board candidate Patrick Harders stated. His Democratic counterpart, George Stewart, concurred, asserting that “the overwhelming burden of data centers” constitutes a crisis that unfairly shifts costs onto local residents.
Data centers are not only draining consumer finances; they are also consuming vast areas of land. In Indiana, local residents recently triumphed over Google in its attempt to transform more than 450 acres in a suburb of Indianapolis into a sprawling data center campus. “When a lawyer representing Google confirmed at a September public meeting that the company was withdrawing its proposal, the crowd erupted in cheers,” according to NPR reports. Similar situations are unfolding across the country.
As opposition to data centers intensifies in the United States, developers are turning to Latin America to host their development projects, effectively sidestepping the growing resistance in the U.S. and outsourcing the challenges to nations with fewer resources.
