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The True Cost of Data Centers

Accepted submission by hubie at 2024-11-28 04:08:16
Business

New filing shows electricity demand would be flat without the industry [virginiamercury.com]:

Ever since data centers started spreading across the Virginia landscape like an invasive pest, one important question has remained unanswered: How much does the industry's insatiable demand for energy impact other utility customers? Under pressure from the SCC [Virginia State Corporation Commission], this month Dominion Energy Virginia finally provided the answer we feared: Ordinary Virginia customers are subsidizing Big Tech with both their money and their health.

Dominion previously hid data centers among the rest of its customer base, making it impossible to figure out if residents were paying more than their fair share of the costs of building new generation and transmission lines. Worse, if data centers are the reason for burning more fossil fuels, then they are also responsible for residents being subjected to pollution that is supposed to be eliminated under the 2020 Virginia Clean Economy Act (VCEA). The VCEA [virginia.gov] calls for most coal plants in the state to be closed by the end of this year – which is not happening – and sets rigorous conditions before utilities can build any new fossil fuel plants.

[...] Even before the 2024 IRP was filed, though, the SCC directed the utility to file a supplement. It was obvious the IRP would project higher costs and increased use of fossil fuels. How much of that, the SCC demanded to know, is attributable to data centers?

A lot, as it turns out. Though Dominion continues to obfuscate key facts, the document [virginia.gov] it filed on November 15 shows future data center growth will drive up utility spending by about 20%. Dominion did not take the analysis further to show the effect on residential rates.

The filing also shows that but for new data centers, peak demand would actually decrease slightly over the next few years, from 17,353 MW this year to 17,280 MW in 2027, before beginning a gentle rise to 17,818 MW in 2034 and 18,608 MW in 2039.

In other words, without data centers, electricity use in Dominion territory would scarcely budge over the next decade. Indeed, the slight decrease over the next three years is especially interesting because near-term numbers tend to be the most reliable, with projections getting more speculative the further out you look.

Surprised? You're not alone. We've heard for years that electric vehicles [virginiamercury.com] and building electrification will drive large increases in energy demand. When Dominion talks about the challenges of load growth, it cites these factors along with data centers, suggesting that ordinary people are part of the problem. We're not.

[...] In addition to showing what the energy mix might look like without data centers, the SCC directed Dominion to identify which of its approximately 200 planned transmission projects were needed solely because of data centers. The 4-page table in Dominion's supplemental filing reveals that about half of the projects are solely data center-driven, with two or three dozen more serving a mix of customers that includes data centers. I tried to add up the numbers but lost track at a billion dollars' worth of projects needed solely for data centers – and I was still on the second page.

[...] Still, most of the data center growth lies ahead of us, as does Dominion's plans for new fossil fuel and nuclear generation. With state leaders avidly chasing more data centers in the name of economic development, ordinary Virginians are left to watch the assault on their energy supply, their water, and their environment and wonder: Is anyone going to fix this?


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