Data centers are booming, but so are their energy and environmental demands. Discover the challenges and opportunities shaping our digital future.

Over the past two decades, rapid advancements in social media, cloud storage, streaming, cryptocurrency mining and artificial intelligence have led to an unprecedented surge in data creation. This surge has also significantly increased data sharing and consumption. Central to managing this vast amount of information are data centers, which facilitate the collection, storage, processing and distribution of data. The growing number of data centers worldwide comes with the need to balance their environmental impact

While the environmental viability of data centers hinges on a variety of factors, there are critical pathways with respect to electricity demand, reliability, technology selection and location.

Unpacking Electricity Demand

A September 2024 analysis by McKinsey & Company estimates that by 2030, U.S. data centers will account for approximately 12% of the total U.S. power demand — an increase of approximately 400 terawatt hours (TWh) from today. To put this into perspective, 400 TWh is roughly 73% of Texas’ net power generation for the entire year of 2023, according to the U.S. Energy Information Administration.

To meet this significant demand, large-scale data centers will require new sources of power generation. Power plants, however, face environmental challenges that necessitate rigorous permitting and oversight, including considerations for water usage and discharge, waste management and, particularly, air emissions.

Required Reliability

Due to these stringent requirements, renewable energy sources are not typically suitable for data centers, even when combined with battery energy storage systems. While renewables may contribute to the overall grid mix, data centers require a firm power supply, making combustion-driven power plants the preferred choice.

Reliability often necessitates redundancy, and some data centers require two power plants to meet this need. The backup plant must be online, synchronized to the grid and ready to be loaded immediately when needed. Although there typically aren’t “redundant emissions” from a backup power plant, there are still many other environmental considerations associated with siting power plants — twice the footprint can come with twice the environmental impact.

Technology Selection

Given the high demand and reliability requirements for energy, many data centers are opting to build their own power sources, primarily large natural gas-fired power plants. Among the available technologies, combined-cycle combustion turbines (CCCTs) are preferred because they produce the most electricity from a given amount of fuel compared to other combustion-driven options.

Before constructing a CCCT to support a data center, a construction air permit must be obtained. This permit is required because a CCCT power plant is a significant source of air emissions, typically emitting more than 100 tons of regulated pollutants per year. Therefore, it must be permitted as a major source of air emissions.

Obtaining a construction air permit for a major source involves a rigorous application process. This includes reviewing and complying with federal and state regulations, performing emission calculations, conducting ambient air quality analyses using dispersion modeling, and applying the best available emissions control technology or the more stringent lowest achievable emission rate, depending on a project’s location.

The nature of the air emissions from these power plants and the operational constraints needed to satisfy the air regulatory approval process can further complicate the design and viability of building a power plant to serve a data center.

Optimal Location

Data centers and their associated power plants are not well suited for all geographical areas. Several key factors determine an optimal location, such as:

• Climate. Data center equipment and servers generate a large amount of heat, requiring substantial cooling to protect assets and maintain reliability. Warmer climates demand more cooling, often achieved through air (i.e., fans) or liquid heat transfer media.
• Water Access. When water is used as the cooling medium, access to large amounts of water and a viable discharge location is critical. A study published in “Environmental Research Letters” in May 2021 found that U.S. data centers directly or indirectly draw water from 90% of U.S. watersheds. This trend is expected to increase with ongoing data center development.
• Fuel Access. CCCTs require access to fuel, making proximity to natural gas pipeline infrastructure essential. Even relatively short natural gas pipelines can have significant environmental impacts, increasing the permitting burden and the risk of obtaining all necessary approvals.
• Noise. Data centers generate significant noise pollution from servers and cooling fans. The National Institute for Occupational Safety and Health recommends limiting exposure to occupational noise to 85 A-weighted decibels (dBA) over an eight-hour period. Data center noise levels often exceed 90 dBA, equivalent to a running lawnmower, and can be heard from a quarter mile or more away. Residents near data centers have reported headaches, vertigo, nausea, difficulty sleeping, ear pain and hypertension. Consequently, some developers target rural areas with low populations and affordable land.

A Resilient Future

Like any emerging technology, the future of the environmental impact and regulatory burden of data centers is uncertain. These centers and their associated CCCT power plants will likely face shifts in regulatory obligations with changing administrations and challenges related to decarbonization efforts, such as carbon capture and sequestration and the use of low-carbon fuel sources.

The varying constraints of these massive projects, which have the potential to impact the environment, play a critical role in their viability. Despite these challenges, data centers are essential for managing the ever-increasing volume of data in our digital age. Their continued development and optimization will be crucial in supporting a data-driven future.

Meet the Expert

Kendalle Martin is an air quality specialist who has worked in the refining, petrochemical and power generation industry projects at POWER Engineers, a member of WSP. Her experience includes compliance with a multitude of federal and Texas rules, stack testing, New Source Review and Title V air permitting and wastewater permitting.