While tech companies and the business community may be bullish on artificial intelligence and data centers, most citizens are feeling more apprehensive, according to a recent Gallup poll. The most common and reasonable objections to data center growth come from those worried about the increased resource consumption and the energy prices associated with it.From a consumer point of view, it’s understandable to see a nearby data center as a giant, ugly building that increases your utility bill to benefit some nebulous company with no impact on your own life. But the discourse around data centers and energy prices doesn’t fully paint the picture; data center growth could actually benefit the energy grid if policymakers respond well.A widely cited Bloomberg analysis shows a causal relationship between data center aggregation and energy prices, and on face value, this makes sense: If your energy supply is stagnant, a massive increase in demand should drive prices up.
THE DATA CENTER DOOMERS MUST BE DEFEATED
In the short term, this is what we see. But a further understanding of market economics demonstrates that an overabundance of demand leads to increased supply. And in spite of the energy monopolies granted in most U.S. states, we see imperfect tracking of this very reality. While energy prices across the board have increased since 2015, states with high energy demand and large data center aggregations actually increase at a slower rate than states with lower energy demand.
