Energy and AI: Evaluating Future Grid and Water Stress Due to Data Centers

Projections of the need for new data centers to support Artificial Intelligence (AI) are large but highly uncertain. Recent projections indicate up to a 15% annual growth rate in data center electricity demand within the next 5-10 years. Given that most electric utilities are required to have a reserve margin of roughly the same magnitude as the projected growth in demand, these new data center loads could soon threaten resource adequacy and reliability unless data centers build their own generation, interruptible loads are negotiated, commensurate new capacity and/or transmission is built, or some combination of these options. Similarly, depending on the cooling technology and geographic location of new data centers, they could threaten water adequacy in water scarce regions. This presentation highlights the grid and water implications of new data centers to support AI.