Strain
However, incredibly, there is as yet no national level guidance on planning for water use by data centres – and the operators themselves have been unwilling to give detailed information.
The industry likes to talk up its use of air-cooling, or to indicate how much of its water is actually recycled. But air-cooling and water recycling create their own additional energy demands. So, a system that uses less water will typically end up using far more energy.
This is becoming a pressing political problem in the US. In parts of Virginia, which today hosts over one-third of the world’s known hyperscale data centres, electricity prices have soared 267 per cent since 2020, driven upwards by the energy demands of the state’s data centres.
Last year, the state narrowly avoided the world’s first “byte blackout” when 20 data centres came offline, creating a surge of mismatched demand and supply in the system that threatened supplies to thousands of households.
It is likely to only be a matter of time before an older energy grid breaks under the new demands. Britain’s grid is one of those older systems under most strain.
Gobbling
The Trump administration recognises this problem, and is solving it in its own inimitable fashion.
Donald Trump hosted the Pennsylvania Energy and Innovation Summit in August, where chief executives from US Big Tech wined and dined with chief executives from US Big Oil – or, nowadays, Big Gas and Big Coal, both of which are being pushed as quick, easy solutions to energy demand from new data centres.
AI chipmaker Nvidia’s CEO has already warned the UK government that new gas generation will be needed here. However, the government’s own Committee on Climate Change does not, as yet, produce forecasts for the impact of data centres on the UK’s carbon budget.
All of this might be justifiable if the economic benefits were clear. They aren’t.
A US-owned data centre might impose significant costs on local residents, gobbling up available water and straining electricity systems.
Regulation
But the profits flow back to its owners. And they create very few jobs. A data centre is, by its nature, a massive stack of computer systems and very few employees are needed for it to run.
BlackRock’s huge £10bn data centre campus in Blyth, Northumbria, is expected to create just 400 full-time jobs – that’s an investment of £25m for each job created. You’re building the energy-guzzling equivalent of 50,000 homes for the jobs-creating equivalent of a high street office block.
And it’s an office block that will rapidly crumble. The chips become obsolete in a few years and need replacing. The building they’re in lasts a little longer.
Without extraordinarily high revenues, very rapidly achieved, a data centre investment will not pay for itself.
The rapid expansion increasingly looks like a classic speculative bubble. What’s needed is tighter regulation, and clearer guidance on the construction and operation of significant data centres. What we are getting is the exact opposite.
This Author
James Meadway is a senior director at Opportunity Green, an NGO working to unlock the opportunities from tackling climate change using law, economics, and policy.