I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
Expanding on that: in competitive electricity markets, in theory, total demand is met by the cheapest plants (by “marginal price”: how much does an additional unit of electricity cost?) that are available.
The marginal price of PV, wind and hydropower is pretty much zero.
The next cheapest are usually older nuclear fission plants and coal power plants.
Then is a huge gap and then come newer nuclear plants and gas fired power plants.
But all of these plants aren’t built over night. So maybe before all of the datacenters, total demand may have mostly been met by renewables and coal and gas power plants only operated a few hundred hours per year. Now, total demand rises and those plants need to operate more often. That’s why the prices rise just because of demand increase. Other effects (e.g. changes in regulation, corporate greed, …) might be at play as well.
Sure, but the companies driving the increased demand should be paying for the increased capacity directly instead of having the general public subsidize it.
No no no! It’s cheaper for them to pay off politicians for special rates and then pass on the cost to the consumer! Won’t you think of the poor billionaires!
Think of the shareholders!
Some AI companies are doing this because the cost of relying on the open market is too high to build in certain areas and the standard of electricity required by the data center may be something that the grid can’t supply.
There are also some countries, like Saudi Arabia, trying to lure data centers into their countries by offering cheap land, permitting, and cheap electricity.
Yeah but the examples I read about also used that strategy to get around state and local regulations for things like renewable energy portfolios.
Good for them if they’re building acres of solar and storage. Bad for us if they’re using diesel generators