Mar 25, 2024 - News

Central Ohio data centers straining the grid

Animated illustration of a glowing data center with four bolts of lightning feeding electricity into it.

Illustration: Brendan Lynch/Axios

Columbus' data center boom may be running out of juice.

Why it matters: Ample, affordable electricity is part of what made the area so attractive to data centers and tech manufacturers in the first place, helping land mega-projects from Intel, Amazon, Facebook and Google.

  • But a 146% expansion of local data center inventory from 2012-2021 has gobbled up much of our excess grid capacity, per a new report by researchers at JLL, a commercial real estate firm that caters to the tech industry.
  • Threat level: The company is warning data center developers that the area's grid capacity will be "constrained" over the next two to three years.

The big picture: Data centers are driving a surge in demand for electricity across the country.

  • The increase is fueled in part by the rapid rise of artificial intelligence, which relies on especially power-hungry computing infrastructure, per the Washington Post.
  • Utilities have doubled their estimates of how much additional electricity they'll need in the near term, per the New York Times, which notes the trend threatens U.S. climate change goals.

Zoom in: AEP Ohio warned PJM, the organization that operates the electric grid in the region, that it's anticipating heavy new demands for electricity between new data centers and Intel's new $20 billion semiconductor plant.

Friction point: To meet that demand, the utility wants to build new transmission lines to New Albany for new Intel, Meta, Google and Amazon facilities.

  • That's drawn pushback from some residents, who complained the project will hurt their property values, per WCMH-TV.

What they're saying: "The energy demand from these large users can be 100 times that of a typical industrial customer," AEP Ohio spokesman Scott Blake told Axios.

  • "The rapid growth is expected to require significant investments in the grid. Utilities, regulators, regional transmission organizations, and new large users will need to work together on solutions."

What we're watching: Grid capacity issues may prompt some companies to consider locating in other parts of the state or country, Brian Marsh, executive managing director at JLL, told Axios. But he said he considers it a short-term hiccup.

  • "While these recent surges of activity have gobbled up land and power, long-term there's still a favorable outlook," he said, given Columbus' positioning compared to other markets.
  • "This demand for growth is not going away."

Editor's note: This story was updated to correct the title and the spelling of the last name of Brian Marsh, executive managing director at JLL.


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