SAN DIEGO — The volume of data center load growth in the U.S. will depend on how things play out in the broader economy, a Google representative told a gathering of Western state energy officials Oct. 23. 

“You should really think about data center demand as sort of an aggregation of the demand for digital services throughout the economy, and this demand is large and growing,” Dylan Sullivan, energy market development strategic negotiator at Google, said during a panel discussion on large loads at the fall joint meeting of the Committee on Regional Electric Power Cooperation and Western Interconnection Regional Advisory Body (CREPC-WIRAB) in San Diego. 

Sullivan kicked off his comments by asking audience members to raise their hands if they’d worked on a shared document or streamed video in the past week — or checked email within the past 15 minutes. 

“That’s everybody,” he said to laughter. “Well, then you used a data center.” 

Sullivan ticked off a list of Google’s online services, from Maps to YouTube to Gmail. He said Google Cloud provides computing services to hospitals, local governments, schools and “some of America’s fastest-growing companies” — including 70% of generative artificial intelligence companies, valued at more than $1 billion. 

As a result, Google’s global electricity consumption reached 25 TWh in 2023 — “equivalent to a North Dakota-sized state” and more than double its 2019 consumption. But he didn’t provide specific figures for Google’s demand in the U.S. or the West. 

And utility commissioners couldn’t pin him down on the company’s projections for future growth in data center load. 

Washington Commissioner Milt Doumit noted the share of U.S. electricity consumption from all data centers is expected to grow from 4% today to 9% by 2030. 

“What is your modeling [showing]? What is growth going to look like beyond 2030, if you can tell us?” Doumit asked Sullivan. 

“There’s some things that we just don’t know the answer to, and I think putting more provisions in place to put more of this forecast uncertainty onto large users is an important way to understand how much we can expect over time, but we don’t know the path of [the use of data] visualization and artificial intelligence in our economy,” Sullivan said. 

Sullivan noted that Google has three operating data centers in the West, including in The Dalles, Ore., and Storey County and Henderson, in Nevada, with another under construction in Mesa, Ariz., near Phoenix.  

Colorado Public Utility Commission Chair Eric Blank, the panel moderator, asked why companies such as Google are locating data centers in an increasingly heat-stressed area like Arizona, which has seen two straight summers of recording-breaking averages for daytime and overnight temperatures. 

Sullivan said the decision largely comes down to the location of its growing segment of cloud-based computing customers. 

“Basically, you click the mouse on a laptop, [and] you see the impact of that right on your screen,” he said. “If that computer were 200 miles away from you, you would notice the difference and not like it. And cloud customers are the same, so that they have certain requirements for latency [in computing]. They want ‘compute’ to be close to where they are.” 

In working with electricity and water utility Salt River Project (SRP) to supply the Mesa data center, Sullivan said Google determined its draw on the local water supply would be unsustainable, so it instead chose to air-cool the facility, which caused “a bit of an energy penalty.” 

“But we have a mix of resources through SRP that gets us to a very high percentage of renewable energy around the clock now, on a 24/7 basis,” he said.  

Real or Hype?

A recurring question during the panel and among attendees who spoke with RTO Insider at the CREPC-WIRAB meeting was whether the extreme projections for data center load growth are “real” or a speculative overestimate stemming from either hype or the fact that data center companies could be shopping multiple utility service areas for the same proposed facility, causing double-counting across utility load forecasts. 

“We don’t know how much the demand is real,” Sullivan said. He explained that when Google developed its first data center in The Dalles, the company was growing at a time when it was “soaking up” excess energy capacity on the grid, just as overall economic growth in the U.S. was decoupling from its historical connection with parallel increases in electricity use. 

“But now, with the onshoring of manufacturing, electrification [and] with data center demand, capacity is now tight, and that creates a problem for the industrial site selectors, where the time it takes to energize a site is lengthening,” he said. “And there’s uncertainty about the ability to interconnect the site, and that’s led to a natural response of people essentially filing multiple requests” for the same data center plan. 

“Here’s my take on it: The load is real. It’s a question of what’s the actual volume,” said Brian Cole, vice president of resource management at Arizona Public Service (APS). “It’s hard to see where there’s overlap and where there’s not. That makes it difficult.”  

Cole said APS has created a new data center strategy team to deal with the issue. He said the utility “literally” is having daily conversations with data center companies. 

“We’re trying to learn from them, trying to understand what they need, trying to work with them, [and] trying to establish what is the best path forward,” he said. “Regardless of the path and how we do it, the reality is it’s going to require a lot of building, it’s going to be a lot of resources, and it’s going to be a lot of transmission.” 

Cole said the utility’s goal is to serve all customers while maintaining reliability and avoiding cost-shifts among those customers. 

Antoine Lucas, vice president of markets at SPP, said that, since the COVID-19 pandemic, his RTO has fielded 40 GW of customer interconnection requests, with about 15% of those resulting in load interconnection agreements. 

“Looking forward, though, we’ve seen quite a few projections that those numbers will increase,” Lucas said, partly driven by new demand, but also because SPP has integrated a large number of renewable resources. 

“That has been something that’s been attractive to a lot of these entities who are willing to bring data centers or other businesses into the footprint,” he said. 

Lucas also clarified that he thinks SPP’s 15% customer interconnection rate is like the section of prospectus for a mutual fund stating that “historical performance is not indicative of future returns.” 

“We know there will be an increase, but we know there are also factors that impact it as well — cost being one of those major considerations,” he said. “In my opinion, it’s not so much whether or not we’re going to see an increase, it’s just going to be where does it happen?”