The Environmental Impact of Global Data Center Expansion

Data centers are among the fastest growing consumers of electricity globally, with a total energy demand that would make them the 11th largest electricity consumer in the world if they were a country. According to the International Energy Agency, electricity consumption for these facilities is expected to double by 2030 to approximately 945 terawatt hours, which is roughly equivalent to the annual consumption of Japan. This demand is driven by the physical infrastructure required for AI models, cloud storage, streaming, and social media. For example, ChatGPT alone fields more than 2.5 billion questions daily.

In certain cities, the impact on the power grid is severe. Data centers consume about 41 percent of the electricity in Frankfurt, Germany, where the grid is so saturated that no new connections will be available until the 2030s. In Dublin, that figure is double. In the United States, a 2024 study found that more than half of data centers are powered by fossil fuels, emitting over 105 million tons of CO2. To meet surging demand, utilities have delayed the retirement of 15 coal fired plants and announced more than 100 GW of new gas fired power plants.

While renewable energy can power these facilities and potentially stabilize the grid, using green electricity for data centers may reduce the amount available for decarbonizing other heavy industries or electrifying transport. Beyond energy, data centers require massive amounts of water for cooling. A single large facility can use up to 5 million gallons a day, which is comparable to the usage of a town with 10,000 to 50,000 people. In northern Virginia, nearly 300 data centers used almost 2 billion gallons of water in 2023. More efficient alternatives exist, such as immersion cooling and closed loop systems that can reduce freshwater use by up to 70 percent.