Data centers, energy consumption and voltage

Economists Jamal Mamkhezri, Xiaochen Sol, and Yuting Yang from New Mexico State University conducted a study on Virginia's data center concentration between 2015 and 2024, concluding that it leads to a 7.3% increase in local clean electricity costs. This is attributed to grid congestion and marginal transmission losses, effectively socializing the private costs of massive data processing onto the electrical system and potentially domestic consumers. The article highlights that the International Energy Agency projects data center electricity consumption to exceed 945 TWh by 2030, surpassing Japan's total consumption. This structural shift prompts questions about who bears these energy costs. In Virginia, the state legislature debated a 2026 bill designed to shift more red-line costs and capacity to large consumers like data centers, aiming to reduce residential electricity bills. An independent market watchdog for PJM Interconnection estimated data center demand contributed roughly 40% of total capacity costs. The author challenges the tech industry's argument of carbon neutrality, stating it doesn't resolve geographical grid congestion or the need for infrastructure funding. The piece emphasizes the necessity for regulation and political will to ensure equitable distribution of costs, suggesting that the public debate must address who truly benefits from the digital revolution and who ultimately pays the bill. It also uses Spain as an example that should learn from Virginia's experience to avoid similar infrastructure and cost challenges.