RELEASE: New report details environmental, consumer costs of AI, crypto and data centers

Chicago third largest data center market in U.S.; electricity demand growth exacerbating electric bill increases for northern Illinois residents

CHICAGO – Rising electricity demand from U.S. data centers risks deepening America’s reliance on fossil fuels and can put consumers and communities at risk, according to a report released Thursday. The report, Big data centers, big problems: The surging environmental and consumer costs of AI, crypto and big data, by Frontier Group, Environment Illinois Research & Education Center, Illinois PIRG Education Fund, and our national partners reflects growing concern about the environmental and other impacts of powering technologies such as artificial intelligence (AI) and cryptocurrency.

“People across the country are trying to square the benefits that technology can bring with the real and growing impacts on the environment and consumers,” said Theo Rosen, associate with Environment Illinois Research & Education Center. “We hope this report conveys the scale and urgency of the challenge and provides ideas that communities and decision-makers can use to minimize the impact.” 

The report shows that between 2021-2024, the number of data centers in the U.S. roughly doubled from 2,667 to 5,381, and their number is expected to keep growing. Chicago is the third largest data center market in the country. Electricity demand to power these energy-hungry facilities is projected to surge too. In Illinois, data centers draw 5.43% of all the electricity consumed in the state. That percentage will likely grow, with 30 more planned data centers in the state. 

The report identifies at least 17 fossil fuel-generating facilities nationwide that have delayed their anticipated closures or are at risk of being kept open longer than planned due to rising electricity demand. In many cases, much of that demand is for data centers. Additionally, at least 10,808 MW of new fossil-fuel powered electricity generation is being planned to meet increasing electricity demand nationwide. The report also highlights proposals to resurrect expensive and dangerous nuclear power plants solely to serve data centers

Data centers can increase utility prices for consumers, and the cost of incorporating data centers onto the electric grid can be passed onto other ratepayers. In June, electric bills will increase for residents of northern Illinois, due to a number of issues with the regional grid operator that northern Illinois is a part of, including a significant backlog in approving shovel ready renewable energy projects. The rapid projected electricity demand growth in the region from data centers is exacerbating this and other problems that are driving up capacity charges on electric bills.

“Utility customers should not have to pay the price when a big data center sets up shop in their area,” said Abe Scarr, State Director with Illinois PIRG Education Fund. “Maximizing energy efficiency, generating clean power on-site, and ensuring that data centers pay the full cost of necessary grid upgrades can help reduce the impact on consumers.”

Given the growing impact of data centers, the authors recommend that policy makers: 

• Ensure that virtually all energy use at data centers is powered with renewable energy, and take full advantage of opportunities to improve the energy efficiency of data centers and reduce their impact on the grid. 
• Improve transparency regarding energy and water use by data centers.
• Consider the societal value provided by AI, cryptocurrency and other forms of energy-intensive computing to ensure that the value they provide exceeds the costs they impose on the environment, consumers and communities.