Are consumers doomed to pay more for electricity due to data center buildouts?

Data center operators to sign pledge to supply their own power instead of relying on grid.

See full article...

 

[SixDegrees]

"We will happily sign as many meaningless pieces of paper as desired while we determine more opaque ways to socialize the costs of our massive energy consumption through transfer of these costs to consumers."

 

[WereCatf]

Shah said: “The level of ineptitude by which the data center companies are sleepwalking into major problems just seems shocking for trillion-dollar companies.”

No, it's not even remotely shocking. This is exactly what anyone who has kept any sort of tabs on their behaviour would 100% expect.

 

[LordEOD]

Of course the everyday, working person will pay..

The profits though, those the companies get to keep!

Privatize the profits and socialize the costs.

 

[NoSkill]

A non-binding pledge to run their own power, while backlogs of turbines are 3-5 years away. Not to mention the heavy water consumption even in cooling towers. The problems of this AI surge will not go away soon.

 

[Embattle]

Doomed to transfer more money to the tech bros who'll do little more than make the world more depressing.

 

[bennett_cg]

"Consumers" is a really stupid way of spelling "households" - the data centers are consumers, too and I absolutely resent being reduced to an "ambulatory wallet"

 

[DJ Farkus]

Electricity supply for consumer use will continue to lag demand, with price increases.

Meanwhile, AI data centers get fast-tracked to build their own private electricity supply.

Profits over people.
2nd verse, same as the 1st

 

[rcduke]

The climate & local effects from these gas turbines being used weren't noted in the article. As previous commenter stated heavy water usage (which is on the local municipality "grid" for water), the noise and air pollution from said turbines, and the previous data centers skipping permitting altogether (see X's data center in Tennessee).

Renewables won't have the capacity to power these data centers, and unfortunately things take time to build. I'm frustrated at this federal administration blaming building code and review for inhibiting development but code is commonly written in blood. People died due to various things and the code was put in to limit future events. That's before you get to the argument of whether LLM/Generative AI is even useful beyond enriching the richest people in the world even more.

 

[ashypans]

"Competition for gas turbines is fierce, with waits as long as seven years for new orders."

And transformers, we can't secure transformers either. CapEX is a wild ride and it isn't limited to our power generating assets. Long wait times and increased costs on the transformers for our water plants too.

 

[aikouka]

Even if you don't directly take the power from the grid, if you install a bunch of gas turbines, which typically use natural gas, then you're taking from the natural gas supply. If I recall, the US gets about 40% of its power from natural gas, and if there's more of a demand for it, the price may go up, which will cause electricity rates in some areas to go up as well.

Even if we ignore that, what about the less obvious "costs"? The easiest example is both the environmental and noise pollution caused by gas turbines. What is going to happen to offset the negative aspects of installing those on-site generators?

 

[Tactical Finesse]

Oh who is that calling on Line 2? Oh it is Betteridge? Tell them the answer is "YES" this time.

 

[DJ Farkus]

"Consumers" is a really stupid way of spelling "households" - the data centers are consumers, too and I absolutely resent being reduced to an "ambulatory wallet"

Fair enough. But I think in the context of this discussion, people understand well enough that data center electricity demands are so far removed from what we think of as "consumers" that they are an entirely different class of "consumer".

Let call them "electricity sinks" instead? Seems closer to their actual usage profile.

 

[Tactical Finesse]

Even if you don't directly take the power from the grid, if you install a bunch of gas turbines, which typically use natural gas, then you're taking from the natural gas supply. If I recall, the US gets about 40% of its power from natural gas, and if there's more of a demand for it, the price may go up, which will cause electricity rates in some areas to go up as well.

Even if we ignore that, what about the less obvious "costs"? The easiest example is both the environmental and noise pollution caused by gas turbines. What is going to happen to offset the negative aspects of installing those on-site generators?

Further...."Natural gas" as it is dubbed is mostly methane. And methane has this cute little property--it is a greenhouse gas, all by itself, unburnt. And it is a FAR worse one than CO2 in terms of heat trapping, IIRC something like 20 fold worse. Which means that when every single gas canister, and well head, and pipe-joint inevitably leaks a little....it warms the climate.

And it doesn't take much accidental leakage of NG to make the entire system worse than coal in terms of warming emissions.

 

[msawzall]

But industry executives have suggested the commitment will not be binding

Like everything Donald says or does.

 

[lasertekk]

SMR's are the answer: https://www.nuscalepower.com/

Build them on site right next to the data center.

A ‘solution’ for a problem that should not exist. The fix is easy and in plain sight.

 

[etxdm]

Those of you who live in a domicile where you can install solar panels, seems like a good time to explore your options. I was nervous about doing it but took the plunge last year, and now I'm so glad to mark electrical power supply and price off my list of worries. This month I had a cash credit from my grid provider.

 

[SirOmega]

"We will happily sign as many meaningless pieces of paper as desired while we determine more opaque ways to socialize the costs of our massive energy consumption through transfer of these costs to consumers."

Pretty much nailed in on the first comment.

Companies that previously powered the grid will switch to private agreements with data centers whenever their contracts allow. This is a huge gift to them. They will still use the same power lines from source to destination, but pay wheeling fees to push their power over someone else's lines to the destination data center.

 

[plugh]

SMR's are the answer: https://www.nuscalepower.com/

Build them on site right next to the data center.

They expect their first SMR delivery in only 5 years!!

I’m guessing if you order one now, you could get in the queue for installation by 2035. Assuming no development setbacks…

 

[MilanKraft]

"We will happily sign as many meaningless pieces of paper as desired while we determine more opaque ways to socialize the costs of our massive energy consumption through transfer of these costs to consumers."

No, it's not even remotely shocking. This is exactly what anyone who has kept any sort of tabs on their behaviour would 100% expect.

Winning Posts. They will 100% find a way to weasel out of covering all the costs. The best anyone could hope for — likely in more liberal states where governors and legislators are already looking at ways to force the companies' hands — is that they will somehow manage to at least cover a significant portion, while the rest still ends up on our collective utility bills.

Whoopee! Our electric and/or natural gas bills will only go up 14% this year instead of 28%. Next year only another 10% instead of 15%, etc etc. Hopefully the ugly market correction happens soon as that is probably the only thing that will cool the jets of the companies dying to build these things all over the place.

 

[Tactical Finesse]

SMR's are the answer: https://www.nuscalepower.com/

Build them on site right next to the data center.

The largest problem for SMRs (and there are many)...is still economics.Just like their larger traditional brethren.

You see, large commercial-scale power plants have large economies-of-scale advantages. SMRs only have an advantage in lower-risk profiles. and maybe-faster-construction....

With a 2000MW commercial reactor:

• You have one centralized site to secure against intrusion. Nuclear security guards--are some of the highest paid "SECURITY" t-shirt wearers around.
• You have only 1-2 reactor cores, so you need only a handful of operators to run the thing. These people cost a LOT of money
• Being centralized with 1-2 cores you need fewer maintenance workers...these are also expensive because of the materials being worked with, and needed security clearances
• You have only one site to ship hazardous materials too.

As opposed to, let us hypothetically say a fleet of 100x SMRs each making 20MW....where you need far more of every single kind of manpower, you have far more sites, you need far more security personnel, you have far more of everything....the advantage of SMRs is only maybe in construction time and maybe in risk profile--but no one actually knows because no one has done it yet.

I've seen payrolls of nuclear plants--as expensive as they are to build...the wages are HIGH, and would make economic gains from "cheaper" SMR construction all but wiped out.

 

[Cthel]

They expect their first SMR delivery in only 5 years!!

I’m guessing if you order one now, you could get in the queue for installation by 2035. Assuming no development setbacks…

What's the order queue look like for steam turbines anyway? If that's 7 years as well, the fact that you could get an SMR from the nuclear fairy tomorrow wouldn't help in the slightest

 

[numerobis]

The largest problem for SMRs (and there are many)...is still economics.Just like their larger traditional brethren.

Not in this case of data centres. They are willing to pay top dollar for any power source, as soon as it shows up soon.

Which is actually worse for SMRs than the cost problem.

You can commercially buy a natural gas generator today. Yes, there's a long lead time, but you can call up a bunch of companies and get bids.

You cannot buy an SMR from anyone. You can call up a few would-be producers and set up a pilot project and then hope that they finish engineering and get approvals. Then in a few years when they finally get started, they can call up a turbine maker and ... oh, now you're standing in the same line with all the gas generator people.

 

[Madestjohn]

Well, … they all seem trustworthy

 

[Tactical Finesse]

Not in this case of data centres. They are willing to pay top dollar for any power source, as soon as it shows up soon.

Which is actually worse for SMRs than the cost problem.

You can commercially buy a natural gas generator today. Yes, there's a long lead time, but you can call up a bunch of companies and get bids.

You cannot buy an SMR from anyone. You can call up a few would-be producers and set up a pilot project and then hope that they finish engineering and get approvals. Then in a few years when they finally get started, they can call up a turbine maker and ... oh, now you're standing in the same line with all the gas generator people.

Well. Sort of.

The problem for all these mostly AI data centers....is no one seems to actually be making any money on them. And no one has any idea when or if they ever will. They are running out of VC money to burn to even buy the RAM and GPU hardware--resulting to circular deals to keep the whole bubble going. Which is why Nvidia is partnering with Palantir to build Skynet for the DoD--because the US miitary-industrial-complex is the only IRL infinite-money-glitch .

 

[jezra]

Consumers are doomed to pay more regardless. Whatever excuses the Wall St owned utilities use to justify never ending rate increases are irrelevant. Line must go up, and shareholders want to get paid.

 

[Sinistrous]

Grateful my wife agreed to let me put in a 10 kw solar system during the last administration.

 

[DrewW]

Why are the roofs of these data centers not festooned with solar panels? Wouldn’t that offset cooling and the energy draw by at least a little bit?

 

[AlStar]

On the campaign trail in 2024, Trump pledged to cut energy bills in half within a year of taking office.

In reality, residential electricity costs rose by 6 percent nationwide in February, compared with a year before, according to the US Energy Information Administration.

So ridiculous - I wish that we could hold Trump accountable for the outright lies that he’s constantly spewing.

 

[Nora Lenderbee]

SMR's are the answer: https://www.nuscalepower.com/

Build them on site right next to the data center.

And how many years will it be before you can actually buy one, and how many more years will it take to get beyond the inevitable lawsuits from concerned citizens who won't want a nuke in their neighborhood?

 

[SLFC]

They keep saying AI job displacement will create new opportunities in different fields. I can see the ads now: Get paid to exercise. Anyone know how many pedal generators it will take to power a data center? Get your Peloton stock while it's on sale...

 

[Madestjohn]

So ridiculous - I wish that we could hold Trump accountable for the ridiculous amount of outright lies that he’s constantly spewing.

Hmmm.. frankly the lies are omnipresent - far too many to catalogue or track, they just kinda wash over everything
I’d be satisfied if he was held responsible for the sexual abuse and murders

 

[sfbiker]

At a White House event on Wednesday, executives from Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI are due to sign the pledge to supply their own power instead of relying on a grid connection.

That makes little difference when their power plants are buying the same fuel that public power plants are using. Sure it will reduce some of the capital costs to consumer ratepayers since they aren't paying to build new capacity, but electricity prices will still surge due to higher fuel costs.

It'd be better if instead of building their own private 100MW plant, they contributed the money they would have spent on that private power plant to the public power company to help build a 1000MW plant to help serve everyone's needs.

Or, and I know Trump would veto this, they could build entirely new renewable power sources like solar, wind, etc to supply their needs, then they wouldn't be driving up fuel costs.

 

[Lexus Lunar Lorry]

Why are the roofs of these data centers not festooned with solar panels? Wouldn’t that offset cooling and the energy draw by at least a little bit?

Because solar power is an evil Chinese plot to kill American farmers. At least that's my understanding from the president.

 

[Megahedron]

The largest problem for SMRs (and there are many)...is still economics.Just like their larger traditional brethren.

You see, large commercial-scale power plants have large economies-of-scale advantages. SMRs only have an advantage in lower-risk profiles. and maybe-faster-construction....

With a 2000MW commercial reactor:

• You have one centralized site to secure against intrusion. Nuclear security guards--are some of the highest paid "SECURITY" t-shirt wearers around.
• You have only 1-2 reactor cores, so you need only a handful of operators to run the thing. These people cost a LOT of money
• Being centralized with 1-2 cores you need fewer maintenance workers...these are also expensive because of the materials being worked with, and needed security clearances
• You have only one site to ship hazardous materials too.

As opposed to, let us hypothetically say a fleet of 100x SMRs each making 20MW....where you need far more of every single kind of manpower, you have far more sites, you need far more security personnel, you have far more of everything....the advantage of SMRs is only maybe in construction time and maybe in risk profile--but no one actually knows because no one has done it yet.

I've seen payrolls of nuclear plants--as expensive as they are to build...the wages are HIGH, and would make economic gains from "cheaper" SMR construction all but wiped out.

The obvious answer to this problem is that they'll just lobby to relax regulations so they can get cheaper laborers to run them in the name of "meeting growing demand" and "accelerating business growth."

• High-paid security guards? Nah, the foreman can just hire his drinking buddy Jim for 12 bucks an hour. Sure, he got fired from his job as a cop two states over a few years ago (something about a DUI? I dunno, I wasn't really paying attention), and he might spend most of his shift watching Spike TV while high as a kite, but we just need to check the box.
• Hire high-paid, specialized operators? Nah, just grab a fresh college hire. Degree in English? Good enough, just follow this rulebook and don't fuck up.
• Hire expensive maintenance workers? Eh, we'll just poach a few guys from the local Home Depot. I'm sure they'll do a bang-up job, they fixed my water heater no problem!

Now, one might say silly things like "this is inviting disaster" and "you're going to spike the number of nuclear accidents by the hundreds," but to that I say: Do you Hate America?

(I hope that the joking tone of this post comes through)

 

[EnragedEwok]

We're allergic to CapEx in this country unless government's paying for it, so can we just take a page out of China's book and use government money to build out new generation sources and transmission capability? It seems to be a working solution seeing as they're leading the buildout of renewables and that cheap energy is a big factor in companies continuing to locate factories there despite the multitude of government/espionage red flags.

 

[Madestjohn]

The obvious answer to this problem is that they'll just lobby to relax regulations so they can get cheaper laborers to run them in the name of "meeting growing demand" and "accelerating business growth."

• High-paid security guards? Nah, the foreman can just hire his drinking buddy Jim for 12 bucks an hour. Sure, he got fired from his job as a cop two states over a few years ago (something about a DUI? I dunno, I wasn't really paying attention), and he might spend most of his shift watching Spike TV while high as a kite, but we just need to check the box.
• Hire high-paid, specialized operators? Nah, just grab a fresh college hire. Degree in English? Good enough, just follow this rulebook and don't fuck up.
• Hire expensive maintenance workers? Eh, we'll just poach a few guys from the local Home Depot. I'm sure they'll do a bang-up job, they fixed my water heater no problem!

Now, one might say silly things like "this is inviting disaster" and "you're going to spike the number of nuclear accidents by the hundreds," but to that I say: Do you Hate America?

(I hope that the joking tone of this post comes through)

Why are you overlooking American industry’s favorite source of cheap exploitable labour ?

prison

Failing that (if that workforce is considered too ‘urban’) you can always look into all those new internment-fulfillment camps ICE is building

 

[cyberpenguin]

I know it sounds like sci-fi, but some day we will invent something that can harness the power of the sun. Maybe something in panel form? Perhaps turbines could be made that are powered by wind.

Huge areas of the southwest US have abundant sun and excessive wind.

If only there was a way to capture that.

 

[Tonkaman]

Well. Sort of.

The problem for all these mostly AI data centers....is no one seems to actually be making any money on them. And no one has any idea when or if they ever will. They are running out of VC money to burn to even buy the RAM and GPU hardware--resulting to circular deals to keep the whole bubble going. Which is why Nvidia is partnering with Palantir to build Skynet for the DoD--because the US miitary-industrial-complex is the only IRL infinite-money-glitch .

Which is why I'm not too worried about this, other than the water use. The water is something we can't really come back from, but on the power side this bubble will in all likelyhood pop in the next 5 years as interest rates do their thing. After that, this massive power build out won't be needed and prices should return to a more sensible level. Very little hardware will leap from the drawing board in that time and actually be built.