Data Center Risks

 
 

AI technology is driving a global surge in the development of hyperscale data centers — massive facilities that require huge amounts of power and water to run.

Water: A single data center can use as much water as a city of 50,000 people. It can cause contamination by increasing concentrations of pollutants in groundwater and releasing chemicals like PFAS that are added to cooling systems.

Infrastructure: Data centers can place enormous strain on already-overtaxed regional electric grids and water systems.

Health: Diesel backup generators cause air pollution estimated to cost $20 billion in yearly public health impacts. Data centers also produce significant noise pollution and 24/7 noise.

Utility costs: In areas near data centers, wholesale electricity costs jumped 267% over the last five years.

 

In New Hampshire

 

In Bow, developer Granite Shore Power is reportedly exploring turning the former Merrimack Station coal plant into a 350-megawatt hyperscale data center.

For context:

  • 350 megawatts (MW) is enough power to run 115,500 residential homes.

  • A data center even a third of that size would be the single biggest electrical customer in New Hampshire.

  • The largest currently-operating data center in New England is less than 40 MW.

Data centers are overwhelmingly unpopular across the state. Recently Canterbury banned future data centers, Nottingham paused their development with a moratorium, and Rochester put significant restrictions in place.

Financial impacts on residents:

  • Higher electric bills. Bloomberg found that in areas with a lot of data centers, rates jumped 267% over the last five years. 

  • Negative effects on home values. Announcements of large data centers have been associated with an average 3% reduction in home values within 3 miles. Researchers found sharper drops–averaging around 7%–for homes located within 1 mile.

  • New Hampshire tax law is not set up to earn maximum tax revenue from data centers, so communities weighing a proposal may have less revenue potential than they think. New Hampshire doesn’t have a personal property tax, which, in other states, taxes the equipment inside a data center in addition to the real estate it sits on.

Environmental impacts:

  • Data centers require massive amounts of water for cooling. Water pollution and potential effects on Merrimack River are very concerning.

  • Large hyperscale facilities can use between 1 million and 5 million gallons of water per day for cooling, significantly straining natural watersheds.

Public health impacts:

  • High levels of noise pollution, both decibel level and low-frequency noise.

  • Diesel-powered backup generators make your air unsafe to breathe. A Virginia data center recently ran on diesel generators for 24 hours and made the air quality so poor that residents had to leave their homes. The state said it had no authority to make the data center stop running the generators.

Infrastructure and public safety concerns:

  • Lithium-ion batteries for data center server storage are extremely volatile and create high-risk fire incidents. What kind of equipment and training would Bow Fire need? Who pays for that?

  • Are Bow roads capable of handling the heavy construction equipment that would be required to build a data center?

  • Hyperscale data centers place massive strain on the electrical grid and on local water treatment systems. A data center of even 100 MW would be easily the single biggest electricity user in NH; the Bow proposal is for 350 MW. In Virginia, data centers consume more than 25% of the state’s electricity. This past summer, the strain became so severe that teachers in Virginia classrooms were told they had to conserve power. 

Broader financial impacts:

  • Data center tax abatements, which are common in states that choose to welcome data center development, undermine public budgets. Four states are already known to be losing $1 billion or more per year – a very steep price for welcoming data centers.

  • The volatile and quickly-changing nature of the AI industry raises questions about what happens to communities with data centers in them. The industry’s circular financing and reliance on debt are concerning.

 
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