Metro Atlanta is now the sixth-largest market in the nation for data centers. But data centers have huge energy demands, so Georgia Power wants to add more electricity capacity, most of which would be powered by fossil fuels.
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Last fall, the state’s largest electric utility — Georgia Power — came to regulators with a surprising request.
Just months after placing the country’s first new nuclear reactor in decades into service, the company said it already needed to make more electricity, and fast.
Georgia Power said a wave of economic development of “unprecedented magnitude and speed” is heading for the state. To meet the coming demand, it wants to add huge amounts of new capacity, mostly powered by fossil fuels.
Incoming electric vehicle and battery factories have significant electricity needs. But in hearings this month, Georgia Power revealed the vast majority of its forecast demand crunch — roughly 80 percent — is driven by different kinds of facilities: data centers.
Whether you’re browsing Instagram, uploading photos to the cloud or using artificial intelligence, our digital lives are powered by data centers. But the often-stark warehouses packed with computer servers are electricity and water hogs, nearly as insatiable as the market’s demand for the facilities themselves.
“Humans are addicted to technology,” said Raul Martynek, CEO of DataBank, which has five planned data center campuses in metro Atlanta. “Unless that changes … you’re going to need more data center capacity.”
An analysis by The Atlanta Journal-Constitution found at least 18 data center campuses are either in development or preparing for sizable expansions across Georgia, mostly near Atlanta.
For years, local and state officials have courted the industry, pitching Georgia’s cheap land, substantial tax incentives and abundant access to power and water. Not only does Georgia provide tax savings to developers of some of the biggest data centers, local governments have doled out hundreds of millions of dollars in additional property tax breaks.
But the facilities themselves create few jobs and demand to build here is so strong, critics contend generous giveaways aren’t needed, especially when ratepayers may fund added power capacity.
“(Data centers) are generally not seen as one of the best businesses to attract,” said Nate Jensen, a professor at the University of Texas at Austin who studies economic development strategies. “It’s just eye-popping dollar numbers because they’re investing so much capital.”
Mega-Sized Megawatts
Metro Atlanta is now the No. 6 market in the U.S. for data centers, which are not only growing in number but vastly increasing in size.
At the end of 2019, metro Atlanta’s entire multi-tenant data center market totaled 142.6 megawatts (MWs), according to real estate services firm CBRE. Now, at least eight individual data center campuses are under development in North Georgia today with potential power capacities exceeding 150 MWs, the AJC found.
As data centers get larger, they also get more expensive, with some costing billions to build. But the servers are often built overseas or by companies based elsewhere, meaning the centers’ local economic impact is far lower than other huge corporate expansions.
Despite their mammoth size, proponents argue data centers don’t burden the infrastructure of their surrounding communities. A million-square-foot facility usually only employs a few dozen workers, while similar industrial developments might employ hundreds and generate thousands of truck trips to wear down nearby roads. But some communities are already exploring costly water and sewer expansions in anticipation of more data centers.
Many of the world’s largest companies, from Amazon to Facebook to Microsoft, operate in-house data centers, while other companies house servers they rent to other firms.
Vantage Data Centers, developer of a sprawling Douglas County server farm, announced it has received more than $8 billion in equity investment since September. Qualified Technology Services is not only expanding its Fulton County campus but spent $154 million last year to buy 615 acres in Fayette County for one of the world’s largest data center complexes.
Bill Thompson, a vice president at DC Blox, another developer with two Georgia projects, said companies see markets like Atlanta as a new gold rush.
“There is a literal race going on,” he said.
A Terminus for Fiber Lines
For decades, northern Virginia has served as the country’s preeminent data center market, buoyed by the military and federal government.
But its grip on the data storage sector loosened after a flood of servers stressed its power grid. Companies, looking elsewhere, have found Georgia a willing host. Continue reading “Georgia Welcomed Data Centers. Now It Needs More Power.” →