Decoding The Nexus of Climate, Data, and Energy | Clean Energy Forum

Written by Harshit Agrawal, MEM '26

Decoding the nexus of climate, data, and energy may be the defining challenge of the modern era. I explored this intersection across a 9-article series examining key dimensions of the power demand surge driven by data centers.

The scale of demand is staggering: according to the IEA, global electricity use by data centers is projected to hit 945 TWh annually by 2030, more than double the 415 TWh in 2024. In the U.S., the number of hyperscale data centers rose from 147 in 2015 to over 550 by 2025, with their capacity nearly doubling. The interplay between data centers and renewables is complex: on one hand, data centers' energy hunger is driving investment in renewables and could make emerging green technologies scale faster; on the other hand, if not managed carefully, it can also lock in new fossil fuel infrastructure (as a "quick fix" for reliability) and make it harder to decarbonize the grid. Even if we solve generation, interconnection remains a major hurdle; more than double the current U.S. capacity is stuck in queues. Upgrading the grid is highly cost-intensive for utilities. The economic burden haunts regulators and, by extension, the general public, who might end up bearing the brunt of upgrade costs driven by data centers. As a result, this becomes a policy (externality) question that regulators across the globe are solving differently. For example, Denmark mandates waste heat reuse, Singapore limits builds via permit quotas, and Virginia is rethinking tax incentives. With all of this, and the cutthroat competition to take the AI lead, hyperscalers are doing all they can to source reliable and cheap power, even if that means setting up independent grids, investing in alternative generation (nuclear, geothermal, etc.), allying with peers and the grid (like Google–PJM), and supporting the grid with the same AI that's straining it in the first place. On the solutions front, hyperscalers are joined by emerging startups that are trying to add value in this complex but crucial ecosystem, solving one problem at a time.

Ultimately, data centers becoming grid-friendly and green-friendly is a question of time. All eyes on AI.

Plumes of steam rise above the cooling towers at Google’s data center at The Dalles, Oregon. Source: Google.

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Row of servers in Google’s Douglas County, Georgia, data center. Source: Google.

Solar power plant at Google’s St. Ghislain, Belgium, data center. Source: Google

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Google’s Eemshaven, Netherlands, data center. Source: Google.

Wind turbines near transmission infrastructure. Source: Google.

Google’s Council Bluffs, Iowa, data center. Source: Google.

Article Series Sources

Surplus datacenter heat will be repurposed to heat homes in Denmark — Microsoft 2024 United States Data Center Energy Usage Report — Primary News Source Under pressure from the SCC, Dominion reveals the true cost of data centers — Virginia Mercury Data centers and AI: How the energy sector can meet power demand — McKinsey & Company Data centers are stressing the Irish power grid. Are fuel cells the answer? — ScienceLine EirGrid warns Irish government “mass exodus” of data centers possible without connection agreements — Data Center Dynamics Ireland’s energy regulator proposes policy requiring data centers to match load with new power generation — Data Center Dynamics EirGrid warns of possible data centre ‘exodus’ amid connections row — The Irish Times States push new rules as data centers strain electric grids — The Daily Climate AI could account for nearly half of datacentre power usage ‘by end of year’ — The Guardian Growing competition could drive down solar PPA prices by 2026 — Utility Dive Data centre power costs, the PPA market and a move to 24/7 power matching — Capacity Media How Flexible Interconnections Help Data Centers Connect Faster Without Overloading the Grid — Camus Energy Blog Interconnection Innovation: Data-Driven, AI-Powered, Future-Ready — GridUnity How AI data centers can support grid reliability in Texas and across the US — Utility Dive Big Tech’s data center boom poses new risk to US grid operators — Reuters Utilising excess heat to warm up Danish homes — State of Green Impacts of flexible-cooling and waste-heat recovery from data centres — Technical paper Microsoft to warm homes with waste heat from Danish data center — Data Center Dynamics Data center energy and AI in 2025 — David Mytton Recalibrating global data center energy-use estimates — Lawrence Berkeley National Laboratory Data centres & networks — International Energy Agency AI is set to drive surging electricity demand from data centres while offering the potential to transform how the energy sector works — IEA News AI to drive 165% increase in data center power demand by 2030 — Goldman Sachs Research Breaking Barriers to Data Center Growth — Boston Consulting Group (BCG)Data Center Energy Needs Could Upend Power Grids and Threaten the Climate — Environmental and Energy Study Institute (EESI)Do PPAs Have a Future in the Data Center Sector? — Data Center Dynamics Google’s AI-Powered Grid Revolution: How Data Centers Are Reshaping the U.S. Power Landscape — Data Center Frontier Microsoft signs 50MW fusion power PPA with Helion for 2028 — Data Center Dynamics Dominion unveils plans to add 21 GW of clean energy in 2024 IRP — Utility Dive Data center growth threatens Virginia’s clean energy future — it’s not too late to fix it — Duke University EDGE Center Dominion to expand natural gas plant in Virginia to meet data center demand — Data Center Dynamics Levelized Cost of Energy+ (LCOE+) — Lazard 2024 United States Data Center Energy Usage Report — Lawrence Berkeley National Laboratory (LBNL)