We just need to learn to love the local data centre

The cost and time for building data centres just increased after a blue tsunami swept Democrats into positions that had been Republican strongholds for decades, such as the governor’s offices in Texas and Kansas. The pushback against data centres was definitely on the ballot, and the message was loud and clear: “We don’t want these noisy behemoths in our backyard.”

This signal was most prominent in Texas, where Gina Hinojosa, a relatively unknown state legislator, campaigned heavily in opposition to these projects and toppled Greg Abbott, a three-term incumbent governor. Abbott had embraced the data-centre boom and only called a pause in August amid alarming poll numbers.

The problem is the US needs to keep building data centres, which house thousands of computer servers, to process the clicks and taps that underpin modern life and to harness the productivity gains of an artificial-intelligence revolution that is already taking hold in the economy. Productivity gains are what drive wage increases without spurring inflation and are the basis for the high US living standards compared with the rest of the world. The consequence of the election should not be the demonisation of data centres but the opportunity to build them with community concerns in mind.

What shouldn’t be lost amid all the noise is that data-centre construction is booming despite the mounting opposition that morphed into a bipartisan issue and left few politicians to defend these crucial projects — not even the governor of business-friendly Texas. Two suppliers closely tied to data centres, Vertiv Holdings Co. and Amphenol Corp., both reported that third-quarter orders doubled from a year ago, with no visible cracks in demand. The value of US data-centre construction jumped 90% in September from a year earlier, according to the US Census Bureau.

Data-centre construction won’t stop, but the results of the midterm election give communities the upper hand in negotiating where and how they will be built, tempering the mad dash to put up these projects and halting some of the community-unfriendly solutions, such as deploying loud jet-aircraft engines as a quick way to generate off-grid electricity.

The builders of data centres will be wise to heed the message that they must be more transparent on how these projects will use energy, consume water and create noise. More scrutiny of large projects is welcome to head off abuses that could take place if developers had free rein to build these facilities.

Unfortunately, politicians latched on to the public’s concern and then amplified it into irrational fear that now has people discussing these projects as if they were nuclear waste dumps. The opposition has been fueled by the simplistic sound bites, and even disinformation, that flood the social media where many people obtain their news.

The biggest obstacle for data centres is access to vast amounts of uninterrupted power supply, which has sparked fear that residential electricity bills will skyrocket. The answer is straightforward: Generate more electricity and shield households from cost increases. More than 200 companies, including the largest power producers and hyperscalers, signed a Ratepayer Protection Pledge at the White House in March, which, among other things, promised that data-centre power needs wouldn’t push up residential rates. These promises aren’t mandatory, but the backlash should be fierce if they’re broken.

Early signs are encouraging. In a deal to expand Google’s data-centre campus in West Memphis, Arkansas, Entergy Corp. plans to add capacity to the grid that it says will result in $500 million of savings for customers beginning in 2028. In addition, Google pledged $25 million over five years for the local community, including workforce training. Similarly, Duke Energy Corp. last month reached a deal with several of the largest tech companies that will protect customers in North Carolina from some data-centre costs, including infrastructure such as substations and transmission lines.

Water use is often cited by opponents of data centres as a serious drawback, but this has been blown out of proportion. Data centres don’t use nearly as much water as traditional industries including agriculture, chemicals or food and beverages. Besides, recycling technology can reduce data-centre water use to negligible amounts. This is where good governance can locate a project away from residential neighbourhoods and insist on robust water recycling. Oracle Corp. is using closed-loop cooling technology that doesn’t require continuous water supply for data centres it’s building in New Mexico, Michigan, Texas and Wisconsin. Acoustic panels could help mitigate the low humming noise that opponents cite.

The benefits of data centres have been lost in the overheated rhetoric of the midterms. These facilities generate local tax revenue and have a relatively light environmental footprint and social impact. They don’t pollute as much as traditional heavy industries, such as steel, glass or chemicals. They don’t generate heavy truck traffic like typical industrial plants and warehouses do. Most people and politicians support manufacturing more goods in the US. Those plants use electricity, consume water, make noise and create more traffic — all of which create local challenges that can be overcome. Should we just throw up our hands and quit making goods altogether? That would be irrational and unwise.

The data-centre boom will continue because AI has unleashed unprecedented demand that needs to be met. These facilities form the infrastructure backbone of our modern lives and, just as the water faucet and light switch are expected to work, it’s easy to take that for granted. Done right, these facilities will drive the digital revolution while most communities won’t even know they’re there, humming along 24/7 and processing every tap and click.