The Data Center Backlash Is Really About Abundance
The Dispatch · RC · trust 53/100
Unlocked Dispatch Energy The Data Center Backlash Is Really About Abundance Keeping up with data center-driven electricity demand requires supply-side solutions, not bans. Roger Pielke Jr. / August 4, 2026 Loading = 3 && ageInMonths 3 months old . Some information may be outdated.'; } else if (ageInMonths = 6 && ageInMonths 6 months old . Some information may be outdated.'; } else if (ageInMonths = 12 && ageInMonths 1 year old . Some information may be outdated.'; } else if (ageInMonths = 12) { const ageInYears = Math.floor(ageInMonths / 12); this.message = `This post is more than ${ageInYears} ${ageInYears === 1 ? 'year' : 'years'} old . Some information may be outdated.`; } } }" { this.tooltipOpen = false; }, 200); } }" class="relative" Audio Turn any article into a podcast. Upgrade now to start listening.
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Welcome to Dispatch Energy ! Conventional wisdom holds that the Luddites, the 19 th -century English workers who smashed textile machinery to protest automation, were anti-technology. But historians of the movement have added considerable nuance: The Luddites were skilled craftsmen who opposed not the technology but what the technology did to their wages, working conditions, and livelihoods. This perspective lives on—opposition to technological innovation is usually far more complicated than pro- or anti-technology. What people care about are the real or perceived consequences of innovation.
Luddite dynamics have been replayed in the context of almost every important technology of the last half-century: fracking, incandescent light bulbs, SUVs, childhood vaccines, water fluoridation, nuclear power, wind turbines, genetically modified crops—each became a proxy fight in which the combatants often let pro- or anti-technology symbolism crowd out consideration of risks and benefits.
Data centers have now joined the list of contested technologies, and the fight follows a familiar script. One veteran organizer explained plainly why national environmental groups seized on the issue in an interview with Politico : “There is not a better way to be relevant that is as prevalent as data centers.” That organizer—Jane Kleeb, the Bold Alliance founder who spent two decades rallying communities against oil pipelines—explained the underlying strategy: “After doing this work for 20 years, it is easier to mobilize communities to block something than it is to build something.”
I’m no defender of every technological innovation. But on the issue of data centers, the central question is not “Which side are you on?” Rather, it is whether the empirical claims for and against data centers stand up to scrutiny. Today’s column takes a deep dive into the most common claims in support of moratoria on building new data centers.
People care deeply about the cost of living. If data centers contribute to increasing those costs, we should expect strong opposition. But is it actually the case that data centers are driving up the average American’s electricity bill?
A 2026 study by researchers at the nonprofit Electric Power Research Institute (EPRI) applied an instrumental variables approach to isolate the causal effect of data center growth on retail electricity rates from 2015 to 2024. Their findings? Data centers pushed average U.S. retail rates modestly down . The mechanism follows familiar economics: Electricity generation features high fixed costs, transmission and distribution reward scale, and unit generation costs keep falling—so durable new demand spreads those fixed costs across more kilowatt-hours and lowers the average price.
The electricity demand of data centers, actual and projected, is more modest than most people realize. U.S. data centers consumed about 183 billion kilowatt-hours in 2023, roughly 4 percent of national electricity consumption. By comparison, air conditioning dwarfs that figure—cooling homes and commercial buildings consumes about 425 billion kilowatt-hours a year, accounting for some 10 percent of all U.S. electricity consumption and 19 percent of the power used in American homes—yet no one proposes banning it (well, maybe in Europe). And the International Energy Agency projects that data center demand growth through 2030 (around 240 terawatt-hours) will trail the added demand from electric vehicles and household electrification. Data centers add new demand, but they are just one among many reasons why electricity demand is expected to soar.
But the EPRI analysis looked backward, and the authors noted that if future supply falls behind demand, the effect can reverse, leading to higher consumer electricity prices. A 2025 load growth report by the power consulting firm Grid Strategies found that five-year peak-demand forecasts jumped sixfold in three years, to 166 gigawatts, with data centers driving roughly 55 percent of that growth. And the U.S. electrical grid is currently ill-equipped to meet this growing demand: The same report found that the U.S. built fewer than 900 miles of high-capacity transmission in 2024 versus an estimated annual need near 5,000 miles.
The key to limiting possible electricity price increases is to ensure that demand and supply are well matched. The fact that it is easier for advocates to block demand rather than increase supply helps to explain why opposition to data centers has mobilized.
However, two facts should temper alarm. Grid Strategies concludes that utility forecasts overstate data center load growth by around 40 percent, because the utilities behind those projections fail to discount projects that never get built or never draw their full load.
And grid operators already manage the risk: The North American Electric Reliability Corporation, a nonprofit international authority that sets reliability standards for the grid in the U.S., Canada, and part of Mexico, is writing rules for the rapid load…
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