Can Hydropower Revolutionize Data Center Sustainability?
Electricity demand is rising at an unprecedented pace. Though wind and solar are eco-friendly, they are unpredictable, providing inconsistent output. Hydroelectric power is a better alternative. However, like most solutions, it has a combination of benefits and drawbacks. Companies could minimize adverse environmental impacts with careful planning, revolutionizing data center sustainability.
Why Decision-Makers Are Looking Into Hydropower
As cloud computing and artificial intelligence technologies take off, more of these centers are connecting to the grid. Already, the United States is home to around one-third of these facilities. More are on the way, many of which will be in spacious rural areas — places where energy demand is historically low. There are even massive hyperscale facilities under construction.
According to the International Energy Agency, global data center power consumption will increase by 117% from 2022 to 2026, going from 460 terawatt-hours to more than 1,000 TWh. This unexpected surge in energy demand strains electricity transmission infrastructure and reduces local distribution capacity.
Since this trend shows no signs of slowing, utility officials need a fix fast. Natural gas and coal are an unsustainable, short-term solution. As more states adopt decarbonization policies, fossil fuels will become less viable. Even today, they aren’t ideal because they are a finite resource. As these server warehouses drive demand up, prices will skyrocket.
Pros of Using Hydroelectric Power for Data Centers
Hydropower’s benefits make it an excellent alternative to fossil-fired plants.
> Generates Less Waste During Operation
Hydroelectricity is a renewable energy source that relies on water, a plentiful resource. Rotating turbines harness kinetic energy from falling water, which generators convert into electricity for public use.
> Costs Less Than Wind or Solar Power
Hydropower structures have long life spans, keeping construction and maintenance costs low. They can last 50 to 100 years, according to the U.S. Energy Information Administration. Up to a century of emissions-free electricity generation offsets indirect emissions.
Hydroelectric facilities offer lower levelized costs in comparison to other sources, which means the average price of generating electricity over the building’s lifetime is relatively low. Operators spend less on fuel, maintenance and operation.
> Provides Flood Control and Irrigation
Dams and reservoirs control the flow of fast-moving bodies of water, providing flood control and irrigation support. They can store and gradually release floodwaters, preserving downstream habitats.
> Don’t Directly Produce Emissions
Today, most data centers run on fossil fuels. This traditional energy source is a problem because experts expect their electricity consumption will rise by 160% by 2030, doubling their total power requirements. If management switched to hydroelectric, they would eliminate waste heat and gases.
Cons of Using Hydroelectric Power for Data Centers
While hydropower has many benefits, there are also some downsides.
> Infrastructure Is Costly to Construct
Even though hydropower is relatively cheap, retrofitting fossil-fuel-powered data centers is not. Since expansions and upgrades can be costly, decision-makers should carefully consider their future electricity needs. What happens if the plant can’t accommodate scaling?
> Needs a River, Tide, or Reservoir to Function
Hydroelectricity requires a plentiful nearby water source, considerably limiting viable construction locations. Since rivers support diverse habitats, developing with sustainability in mind will further limit companies’ options.
> Could Contribute to Habitat Destruction
Building a dam or reservoir to supply energy solely to a server warehouse increases the facility’s physical footprint, leading to widespread habitat destruction. Construction and operation can raise water temperatures, reduce flow rates, and trap sediment.
As a result, nearby wildlife may struggle. For instance, migrating fish can’t swim upstream without a fish ladder or elevator—structures that help them move up and over dams. This would have a ripple effect on nearby foliage and predators.
> Is Less Reliable Than Fossil Fuels
Technically, hydropower may be less reliable than abundant fossil fuels like coal or oil. What happens when a period of low precipitation lowers water levels? A bare riverbed can’t contribute to sustainable electricity production.
How Hydropower Impacts Data Center Sustainability
Are there enough existing hydropower buildings to supply today’s data centers? The U.S. has over 2,250 hydroelectric plants with a total generating capacity of roughly 80 gigawatts. In 2022, they accounted for 28.7% of electricity generated from renewable sources. There are also dozens of pumped storage plants, which produce 22 GW.
Currently, there aren’t enough hydroelectric power plants to match the demands of U.S.-based data centers. Even in areas where they are available, access can become a problem. These are public facilities, so they provide electricity to hospitals, factories, and homes. Relying on them means risking rolling blackouts for locals.
This scenario isn’t hypothetical. Grant County, Washington, has two public dams. For decades, that was enough. The county was even selling excess across the Northwest. However, local officials offered massive tax breaks to wealthy data center companies, believing they would provide economic benefits in exchange. Some contracts even guaranteed access to the public’s hydropower.
These resource-intensive structures have caused a local energy crisis. Utility officials say those two dams will no longer be sufficient by 2025 — the county won’t be able to produce or import enough fuel to meet its electricity demand.
The obvious solution is for companies to build their own hydroelectric buildings. However, the average cost of installing one in 2022 was $2,881 per kilowatt, up from $1,482 a decade prior. There is also the potential for emissions and habitat destruction to consider. While this renewable resource could be powerful, decision-makers must be strategic.
Hydroelectric Power Can Revolutionize Sustainability
While counties may prefer to keep their fossil-fired plants, hydropower offers considerably more benefits—including fewer emissions and less pollution. Its location limitations may prevent it from being a wide-scale solution, but it could drastically improve this sector’s sustainability, driving eco-friendly innovation.