How Northwest Data Centers Are Tackling Energy and Climate Challenges: Insights for a Sustainable Future

Kaleigh Harrison

Oregon and Washington are seeing a boom in AI-driven data centers, significantly impacting their energy landscape. With around 200 facilities, Oregon is now second in the U.S. for data center capacity, just behind Virginia. This growth is fueled by the states’ clean energy and favorable tax incentives, making them attractive for tech companies.

However, the rise of these data centers is leading to heightened electricity consumption. The Electric Power Research Institute (EPRI) reports that data centers use about 11% of Oregon’s power and 6% in Washington. The demand is growing even faster due to advancements in AI; some new facilities require as much electricity as a small city.

While both states are working to reduce carbon emissions by reducing coal use and investing in renewable energy, there are challenges. Only a few utilities are managing the new data center loads effectively, and five of those are increasingly turning to “unspecified power.” This often means using more carbon-intensive sources rather than relying solely on eco-friendly hydropower.

Interestingly, many large data centers are unable to tap into hydropower due to federal restrictions. The Northwest Power Act limitations mean that publicly owned utilities can’t allocate Bonneville Power Administration energy for new single loads over 10 megawatts. This leaves large companies in need of energy without access to some of the cleanest sources available.

Some experts believe that adapting to these challenges might inspire innovation instead of driving tech companies away to states with fewer regulations. One idea is to let tech companies become “anchor tenants.” They would commit to purchasing enough energy to support the development of new grid infrastructure, which could enhance clean energy delivery in the area.

Oregon’s proposed HB 3546 aims to create a special rate for large data centers, helping them share the costs of grid investments. This could set a new standard for how private investment can help manage public resources effectively.

Recent programs in places like Nevada have shown promise. For instance, NV Energy and Google partnered to create a tailored tariff for newer geothermal energy, demonstrating how utilities and tech companies can collaborate rather than work in isolation.

Moreover, adapting how data centers interact with the grid could unlock significant potential. Studies suggest that if data centers could temporarily reduce power usage—just a few hours a week—they could support an additional 3.8 GW of capacity without needing to expand the grid. As AI workloads become more adaptable, this “grid-interactive” approach is increasingly viable.

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sustainability, energy efficiency, environmental leadership, ESG strategies, business trends, renewable energy, corporate sustainability, energy management