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#data-centre-siting-externalities

Issues, solutions, and case studies for data-centre-siting-externalities

Issues 5

#00210Siting deals are negotiated under non-disclosure agreements and operating data is withheld, so communities cannot evaluate the trade

Around 80% of Virginia localities with data-center activity have NDAs in place. Where reporting is mandatory it is widely ignored: the EU database's first cycle saw 36% participation with no consequences for the rest.

#00209Backup generators and on-site turbines add air pollution to neighbourhoods that often already fail air quality standards

Backup diesel generators and on-site gas turbines concentrate NOx and fine particulates in host neighbourhoods, many of which already fail ozone standards. At one Memphis site, 35 turbines were installed against a permit issued for 15.

region

#00208Large data-center load shifts grid and capacity costs onto households and other ratepayers

PJM's independent market monitor attributed 38% of the latest capacity auction cost to data-centers. Speculative interconnection requests inflate queues further, and where cost-allocation rules are unchanged the resulting charges spread across all customers.

national

#00207data-center cooling and its electricity supply draw freshwater from basins that are already stressed

Evaporative cooling consumes 1 to 9 litres per kWh on site, and the electricity behind it carries roughly ten times more embedded water. National totals look trivial while single cities reach 40% of municipal use, so the harm is basin-scale and invisible in aggregate.

#00204Data-centers siting concentrates noise, water, air and cost burdens on host communities while the benefits are dispersed

Residents near hyperscale data-centers bear concentrated cooling noise, water draw, generator emissions and grid cost shifts, while the compute benefits accrue regionally or nationally. US opposition groups grew from 396 to 833 across 49 states in three months.

Solutions 5

#00220Create a large-load tariff class with minimum take, long contract term and exit fees

Put customers above roughly 25 MW in their own rate class, obliged to pay for 85% of contracted capacity for 12–14 years with collateral and exit fees. After Ohio approved one, the utility's large-load forecast fell by half, revealing much of the queue as speculative.

national

#00218Build closed-loop cooling with no evaporative make-up, and publish the energy penalty it costs

Fill the cooling loop once and reject heat mechanically instead of by evaporation, eliminating ongoing water draw. Microsoft claims this avoids over 125 million litres per facility per year. The trade is electricity, and no operator has published the PUE penalty.

#00214Site compute underground in disused mines, caverns and bunkers

Put facilities in worked-out mines, rock caverns, and decommissioned bunkers, where stable rock temperature, natural cold water, and hundreds of feet of overburden remove noise and visual impact. Operating commercially for years at Lefdal in Norway and Iron Mountain in Pennsylvan

#00213Relocate compute into orbit, powered by continuous sunlight and cooled by radiators

Place accelerators on satellites in sun-synchronous orbit, drawing near-continuous solar power, rejecting heat through radiators, and linking satellites by free-space optical fabric. One GPU has flown; independent analyses put costs at least an order of magnitude above equivalent

#00212Relocate compute into submerged or floating offshore modules cooled by seawater

Seal servers in nitrogen-filled modules on the seabed or floating platforms, using seawater as the heat sink and removing the facility from any residential area. Demonstrated at 24 MW in Shanghai. Microsoft proved the concept off Orkney, then declined to commercialise it.

Case studies 8

Microsoft · since 2024 · City

Microsoft announced its closed-loop, zero-water-evaporation datacentre design in December 2024, naming Mount Pleasant, Wisconsin and Phoenix, Arizona as the first sites, with further builds coming online from late 2027.…

Claimed water avoided per facility>125,000,000litres per year
Microsoft fleet WUE0.27 (FY2025)L/kWh

Microsoft · 3 sources

Gerard Antoun

Google, with Uruguay's Ministry of Environment · 2023–2024 · City

Google's original Canelones facility design required approximately 7.6 million litres of potable water per day for evaporative cooling. During Uruguay's 2023 drought, Montevideo's utility blended brackish estuary water…

Potable water draw in original design7600000litres per day
Potable water draw in approved air-cooled design76000000litres per day

2 sources

Gerard Antoun

Virginia State Corporation Commission, on application by Dominion Energy Virginia · since 2026 · Region

Virginia's State Corporation Commission approved a new GS-5 rate class for customers at or above 25 MW with a 75% load factor, effective 1 January 2027. Terms include a 14-year minimum contract, payment of at least 85%…

Applicability threshold25 MW at 75% load factorMW
Minimum contract term14years

2 sources

Gerard Antoun

Public Utilities Commission of Ohio, on application by AEP Ohio · since 2025 · Region

The Public Utilities Commission of Ohio approved a dedicated tariff for data-center customers on 9 July 2025, on application by AEP Ohio. Customers at or above 25 MW must pay for at least 85% of contracted capacity rega…

Utility large-load forecast after tariff-50%% change
Applicability threshold25MW

3 sources

Gerard Antoun

Starcloud (formerly Lumen Orbit), satellite bus by Astro Digital, launch by SpaceX · since 2025 · Global

Starcloud-1 launched on a Falcon 9 from Cape Canaveral on 2 November 2025 into a 325 km orbit: a 60 kg satellite on an Astro Digital Corvus-Micro bus carrying a single Nvidia H100, with a design life of approximately 11…

Satellite mass60kg
Accelerators flown1Nvidia H100

Venture capital; $200 million raised in total, including a $170 million Series A led by Benchmark and EQT at a $1.1 billion valuation · 4 sources

Gerard Antoun

Nautilus Data Technologies · since 2021 · City

Nautilus Data Technologies commissioned a Tier III certified floating barge data-center on the Stockton, California waterway in 2021, providing 6.5 MW of critical IT load across ~20,000 sq ft at rack densities of ~55 kW…

Critical IT load6.5MW
Rack density supported~55kW per rack

Venture capital · 1 source

Gerard Antoun

HiCloud Technology, with Shenergy Group, Shanghai Telecom and CCCC Third Harbor Engineering · since 2025 · City

The only commercial-scale underwater data-center in operation as of 2026. Servers sit in sealed watertight units offshore from Lingang, positioned between phases of an existing offshore wind farm; construction completed…

Phase 1 capacity2.3MW
Full build capacity24MW

$226M · Consortium of Chinese state-linked enterprises · 3 sources

Gerard Antoun

Microsoft Research, with the European Marine Energy Centre · 2018–2020 · Neighborhood

Microsoft deployed a sealed, nitrogen-filled cylindrical vessel containing 864 servers to the seabed at 117 feet off Orkney, powered by the islands' wind and solar grid, and retrieved it two years later. Phase 1 had bee…

Servers deployed864servers
Deployment depth117feet

Microsoft (corporate research) · 3 sources

Gerard Antoun

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