Hyperscaler Data Center Buildout A Sustainability Bane Boon or Both

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some analysts have urged skepticism of corporate claims to be “green” when using PPAs to
offset energy consumption given that there is a finite amount of renewable energy on the
grid and that utilities may respond to data center demand by building out unabated fossil
fuel infrastructure (Wu 2024).
The overall additionality of hyperscaler renewable energy procurement is unclear. Further
study on patterns of hyperscaler renewable energy procurement would be useful to deter-
mine the extent to which hyperscalers are supporting the deployment of new renewable
energy projects rather than simply purchasing renewable energy credits that might have
been purchased by other actors with demand for clean energy. Conversely, large load growth
by data centers could actually increase renewable energy deployment if utilities respond to
hyperscaler demand by building out new renewable sources.
Data Centers Driving Large Electricity Load Growth
The rise of hyperscalers is projected to produce load growth, complicating the work of grid
operators, electric power utilities, and other stakeholders to plan for and manage a clean
energy future. These hyperscalers are being driven by the commercialization of computa-
tionally intensive AI-driven tools, including large language models (LLMs) such as OpenAI’s
ChatGPT service. According to a McKinsey report, demand for AI-ready data center capac-
Figure 2. AI data centers drive US electricity load growth
Note: The share of server energy use by large scale data centers continues to rise, largely driven by AI workloads.
By 2028 it is expected that hyperscale and large colocation data centers will account for over 90% of server energy
consumption.
Source: Shehabi et al. (2024)
6 | Hyperscaler Data Center Buildout: A Sustainability Bane, Boon, or Both?