Nearly 160 data center projects have been paused or canceled since 2024 as communities challenge developments expected to sharply increase electricity and water demand, POLITICO’s Surge newsletter reported Tuesday. S&P Global projects that U.S. computing hubs will need 154 gigawatts of power by 2030, up from 50 gigawatts last year.
Who Controls the Resources
Dan Thompson, an analyst with 451 Research at S&P Global Energy, said the “social license to operate” has become a key issue for data center development over the last eight to 10 months. Roughly two-thirds of projects tracked by S&P Global face some kind of delay, he said, citing community pushback and pending legislation. “This is considered a key risk for projects that are in flight,” Thompson said on a webinar last week. “It’s across the country that we’re seeing this. We’re seeing pushback and challenges to data center development.”
Opposition spans conservative Texas, liberal New York and swing-state Pennsylvania. Each state has enacted measures in recent months to curb the data center boom. A Senate permitting reform bill would require data centers to pay for grid upgrades, while a Utah State University poll found opposition increased the closer a hypothetical data center was to a respondent’s home. Other opponents object to artificial intelligence and the companies developing it, wherever they operate.
Whether data centers raise electricity prices depends on power-contract structures and how much local grid work they require, said Tony Lenoir, associate director at 451 Research. “It’s a revolution within a revolution, if you will, and that is one of the core tensions we are dealing with today,” he said.
Permits, Projects and Public Costs
Stefanie Williams, 451 Research associate director, said delayed projects typically haven’t completed permitting and face local opposition to rezoning. The research group tracks 157 projects that developers have paused, severely delayed or canceled. Developers often wait for permits before ordering equipment and signing power supply agreements; delays can stretch timelines as companies confront five-year waits for equipment such as transformers and turbines.
Some developers are looking for communities with more permissive rules. Google initially planned a $1 billion data center in Linn County, Iowa. After the county adopted data center regulations, the company asked to have its site annexed by a neighboring community with more lenient rules. Williams said one key question is whether political leaders follow through on pledges to limit construction after the midterms. “It could be a question of watching what happens in the coming year,” she said.
The International Renewable Energy Agency said data centers are “particularly significant” to power demand because they can “grow faster than power-system infrastructure.” Its report calls for faster renewables-based electrification and says efficiency, grid expansion and flexibility matter as much as renewable deployment. Under a scenario where global temperatures exceed 1.5 degrees Celsius and later fall back, renewable installations would need to climb from 5.2 terawatts to 18.4 terawatts by 2035, while annual grid investments would need to increase from $500 million to $1 trillion. The report estimates the transition would require about $10.3 trillion each year and could cut electricity prices by as much as 15% by 2050.
Energy Policy and Who Pays
In Corpus Christi, a proposed desalination plant meant to supply water to the oil and gas industry has brought the Texas city close to a water-supply crisis, according to Inside Climate News and The Texas Newsroom. Eight years ago, companies agreed to pay for the plant in return for the city’s promise not to pressure them to reduce water consumption. The plant hasn’t materialized amid political dysfunction and the coronavirus pandemic, and the city has entered a drought.
A London School of Economics report assessing 36 of the world’s largest banks, including Goldman Sachs and Deutsche Bank, found half had weakened transparency efforts. Six disclose financing conditions for high-polluting sectors, and three have committed to ending financing for new oil and gas projects. Only half now have net-zero financing commitments. The report said banks remain at an early stage in enabling the transition and that the banks it assessed had reduced their low-carbon ambition overall, with some canceling commitments, targets and policies.
The policy measures in the reports and legislation set terms for infrastructure investment, grid costs and energy supply; the projected rise in data-center demand remains 154 gigawatts by 2030. Residents’ concerns about electricity and water have already shaped state policy and permitting fights.