Dive Brief:
- New York has halted construction of large data centers for one year as it assesses the environmental impact of such facilities, becoming the first state to impose such a moratorium in the country.
- Gov. Kathy Hochul signed an executive order Tuesday that targets the development of new hyperscale data centers — massive facilities designed to support artificial intelligence and cloud computing infrastructure. The pause will apply to data centers that use 50 megawatts of energy or more, according to the order.
- During this pause, New York will seek to create a regulatory framework to evaluate and address how such data centers impact the environment, energy demand, water use and other factors, including their impact on local communities, per the order.
Dive Insight:
Data center electricity consumption in the United States is projected to grow 300% over the next decade and account for nearly 38% of net electricity consumption through 2037, according to an estimate from the National Electrical Manufacturers Association.
In New York, there are around 12 gigawatts worth of data center load requests in the New York Independent System Operator interconnection queue as of last month; over 8 GW entered the lineup last year alone, according to the governor’s office.
The July 14 order cited concerns expressed by New Yorkers over the potential impacts of data centers, especially on energy consumption, water use, water and air quality, noise and the strains they cause on public infrastructure.
“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said in an accompanying press release announcing the moratorium. “New York will lead the way in creating the strongest standards in the nation for data center development.”
The moratorium will focus only on hyperscale data centers “using massive amounts of energy without delivering commensurate benefits to their host communities,” a spokesperson from the governor’s office told ESG Dive Tuesday. The pause will not impact facilities hosting medical research, educational programs and other small-scale operations that “pose little to no threat to their communities,” the spokesperson added.
Last month, New York’s State Legislature passed a bill that seeks to impose a one-year moratorium on the issuance of new data center permits and requires data centers to set energy efficiency goals. The bill also directs the Department of Environmental Conservation to complete an environmental impact report that tracks the “current and projected impacts on water, electricity, land use, tax revenue and incentives, and pollution, and other adverse impacts of data center operations in the state.”
The bill has yet to be signed by Hochul.
AI infrastructure experts argue that New York’s temporary pause on approving permits for data centers won’t solve its environmental problems, nor will it deter the demand for AI.
“Pausing data centers doesn’t pause the demand for AI,” Balaji Tammabattula, founder and chief operating officer of infrastructure, tech and energy solutions company BaRupOn, said in emailed comments to ESG Dive Wednesday. “That compute still gets built, just somewhere else, and often on a grid that’s dirtier than New York’s.”
Tammabattula said he agrees with Hochul that “everyday ratepayers should not be footing the bill for hyperscale growth,” but he argued that “the answer to that is making data centers bring their own power.”
Editor’s note: This story has been updated to add comments from NY Governor Kathy Hochul’s office and BaRupOn’s founder and COO.
