South Carolina’s Burgeoning Data Centers Trigger Need for Enhanced Natural Gas Power Generation

Data center power generation.

Data Centers Fuel Demand for New Natural Gas Plant in South Carolina

The rapidly increasing demand for data and its storage has significantly influenced the expansion of data centers across the globe. Among them, South Carolina has experienced substantial growth in the creation of data centers, provocatively escalating the state’s electricity needs. The state now grapples with the live issue of obtaining additional power, which has led to discussions of building a new natural gas plant to accommodate the spurring need for energy.

Debate on Power Demand and Power Generation in South Carolina

The debate among legislators to counter South Carolina’s burgeoning electricity consumption stemmed from a significantly complex bill. It was swiftly propelled through the House before colliding with strong resistance in the Senate. The Senators were thoughtful in requisitioning prolonged introspection into the state’s potential requirement for increased power generation. They proposed to rigorously examine the conditions in bill H.5118 that suggested to diminish many of the protections for ratepayers established post the V.C. Summer nuclear fiasco.

The plan to boost the state’s electric power availability is one aspect of the discourse; the other crucial aspect is managing and reducing the demand. Both the citizens and the government have integral roles to play in adopting more energy-efficient practices in their personal and professional lives. H.4087, a bill that could potentially become law in the forthcoming months, makes an important assertion and could considerably influence the demand side. The bill proposes phasing out sales tax exemptions that the state currently provides for new data centers and plans for a one-year moratorium on counties offering property tax or other incentives for new or expanded data centers.

Need for an Equilibrium Between Power Supply and Demand

The South Carolina government is well aware of the need for equilibrium between power supply and demand. Data centers, while seemingly profitable with their minimal demands on government services and property taxes, have significant downsides. They create few jobs, consume massive quantities of water, and most critically, they are gigantic and escalating energy consumers. Presently, South Carolina is home to at least nine large data centers, with four more planned primarily as a result of governmental economic development incentives.

The data centers under development are projected to utilize an approximate 800 megawatts of power daily. To put this figure in perspective, it is equivalent to the power consumed by 500,000 out of South Carolina’s 2.4 million households. That is, the four under-development data centers will consume more electricity than one-fifth of the state’s residential buildings.

On top of that, the data center’s energy consumption shows no signs of slowing. It is forecasted to surge by 50% from 2022 to 2026. These figures demand close attention from everyone, especially those senators who are apprehensive about Dominion and Santee Cooper imposing another colossal bill on ratepayers to build a gigantic natural-gas plant near Canadys.

The bill H.4087 initially began as a routine tax giveaway bill and vastly facilitated businesses to claim property and income tax incentives, even if they offered few jobs to the residents of South Carolina. Later, when the Senate Finance Committee introduced a provision to expand an existing sales tax exemption for data centers, it provided critics an opportunity to curtail their government incentives. This led to the cessation of new sales tax exemptions and a one-year break on local incentives which was unanimously passed by the Senate.

In conclusion, while data centers might want to continue to expand in South Carolina, the state should reconsider subsidies that attract them, especially until a better understanding and control of electricity needs is achieved. By striking a balance between energy demand and supply, South Carolina can continue its growth without compromising its resources.

South Carolina's Burgeoning Data Centers Trigger Need for Enhanced Natural Gas Power Generation

Author: HERE Irmo

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