Google says it can build data centers that work with the grid rather than against it, but experts and local residents remain skeptical. Industry watchdogs point to a basic financial incentive: utilities typically earn around 10% returns on new infrastructure, so they prefer building new lines and substations over squeezing more capacity out of what already exists.
David Pomerantz, executive director of the Energy and Policy Institute, told CNBC that a data center fitting neatly into the existing grid offers utilities little chance to make new money. He suggested one alternative is for data centers to provide the capital for grid upgrades at cheaper rates than the utility could, which would lower people's bills. But that, he said, is a big problem for the utility, and the fight is already emerging.
Still, Shah, speaking to CNBC, pointed to the Google/Xcel project in Minnesota as a good example of a data center acting as a catalyst for newer, greener technology. In that case, Google proposed a new way of doing things, the utility agreed, and ratepayers stand to benefit. The contrast highlights the tension between what data center developers say they can offer and the entrenched economics of the utility business.