The Kalkaska data center project was recently abandoned after community pushback that resulted in death threats towards the developers.
Those fears aren’t limited to northern Michigan, and communities around the state are taking a closer look at these developments and the possible negative effects they could have on the community.
The real push to bring data centers to Michigan started last year after state lawmakers passed a series of tax breaks exempting data centers from use and sales tax, hoping to attract more investment. That worked, and ever since, there has been a lot of interest in bringing new data centers to the state. But homeowners still have a lot of fears about facilities like this coming to town.
Data centers in states like California and Texas have become massive drains on the local water supply because they use lakes and rivers to keep the servers cool. New technologies are available, though, including closed-loop systems that don’t use any outside water, but need a lot more energy to run.
A new $7 billion facility near Ann Arbor will be Michigan’s first hyperscale data facility, and it’s expected to use the new closed-loop system.
But eventually, it will need 1.4 gigawatts of power to cool the water on site and run the servers, according to DTE Energy. That’s enough power to light up one and a half million homes, and increase demand by 25% for the utility.
That effort has led to a series of protests, led by the Michigan chapter of the Sierra Club
The company behind the Kalkaska project told 9 and 10 News their planned facility would have been even larger than that, and they were planning to build a natural gas plant on the property to help offset those energy demands.
Proposals for gas plants like this have also been introduced in states like Wisconsin and Pennsylvania, but huge data centers like this still need to be connected to the main power grid, and investments in infrastructure and tax breaks could have been passed down to consumers, according to an in-depth analysis by Bloomberg News.
That study found a 267% spike in wholesale energy prices when a data center comes to town
We reached out to Consumers Energy, and they told us they can only comment on projects that are going forward, but generally, they are committed to providing power for any company that wants to move to their service area, and they are dedicated to finding new ways to do that when the need arises.
Even if area utilities did figure out a way to provide power at that scale, there would still be community risks if the AI bubble bursts.
Tech companies and utilities are spending billions on these data centers in hopes that the AI technology behind them will one day turn a profit. But if that doesn’t happen fast enough, these future data centers would have to close. That would leave utilities and taxpayers holding the bill for infrastructure that might never get used to its full potential.