Data center development is raising major concerns over Michigan’s electric grid.
DTE Energy is looking to allocate north of four gigawatts of electricity to its data center projects, including sites in Washtenaw and Wayne counties.
The high energy-consuming industry is coming at a time when the state's electric infrastructure is aging, demand has stagnated and upgrades are needed.
How much energy data centers need
Hyperscale data centers use a different kind of chip than the smaller data centers that have been around for decades. These high-powered, fast processing chips use immense amounts of energy.
Erik Nordman is the director of the Michigan State University Institute of Public Utilities. Norman said these data centers also eat up more energy than manufacturers like a large automotive factory.
DTE’s Saline Township data center will require 1.4 gigawatts of electricity.
“Which is equivalent to 1.1 million homes,” Nordman said. “That would be 25% of DTE’s current load. It's really enormous. It's slightly less than the entire electricity consumption of the City of Detroit.”
Nordman said that number pans out to almost 10% of the state’s energy consumption. The Mitten’s peak electrical load is about 18 gigawatts.
It would take roughly two nuclear plants the size of the soon-to-restart Palisades Nuclear Plant. The plant will generate 800 megawatts of electricity (which is 0.8 of a gigawatt).
DTE has more data center projects in the pipeline. The company is in the process of getting an additional three gigawatts – 3,000 megawatts – approved for data centers, according to an investor report from the company.
Those include the recently proposed Project Cannoli and the University of Michigan Los Alamos project.
Michael Bommarito is a researcher and founder of nonprofit The Institute for the Advancement of Legal and Ethical AI.
Bommarito crunched the numbers and found it would take about six Palisades to power DTE’s 4.4 gigawatt data center pipeline.
That translates to about seven natural gas plants, three Monroe Power Plant-sized coal facilities or nearly 91 solar farms.
How that fits into Michigan’s grid
Nordman said the state’s demand for electricity has been pretty flat over the last two decades. While electrification has increased, advancements in efficiencies – like LED lightbulbs – have kept up.
There hasn’t been much population growth, and manufacturing has declined.
“The utilities would have to build new infrastructure to accommodate these immense demands from very large hyperscale data centers,” Nordman said.
Big data centers are trying to get tax incentives that went into effect last year. Part of the state’s requirements include generating 90% of the data center’s electricity from renewable sources within six years of operation.
Nordman said data center companies are “scrambling” to plug into the grid and start running.
But it takes time for power generators like a wind or solar farm to connect.
“There's something called the interconnection queue,” Nordman said. “You have to get in line to do the studies and connect to the grid to make sure that you know you're not going to disrupt the grid. That can take years – five, six, seven years or even longer – for projects to connect.”
So some data centers are using portable natural gas or repurposing inefficient generators from cruise ships and airplanes.
DTE is investing in more generation, including $10 billion in renewable energy and $2.5 billion in natural gas plants.
“All of it has to come online while simultaneously decommissioning Monroe and Belle River [coal plants],” Bommarito, the independent researcher, said. “Even without a single data center, the coal retirement cliff alone creates a generation gap that requires massive new construction on a fixed deadline.”
Still, not all the data centers being proposed in the state are likely going to actually be built.
Nordman said companies are taking a “throwing spaghetti at the wall and seeing what sticks” approach to proposing projects. A company might only need to build one, but they’ll propose several sites knowing that most aren’t going to work out.
“Either the community doesn't want it, or it turns out to be not a suitable site, or it's too expensive, or they find there's something wrong at that particular site that they're not able to connect to the grid as easily as they thought,” Nordman said.
