AI data explosion in Mexico fuels growth in dirty energy

Data center boom helps drive fossil fuel revival

Mexico's grid is behind AI in its modernization

Natural gas as a temporary solution to Big Tech

Diana Baptista and Fintan MacDonnell

The lack of green power, despite promises by government and industry to increase capacity, has overloaded and increased local pollution.

Masheika Allgood is the founder of AllAI Consulting. She provides information on data center environmental impacts.

The data centers are huge warehouses that are the size of Olympic stadiums. They sprawl over industrial parks and house hundreds of servers, which consume a lot of energy. These servers power the most powerful technology companies, including Microsoft, Google, and Amazon.

The report stated that while Microsoft waits for the connection to Mexico's struggling power grid, it uses seven natural gas generators to provide 10.5 megawatts per year.

Marco del Prete is the Secretary of Sustainable Development for Queretaro. He said that Queretaro leads the way in data centers, as 200 MW energy demands have sparked a rush to upgrade infrastructure.

Del Prete said that the data centers coming to Queretaro invest in transmission and distribution infrastructure in order to alleviate the strain on the grid.

According to Adriana Rivera of the Mexican Association of Data Centers industry group, by 2030 the data center sector is expected to require 1.5 gigawatts of power.

According to Mexico's latest national energy plan, this would consume 5% of the new energy capacity it plans to build between now and 2030.

Microsoft's report on the environment said that grid connections would not be available until 2027. Natural gas generators are therefore a "cost-effective and accessible" temporary solution.

According to the report, generators emit about the same amount of CO2 as 2,180 gas-powered cars.

Microsoft stated that its data centers are powered by grid power and use backup generators only in emergency situations.

According to data from the government, President Claudia Sheinbaum, investment in solar energy is expected to drive more data centers in Mexico where, in 2024, 77% of energy will be generated by fossil fuels.

The Mexican Data Center Association has made bold commitments to the growing?industry in 2023. One of these is the pledge to make renewables their primary source of energy.

The goal was not given a time limit.

Microsoft's goal is to achieve 100% renewable electricity for its entire operation by 2025. It has also signed power purchase agreements with renewable energy providers in 24 countries.

Amazon and other Big Tech companies claim to have reached their goal of purchasing renewable energy projects that will match the total electricity consumption across all their global operations.

Even if the country improves its clean energy infrastructure, it is not clear how far data centers will be able to transition to renewable sources of energy.

The locals are already struggling with a bad energy infrastructure, which causes frequent power outages and increases in pollution.

In its national electric system 2024-2037 program, the Mexican Energy Secretary warned of an increase in electricity demand "boosted" by data centers expansion.

"Mexico is capable of producing much more energy, but its distribution and transmission network has not been modernized for many years," said Rivera who represents nine out of ten Mexican data centers.

"We won't stop relying on fossil fuels because power stability is so high."

Slow Transition

Data centers need stable, uninterrupted electricity to protect critical infrastructure and services, such as hospitals and banks, and they also require huge amounts of water and energy to prevent their servers from overheating.

By 2030, 100 datacenters are expected to be built in Mexico.

Rivera says that the renewable energy infrastructure of the country is not keeping up with demand and new technologies will be needed to bring stability to the system.

Battery storage technologies can fill the void left when the wind dies down or the sun sets, but are still not widely used.

The Mexican government announced an infrastructure plan in October to add 28 GW of energy by 2030. 80% of that would be renewable - mostly solar?energy.

According to the plan, by 2030, 38% of the energy produced in Mexico will come from clean and renewable sources, such as hydroelectricity or geothermal energy.

The data center industry, however, isn't waiting. It has already begun to bring in larger and more energy-intensive projects.

"First, it is important to establish ourselves as an industry. Rivera said that we need to strengthen the electrical grid... and later migrate to clean energy schemes.

There are many examples of how business goals can override environmental commitments.

CloudHQ, a U.S.-based tech company, announced in September that it would invest $4.8 billion for the construction of a data center with 900 MW. This is the largest ever built by a U.S. firm.

Keith Harney said that clean energy was important, but it "sometimes didn't have the pace we needed" in a recent press conference.

ACCELERATING FOSSIL FUELS

Around the world, the story of Mexico is a tug-of-war between AI's fast growth and its impact on climate change.

The demand for data centers accelerates fossil fuel energy consumption, even though the world is vowing to reduce it, Tamara Kneese, Director of the Climate, Technology and Justice Program, Data and Society Research Institute, a nonprofit independent organization, stated.

In the United States President Donald Trump issued executive orders in order to support the heavily polluting coal industry with a view to meeting the requirements of new data centres.

According to the International Energy Agency, fossil fuels like coal and natural gases provide around 56% of electricity consumed in data centers worldwide; renewables provide 27%.

Allgood, of AllAI Consulting, explained that data centers use diesel or gas generators either as their primary energy source or as a back-up during power outages.

Mexico exempts data centers located in industrial parks from releasing environmental impact reports. Therefore, the exact emissions levels of warehouses in Queretaro are a mystery.

Kneese said, "It is very difficult to hold someone accountable when you do not even know the details of what's going on."

(source: Reuters)