Data Centers – A Threat to Power Supply or an Opportunity for Economic Growth? The Answer Might be “Yes.”

Earlier this month, it was announced that Enel North America signed a power purchase agreement (PPA) with the tech company, Meta, for 115 MW of the Oklahoma Rockhaven wind farm located in Murray and Carter counties (Power Technology). The energy would be used to power Meta’s data centers, although the specific data center or centers have not been mentioned by any source. In its most basic form, a PPA is essentially a contract between a buyer and seller of electricity which sets the rate to be paid for electricity over the duration of the agreement. This announcement from Enel and Meta comes at a time where the merits of renewable energy development continue to be hotly debated among Oklahoma’s legislators and the public, all while support for renewable energy at the federal level grows more uncertain day by day. In this blog entry, Vesta Strategic Solutions breaks down the link between data centers and energy usage, and weighs how business and politics are often at odds with one another, even in a self-proclaimed pro-business state like Oklahoma.

In order to understand how we got here, let’s first go back to the year 1945, when the first data center was completed at the University of Pennsylvania. This was a US Military Electrical Numerical Integrator and Computer (ENIAC), and it is an early example of the creation of a dedicated space for computing machinery (IBM). Fast-forward 80 years to 2025, and the United States now has over 5,000 data centers in operation (Datacentre Solutions). These centers account for 4.4 percent of total electricity consumption in the United States, and that figure is expected to grow to anywhere between 6.7 and 12 percent by 2028 (LBNL). According to a study by the real estate company, CBRE, data center inventory grew by 24.4 percent year-over-year while vacancy rates shrunk to anywhere from 0.9 to 2.4 percent from 1.8 and 6.7 percent, respectively (CBRE). Declining vacancy rates as construction continues to boom suggests demand is outpacing the current and projected supply.

Data center demand is driven by the rise in cloud computing and AI, and with that increase in demand, comes the opportunity, and perhaps the necessity, to expand construction of this infrastructure to less populated areas. This would come with the benefits of lower real estate and energy costs relative to the rest of the country, the availability of a diverse and robust energy supply, and availability of water for the data center’s cooling needs. However, there could be potential drawbacks to locating data centers in more rural areas such as local opposition, concern over environmental impacts, and challenges with meeting workforce needs. In response to a Freedom Brigade rally at the Oklahoma State Capitol where hundreds of Oklahomans gathered in opposition of commercial green energy projects, Representative Neil Hays stated, “The Oklahoma that I’m fighting for is not one I want to see littered with wind turbines, solar farms, powering AI data centers.” He later stated, “I’m so proud to be among you who fight for Oklahoma for our oil and gas energy and push back on the green scheme. Thank you.” (Fox23).

“The Oklahoma that I’m fighting for is not one I want to see littered with wind turbines, solar farms, powering AI data centers.” – Representative Neil Hays (R)

Interestingly, Facebook, owned by Meta, was used by Freedom Brigade to gather support, disseminate information about, and even arrange carpools for the rally at the Capitol in January. Facebook has been powered by 100 percent renewable energy since 2020, according to their own report. This phenomenon bears a striking similarity to the criticism of “social media warriors” who advocate for safe and fair working conditions from behind their latest smartphones containing cobalt procured by exploitative labor practices in other parts of the world. All of this is to say, the irony of using a platform powered by renewable energy to organize support against further expansion of the technology is not lost.

Representative Hays’ sentiment towards renewable energy and its applications is somewhat at odds from that of Oklahoma Governor Kevin Stitt. In his 2025 State of the State address, Stitt commented, “In my last state of the state, I said I wanted Oklahoma to be the high-tech data center capital of the world. That vision is becoming reality. Google continues to invest in its data center in Pryor, Oklahoma and now it’s one of its largest in the world. A few weeks ago, President Trump announced a $20 billion dollar investment in data centers across the country – and Oklahoma is on that list.” With a sustained increase in demand for data centers, and as they continue to be constructed across the country, they are projected to require even more energy from our grids that are often already strained. To meet the rise in demand, more electricity will have to be brought online, and in some cases, new transmission lines built. Exactly how and where to do that is perhaps the crux of the issue.

“In my last state of the state, I said I wanted Oklahoma to be the high-tech data center capital of the world. That vision is becoming reality.” – Oklahoma Governor Kevin Stitt

Even if no new data centers were to be built in Oklahoma, the state would continue to be impacted by the boom in construction through PPAs between buyers and sellers of electricity. The recent announcement about Meta’s PPA with Enel for Oklahoma wind power is just one example. In January 2025, Leeward Renewable Energy announced over 700 MW in solar projects would be installed in Oklahoma, which is partially supported by a long-term PPA with Google (Advanced Power Alliance). Despite some opposition in the state and reluctance to adopt renewable technologies to meet the growing energy demand, that seems to be the path forward for the OpenAI data center currently under construction in Abilene, TX.

When selecting a location, OpenAI prioritized those in proximity to power and water resources, but made no mention of whether the center would be primarily powered by renewables. However, like cities in Oklahoma, Abilene is also rich in wind, solar, and natural gas resources. In reference to the center under construction in Abilene, Crusoe CEO, Chase Lochmiller stated, “We try to build data centers in locations where we can access low-cost, clean and abundant energy resources. West Texas really fits that mold where it’s one of the most consistently windy and sunny places in the United States.” According to Lochmiller, wind power will be central to the project his company is building and there will be gas-fired generators as a backup power source. Despite President Trump’s opposition to wind power, Lochmiller hopes the administration would be fiscally pragmatic when wind is “actually the cheapest way to access energy.” (KFOR).

“We try to build data centers in locations where we can access low-cost, clean and abundant energy resources. West Texas really fits that mold where it’s one of the most consistently windy and sunny places in the United States.” – Chase Lochmiller, Crusoe CEO

Directly following his mention of President Trump’s $20 billion investment in data centers, Governor Stitt stated, “Those of us in this room know there is no better place than Oklahoma. There is a massive opportunity to create more jobs for people in our state and to continue to put us on the map as the best state for business.” Later in his address, Stitt attributed the state’s economic success to a combination of business-friendly policies and Oklahoma’s wealth of natural resources. However, there is still pushback from legislators and their constituents. To date, over 40 bills related to energy have been filed in Oklahoma this legislative session, and the vast majority of bills on renewable energy call for tighter restrictions on siting and development. Examples include HB1989, HB1156, HB1263, and SB1026 just to name a few. See the Vesta Strategic Solutions January 2025 Policy Brief for more information on Oklahoma’s proposed energy legislation.

The anti-renewable energy sentiment reflected in many of the bills coming out of the Oklahoma legislature seems to contradict Governor Stitt’s vision for the state. In his State of the State address, Stitt commented, “Our energy industry is a driving force in our economy, and when they are free from politically motivated barriers and overregulation, they can power our nation and the world. That means more businesses can come online and more electricity can be generated in our state. I want to make 2025 the year of the Energy Abundance Agenda and continue to unleash Oklahoma’s energy potential.” This is true – let the energy markets work and let the resources that provide the lowest cost to Oklahoma businesses and residents flow.

“Our energy industry is a driving force in our economy, and when they are free from politically motivated barriers and overregulation, they can power our nation and the world.” – Oklahoma Governor Kevin Stitt

At the same time, Representative Hays’ apprehension towards renewable energy and data centers in the state is not completely unfounded. The rise of AI brings a lot of uncertainty for the workforce of today and tomorrow, and Oklahoma residents are rightfully concerned about how allowing data centers to flourish on Oklahoma soil could potentially facilitate the loss of our own jobs, albeit in ways that we cannot completely predict or foresee at the present moment. Not to mention, wind farms, solar arrays, and warehouse-sized buildings for the express purpose of housing servers are simply unsightly to a lot of people, particularly for those in more rural areas who would like to keep them that way.

One potential solution to the rise in demand for data centers is to repurpose abandoned shopping malls, existing mall footprints, or other unused commercial spaces. Malls are typically already located in more developed or suburban areas, so there would likely be less pushback on aesthetics, if any, since that land was already being used for a large structure. However, the power still has to come from somewhere, and the same resistance could arise if a shopping mall data center is reliant upon power from a wind farm that someone doesn’t want in their backyard. Additionally, residents don’t want to see big companies selling power from a PPA back to the market to turn a profit while they themselves are subject to higher energy prices during times of strain on the grid. Essentially, why should the largest consumers of energy be so disproportionately rewarded for saving it? Some PPAs could make this industry an even tougher sell for Oklahomans, as residents likely don’t want large companies benefitting from a locked-in price over time while regular citizens are subject to fluctuations in price, particularly during times of peak demand.

“Those of us in this room know there is no better place than Oklahoma. There is a massive opportunity to create more jobs for people in our state and to continue to put us on the map as the best state for business.” – Oklahoma Governor Kevin Stitt

There has been an “either-or” mentality around energy for far too long; Oklahoma is rich in oil, natural gas, wind, and solar resources, and the success of one industry should not dictate how the others are allowed to participate in the energy economy. While it remains to be seen what this year will bring for renewable energy development, Oklahoma’s abundant land and resources along with business-friendly policies continue to attract investments in our state. Oklahoma continues to experience post-pandemic population growth, and with that growth comes an increase in energy demand at the residential level, independent of any new data center construction and operation, or expansion of other industries. This growth presents a tremendous opportunity for the state’s businesses and communities to thrive while further attracting and retaining top talent for the workforce of today and tomorrow. To reiterate what Governor Stitt said in his State of the State address, “Those of us in this room know there is no better place than Oklahoma.” I wholeheartedly agree, and I believe we can all work together to keep it that way.

Author: Becca Palczynsky

References:

https://www.power-technology.com/news/meta-enel-wind-farm-oklahoma/?cf-view

https://eta-publications.lbl.gov/sites/default/files/2024-12/lbnl-2024-united-states-data-center-energy-usage-report.pdf

https://www.ibm.com/think/topics/data-centers

https://datacentre.solutions/news/68654/the-united-states-counts-5388-data-centres

https://eta-publications.lbl.gov/sites/default/files/2024-12/lbnl-2024-united-states-data-center-energy-usage-report.pdf

https://www.cbre.com/insights/reports/global-data-center-trends-2024

https://www.fox23.com/news/oklahomans-from-rural-counties-rally-against-commercial-green-energy-efforts-across-state/article_ea242534-cd42-11ef-99eb-dfe0b0485a58.html

https://sustainability.fb.com/wp-content/uploads/2021/04/Facebook_RenewableEnergy_April2021.pdf

https://oklahoma.gov/governor/newsroom/newsroom/2025/governor-stitt-delivers-2025-state-of-the-state-address.html

https://poweralliance.org/2025/01/15/lre-announces-over-700-mwac-of-new-solar-projects-in-oklahoma-supported-by-long-term-agreements-with-google/