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A partnership led by real estate developer Westbank and Pacific Gas and Electric Company (PG&E) announced a proposal for a net zero community located in downtown San Jose, including three new data centers and upwards of 4,000 residential units.
The partners shared the news alongside San Jose Mayor Matt Mahan at PG&E’s 2024 Innovation Summit presented by DISTRIBUTECH. PG&E says the proposal would transform downtown San Jose by responding to demand for both artificial intelligence (AI)-driven data centers and housing.
PG&E will power the area, providing approximately 200 megawatts of clean energy for the three data centers. A district energy system will connect the data centers and the surrounding community. The system allows excess heat from the data centers to be harnessed and repurposed to provide heating and hot water to neighboring buildings, which reduces the need for additional heating sources.
Additionally, PG&E argues reusing the excess heat allows for more efficient use of the electricity powering data centers, and helps lower electricity costs for tenants connected to the district energy system.
“This initiative is about addressing the need for housing and AI infrastructure while at the same time creating more inspiring communities that respond meaningfully to climate change. In PG&E we have found a partner who shares our vision and commitment. We’re looking forward to realizing this initiative together,” said Westbank CEO Ian Gillespie.
Plug and Play, a global innovation platform, plans to be the first tenant in the proposed community with their AI Center of Excellence. PG&E is a founding partner of this center, which will include an accelerator, exhibition halls, and a learning center for students and small business owners.
PG&E views data center growth as an opportunity and not a threat, with the potential for increased load and reduced unit costs of electricity for its broader customer base. They are taking a consultative approach to system planning and grid modernization, working closely with data center developers to find suitable locations and develop standard tariff offerings. The goal is to de-risk the development phase and ensure equitable cost allocation.
PG&E expects to see 3.5 GW of new capacity requested from data centers between now and 2029, according to an investor update released this summer by the utility. San Jose alone accounts for over half of the requested load, with 1,635 MW requested.
Technology giants like Microsoft, Google, and Amazon are significantly driving electricity demand, primarily through extensive and rapidly expanding data center operations. These data centers are essential for supporting cloud services, AI development, and other digital operations. The facilities require vast amounts of power to run servers, cooling systems, and other infrastructure needed to store and process massive amounts of data.
According to a new study released by EPRI, data centers could consume up to 9% of U.S. electricity generation by 2030 – more than double the amount currently used. This could create regional supply challenges, among other issues.
