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AI, Grid Stress, and the Rising Cost of Cooling

Discover how AI-driven data centers are reshaping electricity demand, prices, and why smarter HVAC and efficiency are critical for sustainable growth.

Ava Montini

Feb 24, 2026

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How artificial intelligence is reshaping electricity markets and redefining efficiency inside data centers and real estate portfolios


Across North America, electricity load forecasts are being revised upward as hyperscale campuses, colocation expansions, and AI clusters come online. Grid operators are responding to a new reality: computing growth is accelerating faster than generation and transmission capacity.



Global data center electricity consumption could reach 1,000 terawatt-hours annually by 2030, roughly equivalent to the annual consumption of Japan. In the United States, PJM Interconnection has reported a sharp increase in capacity auction prices as new large-load customers, including AI-driven data centers, enter the interconnection queue.


Goldman Sachs forecasts a 175% surge in global data center power demand by 2030, a significant upward revision driven by the rapid adoption of AI infrastructure and intensive GPU requirements. This surge is expected to raise data centers’ share of U.S. electricity consumption to approximately 8% and contribute to a 10–15% increase in European power demand over the next decade.


AI Workloads Are Structurally Different



Previous digital expansion cycles, including early cloud adoption, drove steady and predictable growth. AI changes the profile of demand.


Training large language models requires sustained, high-density compute over extended periods. Inference activity multiplies that demand across millions of daily interactions. Rack densities are climbing. Thermal loads are intensifying. Mechanical systems are operating closer to their performance limits for longer durations.


Higher density translates directly into greater airflow sensitivity and tighter thermal tolerances. Small inefficiencies that were once negligible now compound materially across 8,760 operating hours per year.


Cooling Is a Major Line Item, Not a Support Function


In many modern facilities, mechanical systems account for 30 to 40 percent of total site energy consumption. That includes chillers, pumps, CRAH and CRAC units, and most consistently, fans.


Fan energy is particularly sensitive to system resistance. Based on affinity laws, fan power scales approximately with the cube of airflow. As static pressure increases, required fan energy rises disproportionately. Even modest increases in resistance can translate into meaningful increases in kilowatt draw.

Filtration is one of the most persistent contributors to system resistance. As filters load or when they have a high baseline pressure drop, fans compensate continuously. This is not a temporary event. It is a compounding operational penalty.


For a 20-megawatt data center, cooling and mechanical systems often account for 30 to 40 percent of total facility energy use. That equates to roughly 6 to 8 megawatts dedicated to cooling infrastructure.


Even modest efficiency improvements at this scale are financially meaningful. A 5 percent reduction in cooling-related fan energy would reduce load by approximately 300 to 400 kilowatts. At an electricity price of $0.10 per kilowatt-hour, that translates to roughly $260,000 to $350,000 in annual energy cost savings, before considering demand charges or capacity pricing exposure.

In regions with constrained supply or rising capacity costs, the economic value of that reduction increases further.


Grid Stress Is Changing the Economics of Efficiency


Electricity markets are tightening in regions experiencing concentrated data center growth. Capacity auctions in PJM have reflected the strain of new large-load interconnection requests. Transmission upgrades require time. Generation additions face permitting and capital constraints.


As reserve margins narrow, price volatility increases. Capacity charges, peak demand pricing, and long-term power purchase agreements are becoming more complex and more expensive.


For data center operators, efficiency becomes a hedge against volatility. Each kilowatt not consumed reduces exposure to price swings and capacity premiums. For REITs with diversified portfolios, it strengthens net operating income resilience across properties facing similar market pressures.

Scope 2 emissions reporting adds another layer of accountability. Institutional investors increasingly evaluate carbon intensity alongside operating performance. Mechanical efficiency directly influences both.

Energy savings are no longer incremental improvements. They are risk mitigation tools.


Designing for AI Without Expanding Energy Budgets


The strategic response does not require speculative technology. It requires disciplined optimization of existing systems.


Three priorities stand out:


1. Reduce persistent static pressure

Airflow resistance accumulates silently over time. Low-pressure, high-efficiency filtration technologies reduce baseline resistance while maintaining particulate capture performance. This lowers continuous fan energy and protects downstream equipment.


2. Optimize thermal management architecture

Variable-speed fans, containment strategies, and calibrated ventilation align airflow with actual load rather than worst-case assumptions. This stabilizes thermal performance under higher rack densities.


3. Institutionalize monitoring-based commissioning

Continuous diagnostics prevent efficiency drift. Small degradations in airflow or heat exchange are corrected before they become embedded in long-term energy profiles.



The Competitive Advantage of Thermodynamic Discipline


Artificial intelligence will continue to expand electricity demand. That trajectory is supported by credible projections from global energy authorities and financial institutions. The constraint is not computing ambition. It is infrastructure capacity.

Facilities that treat thermodynamic efficiency as core infrastructure rather than as an ancillary optimization will outperform in this environment. Lower static pressure, calibrated airflow, and disciplined mechanical management translate directly into reduced exposure to grid stress and electricity price escalation.

The economics are clear. As AI reshapes the demand curve, cooling efficiency becomes one of the most controllable variables in an increasingly uncontrollable market.


Data centers are powering intelligence.

Efficiency will determine who powers it profitably.

When More Ventilation Isn’t Always Better: The Emerging Case for Outside Air Reduction

  • Writer: Ava Montini
    Ava Montini
  • Sep 12, 2025
  • 6 min read

At the height of the COVID-19 pandemic, building operators were given one clear directive: get as much fresh outside air into the building as possible.


The reasoning was simple and sound: diluting indoor air with outside air reduced the concentration of airborne viruses and gave occupants a greater sense of safety. Schools cranked open dampers, office towers increased their minimum ventilation rates, and healthcare facilities invested heavily in boosting air exchanges.


That strategy worked in an emergency, but it also came at a cost. Energy bills spiked as HVAC systems struggled to heat and cool the constant flow of unconditioned outside air. Humidity control became more difficult. Comfort complaints rose. And in some regions, the “fresh air” being drawn inside was anything but fresh. Things like wildfire smoke, traffic emissions, and industrial pollutants all found their way indoors.


Fast forward to today, and the conversation has shifted. ASHRAE and other standard-setting bodies have recognized that the blanket approach of maximum ventilation isn’t sustainable as a long-term practice.


As we’ve moved past the emergency phase, a more nuanced picture is emerging. Outside air confers benefits (especially in terms of health), but it also imposes costs: energy, comfort, mechanical wear, sometimes even polluted air if your outdoor environment isn’t clean. ASHRAE, energy codes, and HVAC practice are now pushing toward finding balance. One big part of that shift is outside air reduction (or controlling outside air to what’s necessary, rather than “as much as possible”).


Why Reduce Outside Air? What Are the Trade-Offs


To see why reducing outside air is resurfacing, it's helpful to walk through what the costs are and what the benefits might be of dialling things back.



The Costs of Too Much Outside Air

  1. Energy Use

    • Heating and cooling costs skyrocket when you have to condition large volumes of outdoor air, especially in extreme climates. In summer, bringing in hot, humid air means your cooling system works harder; in winter, cold air needs heating.

    • Beyond simply heating/cooling, there’s also fan energy. More outside air often means more airflow through dampers, larger pressure differentials, etc.

  2. Visual Comfort / Thermal Discomfort

    • Cold drafts in winter; humid, sweaty feelings in summer if moist outdoor air isn’t adequately dehumidified.

    • Inconsistent thermal zones due to mixing outside air with return or recirculated air.

  3. Mechanical Wear & Maintenance

    • Outside air includes particulates, pollutants, and moisture. Therefore filters, coils, ducts, and dampers need more maintenance.

    • When outside air brings in pollutants or high humidity, it can cause corrosion, mold, or damage to finish materials.

  4. Indoor Air Quality Considerations

    • Ironically, bringing in outside air isn’t always “cleaner”; if outdoor air is polluted (e.g. wildfire smoke, high PM2.5, industrial pollution), ventilation could degrade indoor air quality.


The Benefits of Reducing Outside Air (When Done Right)

  1. Energy Savings

    • Reduced heating/cooling loads → lower utility bills.

    • In some ASHRAE Standard 90.1 addenda / code changes, reducing outdoor air intake is explicitly a path toward improved energy efficiency. For example, changes made in standard 90.1-2019 (and later) allow reduced outside air intake in central systems and reduced minimum flows in VAV (variable air volume) boxes. Energy Codes

    • Buildings with moderated outside air approaches (versus maximum outside air strategy) can often hit much better energy performance, especially in climates with extreme temperatures.

  2. Comfort and Building Stability

    • More stable indoor temperatures, less risk of humidity spikes or condensation issues.

    • Better ability to maintain indoor comfort metrics, which improves occupant satisfaction.

  3. Cost Predictability & Maintenance Savings

    • Less strain on HVAC equipment.

    • Lower maintenance cost due to fewer introduced contaminants, less filter load, etc.

  4. Health / IAQ Still Possible

    • By using strategies such as proper filtration (appropriately rated filters), UVGI, good air distribution, and periodic flushing, you can maintain healthy indoor air even with more controlled outside air.

    • ASHRAE guidance, post-COVID, suggests that ventilation + filtration + other engineering controls together are the path—not merely “open all dampers.” ASHRAE


How ASHRAE & Codes Are Shifting



The push to balance ventilation, energy and comfort is finding formal expression in updated standards and codes. Some key threads:

  • ASHRAE Standard 62.1 (Ventilation for Acceptable Indoor Air Quality) has been the go-to for minimum ventilation. But recent addenda adjust how outside air rates are calculated, especially in Variable Air Volume (VAV) systems, enabling more dynamic or performance-based approaches. Energy Codes

  • ASHRAE Standard 90.1 (Energy Standard for Buildings Except Low-Rise Residential Buildings) is increasingly recognizing that “more outside air” is not always the optimal path for energy efficiency. The 2019 to 2022 versions include addenda that allow for reduced outdoor air intake in some scenarios and model outside air intake more precisely. Energy Codes

  • Post-COVID Guidance from the Epidemic Task Force and other committees acknowledges that increased ventilation is helpful for infectious disease mitigation—but also warns about the cost, feasibility, and trade-offs. ASHRAE’s filtration & disinfection guidance, for instance, emphasizes that filters should be sealed well, systems should be maintained, and energy impacts considered. ASHRAE

  • There is growing interest in “ventilation efficiency” (i.e. how well the outdoor air being brought in actually participates in diluting contaminant levels) vs simply “bringing in more air.” That opens doors for smarter design: placement of supply/exhaust, air distribution patterns, possibly recirculation with clean filtration, and technology like UVGI in ducts. arXiv


What Building Owners / Managers Should Do

If you’re in charge of managing indoor air quality, HVAC systems, or the budget, here are some practical steps, questions, and strategies to move toward smart outside air reduction without compromising health or compliance.

Step

What to Do

Key Questions & Considerations

1. Audit your current system

Measure how much outside air is being brought in currently. Identify how often dampers are fully open, what settings for minimum outside air are. Document past energy bills, thermal comfort complaints.

Do you really need to run at 100 % outdoor air all the time? What’s the outside-air fraction during non-peak periods? How often are you using demand-controlled ventilation?

2. Model / simulate

Use energy modelling (or vendor/engineering consultants) to simulate what energy & comfort impact you’d see from reducing outside air to code minimum vs current levels vs maximum “pandemic level.” Include local climate, outdoor pollutant levels.

What’s your climate? How extreme are winters / summers? What are outdoor pollution or humidity challenges? Can your HVAC system handle variable loads well?

3. Filter & clean

If you reduce outside air, you’re inherently relying more on “recirculation / indoor air cleaning” to maintain IAQ. Ensure your filters are appropriate efficiency, well sealed, replaced regularly. Consider supplementary measures (UV, air cleaners, HEPA, etc.).

What is the MERV rating you’re using? Can your fan/coil handle higher efficiencies without losing capacity? How about maintenance cycles?

4. Design flexibility & control

Make systems adjustable—both in terms of outdoor air intake (dampers, controls) and monitoring (CO₂, PM2.5, VOCs). This allows ramping up when needed, and reducing when risk is low or when conditions are unfavorable.

Do you have sensors to detect indoor air quality? Do your controls allow override or programmed changes? Are occupants/management aware and aligned with policy?

5. Engage stakeholders

Staff, occupants, board members often worry that reducing outside air means compromising health. Transparency helps: show them energy/comfort data, IAQ readings, trade-offs. Sometimes policies (e.g. open windows during good outdoor air, closed when it’s bad) help.

What are occupant expectations? Do you have health policies in place? Who signs off on trade-offs (e.g. budget vs comfort)?

6. Monitor & adjust

After changes, monitor indoor environment (temperature, humidity, CO₂, pollutant levels), energy, comfort complaints. Be ready to adjust. Outside air isn’t a static setting; it’s dynamic.

How often will you review? What thresholds trigger change? For example: high CO₂ or PM2.5, or outdoor air pollution alerts, might warrant reducing outside air.


What This Means for Policy, Standards, & the Future



Energy codes & carbon targets

As jurisdictions push toward net zero or carbon reduction, the HVAC energy penalty of over-ventilating becomes a liability. Efficient outdoor air management helps reduce energy use, which helps reduce emissions. ASHRAE 90.1’s newer addenda are already projecting energy savings from smarter outside air settings. Energy Codes


Health & resilience

Pandemics have taught us that buildings need flexibility—not fixed, extreme settings. Systems that can adapt: e.g., crank up ventilation when risk is high, pull back otherwise—are more resilient. Outdoor air reduction is part of enabling that flexibility.


Indoor air quality (IAQ) & occupant wellness

People increasingly expect buildings (schools, offices, public spaces) to deliver both clean air and comfort without extreme energy waste. Outside air reduction done thoughtfully helps spread the benefits: lower energy bills, better comfort, less waste.


Cost pressures

Energy costs are volatile. Running massive outside air loads just to “play it safe” all the time may no longer be financially justified, especially in regions with high energy costs or challenging climates.


Getting Outside Air Right, Not Just More


After so many years where the message was “more outside air, more safety,” we’re entering a more mature phase—one where how outside air is managed, rather than just how much, becomes the critical question.


Reducing outside air (when it can be done safely) doesn’t mean lowering standards or compromising on health. It means using all the tools: ventilation, filtration, controls and monitoring, to deliver indoor air quality that is healthy, comfortable, sustainable and cost-effective.


If you’re managing buildings, this is the moment to rethink your default settings. Push for audits, invest in systems and sensors, communicate clearly with occupants. Because the buildings that get this right will be healthier, more resilient, and much more efficient in the long run.



 
 

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