New hyperscale data centers require considerable amounts of land, electricity, and water to operate. For this reason, they are more likely, but not exclusively, to be located in more urban areas.
Energy use
A hyperscale data center campus can occupy anywhere from 200 to more than 1,000 acres, with power needs that can surpass 1,000 megawatts, enough electricity to power hundreds of thousands of homes (ScienceInsights 2025). In 2023, U.S. data centers consumed 176 terawatt-hours (TWh), representing 4.4% of the nation's total electricity. This figure is forecast to reach 426 TWh by 2030, a 133% increase (Congressional Research Service 2025). This is a significant share for a single industrial sector.
To put this energy use in context, experts have estimated it takes about the same amount of energy to create a college term paper with ChatGPT as it does to run a microwave oven on full power for three minutes. This may not sound like much, but ChatGPT alone processes 2 billion queries daily and usage has nearly doubled since the beginning of 2025 (Singh 2025).
Energy demand from data centers in Indiana is projected to increase from about 1 TWh in 2025 to over 6.5 TWh in 2030, with the share of Indiana’s total energy demand rising from around 1% to 6.3% over that same time period (Ferreira et al. 2026). In northern Indiana, utilities forecast a handful of proposed hyperscale data centers will require more electricity by 2030 than all 6.8 million Hoosier households today (International Energy Agency 2025, Electric Power Research Institute 2024). To meet this demand, utilities are largely proposing new natural gas-fired power plants, extending the life of existing coal-fired power plants, and expanding transmission infrastructure, rather than leaning toward reliable and ready-to-build renewable sources such as solar, wind, and battery backup.
While it is possible for data centers to incorporate on-site renewable energy and energy storage into their designs or commit to purchasing renewable energy, the extent of power needed by these facilities means more electricity will be provided by fossil-based power plants.
There are concerns that ratepayers will end up being responsible for these additional costs, whether or not the infrastructure or data centers are in fact built. In 2025, Indiana enacted House Bill 1007, which provides an expedited process Indiana utilities may, but are not required to, use to seek approval for new large load customers such as data centers (Indiana General Assembly 2025). In some circumstances, the law requires proposed data centers to commit to covering some portion of the cost of increased generation, even if the project is not ultimately built.
The law, however, does not provide Indiana consumers full protection from the additional costs of providing electricity to these facilities either in the near term, given the magnitude of new infrastructure costs, or in the future, since data centers are only signing electric service contracts for approximately 15-year terms, whereas power infrastructure costs are often recovered over a 30-year period or longer.
Air quality
Data centers require on-site emergency generation in case of power grid failure. That emergency power could be provided by wind or solar power with battery storage, but, to date, most proposals deploy back-up diesel generators. For example, a data center in Fort Wayne includes 179 generators, along with 179 fuel storage tanks (Sherrow and Rowley 2025).
Diesel generators emit significant amounts of particulate matter, nitrogen oxides, sulfur dioxide, and carbon monoxide, all of which are associated with adverse health effects. They also emit carbon dioxide, a greenhouse gas. Emergency generators are typically tested monthly to ensure operation, but because they are expected to run infrequently, the U.S. Environmental Protection Agency (EPA) does not require them to use pollution controls that could lower emissions (U.S. Environmental Protection Agency n.d.).
Water Consumption
AI data centers also require millions of gallons of water each day for cooling, comparable to the water usage of a small city (Nguyen and Green 2025). In 2023, U.S. data centers used around 17.4 billion gallons of water, a number expected to double by 2028. In the next five years, they are projected to use more than 150 billion gallons, with the Midwest likely to feel the greatest impact (Shehabi et al. 2024, Volzer 2025). Additional generation at power plants also increases water consumption.
Noise
Operating all those servers and cooling equipment generates noise. External noise levels can range from 55 to 85 A-weighted decibels (dBA) or higher, comparable to a busy street. Communities near these projects have raised concerns about noise from cooling systems, backup diesel generators, heating, and ventilation. Noise levels exceeding 85 dBA are harmful to hearing, creating risk for surrounding communities and wildlife, while internal levels in data centers can reach 96 dBA, potentially harming staff (Tao and Gao 2025).
Other Considerations
Project proponents and supporters argue that data centers bring jobs and tax revenue, as well as meeting the growing needs of AI. While they do create construction jobs and a small number of permanent tech jobs, compared to their size and cost, they employ relatively few people. For instance, a $2 billion facility may only hire a few hundred workers once it’s fully operational (Indiana Economic Development Corporation n.d.). Counties may receive property tax payments from data centers, though a 2019 state law allows local governments to waive property taxes if they wish (Indiana General Assembly 2019). That same law exempts data centers from paying Indiana sales and use tax on data center equipment.
