No place in the world boasts a more impressive collection of tech companies than Santa Clara County. The Northern California enclave — home to Apple, Google, Nvidia, Intel, AMD, Broadcom and many others — is an unequalled economic powerhouse. It’s also home for about 1.9 million residents.
Yet, beneath the glitzy façade of this Silicon Valley city lies a stark truth: Sprawling office complexes, huge manufacturing facilities, energy-intensive data centers (there are 72 of them in the county), and wired households draw huge amounts of electricity. Santa Clara County consumed 17,102 million kWh (GWh) of electricity in 2022, according to the California Energy Commission.
Balancing energy demand, resilience and sustainability is a formidable task. In addition to one of the world’s highest concentrations of data centers, 43% of vehicles sold in Santa Clara County are EVs, more than double the national rate. Silicon Valley Clean Energy (SVCE), a community choice aggregator that delivers clean electricity to 13 communities in the region, predicts that demand for electricity will rise 40% by 2050.
The goal? “Achieve economic and social resilience while keeping energy prices down,” states Jasneet Sharma, Director for Santa Clara County’s Office of Sustainability and Resilience. “The county’s compass? We must adapt to a changing climate, continue to reduce pollution and enhance our natural resources — all while promoting a prosperous and just economy,” she says.
Success hinges on the county’s ability to transition to a clean energy economy. This, in turn, will require ongoing change, including dialing up renewables, modernizing the grid, and adopting to new programs and technologies, including virtual power plants (VPPs) and battery storage systems. “We are working closely with our member cities to understand how AI and data center demand impact our load. We are continuing to procure clean power to meet the forecasted demand,” says Monica Padilla, CEO of SVCE.
Power on High
As an economic powerhouse, few places rival Santa Clara County. Its 2022 gross domestic product (GDP) was $400.1 billion. The broader metropolitan area ranks second in the US in per capita GDP. At the same time, population growth, new housing, business expansion, and the need for a robust EV charging infrastructure are straining the existing energy infrastructure.
As of 2023, renewable energy sources such as solar and wind account for 54% of California’s in-state electrical generation. Utilities scattered across the Silicon Valley already obtain a significant portion of their energy through renewables. For example, Silicon Valley Power (SVP), which serves the City of Santa Clara, aims to reach 50% renewable energy by 2026 and 60% by 2030. It strives to be greenhouse gas-free (GHG) by 2045.
“We have experienced sustained growth over the last two decades,” says Manuel Pineda, chief electric utility officer for SVP. The county projects demand to double over the next decade. “Industry is driving much of this growth, particularly data centers located within the city.” Yet he notes that large residential projects have also fueled a rise in energy use. About 92% of the city’s power goes to industrial users, while 6% flows to residential customers.
SVCE is driving the transition to clean energy. The agency, a joint powers authority (JPA), eliminates the need for each utility to negotiate clean energy purchases. Already, the entity has signed more than 20 long-term purchase agreements for large-scale renewable projects that range from 20 MW to 100 MW of power. By 2030, these projects will account for nearly 80% of SVCE’s total annual load, Padilla says.
Yet, the path to progress could be bumpy. A key question is how to keep up with the ravenous electricity demands of data centers. The fact that the Silicon Valley is situated on a peninsula complicates things, says Lincoln Bleveans, executive director for sustainability, utilities, and infrastructure at Stanford University. “There are only a couple of major transmission lines coming into the region. So, from a reliability and resilience standpoint there are some additional risks.”
Risk in this case takes the form of an earthquake, fire, or other disaster. If one high transmission line goes down, widespread power shortages could ensue. Whether the lines can support the required inflow of renewable energy from other parts of the state is also an open question, particularly as energy demand increases. At present, there are no major solar or wind farms in the peninsula, and rooftop solar systems produce only a small percentage of the energy required, Bleveans says.
Seeing the Light
A clean energy future will require a blend of innovation, creativity, and policy. Presently, SVCE and Pacific Gas & Electric (PG&E) are studying ways to electrify and modernize a grid infrastructure originally built to accommodate gas-fired power. We are working with member cities to understand how AI and data center demand may impact our load.” Padilla says.
At the same time, the Santa Clara Office of Sustainability is collaborating with the state Green Business Network to help small and medium-sized businesses (SMBs) connect to resources and obtain technical assistance for building out EV charging systems and other electrification projects. “Clean energy is something that we must address on numerous fronts,” Sharma says.
Indeed. Officials are also exploring microgrids, virtual power plants, and emerging technologies, including small modular reactors (SMRs) that generate zero carbon. Although California hasn’t been receptive to any form of nuclear power in recent years—the state has had a near total nuclear energy moratorium in place since 1976, “SMRs could prove to be an effective solution. It’s wise to consider all the options,” Bleveans says.
Battery storage could play a crucial role in helping Santa Clara County and other Silicon Valley communities meet their clean energy goals. Because renewable energy generation is inherently unpredictable, balancing supply and demand remains a challenge. SVCE has already invested in 1,845 MWh of battery storage and hopes to expand the use of the technology in the coming years.
Grid-scale and distributed battery systems can help by storing excess power and releasing it when needed — whether the cause is a routine shortfall or the result of earthquakes, wildfires, and heat waves. Statewide, California aims to increase battery capacity from 6,600 MW in 2023 to 52,000 MW in 2045.
Getting to a carbon-free future won’t be easy — particularly with emerging roadblocks that may occur at the federal level. Yet Santa Clara County officials and others in the region feel as though they are up to the task. “We need to build renewable projects at an unprecedented rate,” SVCE’s Padilla says. “Our communities and the state recognize the benefits of getting power from clean, renewable sources.”