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Data Centers are Big Business, but Developers Need to Evaluate Air Permitting Strategies for Backup Power
About a year ago, EPA Administrator Lee Zeldin announced EPA’s Powering the Great American Comeback Initiative. One of the Initiative’s pillars is to “Make the United States the Artificial Intelligence Capital of the World” by promoting the development of large data centers capable of handling AI’s massive computing demands. Since then, new and expanded data centers have been springing up across the country. The planning, siting, construction, and commencement of operation of a large-scale data center are likely to require multiple environmental permits, including those relating to site development, use of storage tanks, water consumption and cooling, and arguably most critical, permits authorizing the installation and operation of sources of air emissions.
With significant power demands, data centers are commonly located near or co-located with existing electric generating facilities. This allows the computing equipment to tap most if not all its power directly from the utility. But additional sources of power may also be needed at data centers, both to supplement available capacity from the grid and to ensure continuous power to computing equipment in the event of an interruption in the primary supply. Backup generators powered by reciprocating internal combustion engines (RICE) are the most common type of backup power generation equipment. These engines generate varying amounts of air emissions depending on age, engine specifications, and fuel type, among other characteristics. For this reason, RICE are subject to federal and state air quality regulations as well as preconstruction permitting requirements imposed at the state level. President Trump’s 2025 Executive Order “Declaring a National Energy Emergency,” describes an affordable and reliable energy supply and the integrity of our nation’s electrical grid as fundamental to the national and economic security, recognizes backup generators powered by RICE as a valuable tool in maintaining grid reliability.
Without onsite electricity generation, backup generators are the most significant air emission sources at data centers. In fact, large data centers may include hundreds of generators, each with a capacity of 2-3 megawatts or more. Diesel-fired RICE emit oxides of nitrogen, carbon monoxide, volatile organic compounds, particulate matter, sulfur dioxide, and formaldehyde, which is a hazardous air pollutant. The total potential emissions of these pollutants must be accounted for when applying for air permits. Likewise, the county in which the data center is proposed to be located is an important strategic consideration in determining the type of air permit required, because different counties have different emissions thresholds that determine the stringency of the applicable preconstruction air permitting program, e.g., nonattainment New Source Review and Prevention of Significant Deterioration.
As demand for data centers continues to increase, developers should carefully consider environmental permitting strategies, with a particular focus on air emissions. A thoughtful approach at the outset will help in securing the necessary approvals while at the same time girding projects against litigation that continues to proliferate. For more information, please contact Kate Vaccaro at 484-430-5700.
