030: Shrinking the Footprint: The Future of Co-op Data Centers (with James Tanneberger)

In this episode of The Co-op Heroes Podcast, Pablo Fuentes sits down with James Tanneberger, CEO of South Central Indiana REMC, to talk about a subject that gets more contentious by the month: electric cooperatives and data centers. Tanneberg makes the case that the mega load data centers people love to hate are already being replaced by something smaller, quieter, and a lot more useful to the communities hosting them. Most people picture a data center the same way: 300 to 500 acres, seven buildings at a billion dollars apiece, millions of gallons of water running through and back out into a river. That picture is a year or two out of date. Tanneberger has spent the last year studying what comes next, and what he has found is that the technology is shrinking fast. Closed cycle cooling instead of continuous water flow. Denser GPUs in smaller footprints. Modular units that fit in shipping containers and could sit inside the fence of a substation. The conversation goes past the buildings themselves and into what a data center can actually do for a co-op. Tanneberger's system is 98 percent residential, which means the co-op buys power at the two most expensive times of day, morning and evening, when everyone is home. A data center runs flat, all day, every day. Pair the two load curves and the co-op ends up buying more power when it's cheap, which brings costs down instead of up. Some of these smaller sites can even be set up as load modifying resources, meaning the co-op can shift a data center over to backup generation during a grid emergency and sell that flexibility back to the system operator. Revenue that didn't exist before, going straight into things like underground line conversions. Featured topics: - Why the mega load data centers of the last decade won't be the norm going forward, and what's replacing them - How pairing data center load with residential load curves can actually lower the cost of power for members - What a load modifying resource is, and how a data center paired with a backup generator can support grid reliability during peak demand - The idea of distributed AI, and how existing co-op fiber infrastructure could network small modular sites together instead of building one massive campus - The "a la carte" or colo data center model, and why it may end up being the more common version in rural America - Why national security arguments around AI are shaping local permitting decisions whether communities like it or not Tanneberger isn't arguing that data centers are good or bad. He's arguing that the version most people are picturing is already becoming outdated, and that co-ops who understand the shift early have a real chance to turn an unpopular trend into a benefit for their members. This is a conversation about reading where an industry is headed before the rest of the room catches up.