The recent approval of Switch’s LAS 19 data center in southwest Las Vegas highlights the power grid’s vulnerability in Nevada and underscores the need to support both residential and industrial growth. This modest-sized data center will require a continuous power supply comparable to that of a large master-planned community like Inspirada in Henderson or to the power needs of one-third of all homes in Boulder City.

Although Switch’s closed-loop air-cooling system eliminates water use, it increases energy consumption. The company claims to fully offset this energy use by purchasing 100% renewable energy, but this doesn’t exempt residential users from higher bills, as additional infrastructure expansions raise electricity costs. 

Why Nevada Is a Data Center Hub

Nevada’s data center industry is centered on two primary hubs, supported by attractive tax benefits, minimal natural disaster risk, and critical fiber routes connecting the state nationwide. The market is anchored by Switch’s Las Vegas Core Campus and Reno Citadel Campus, as well as major hyperscale infrastructure from Google in Henderson and Story County and from Apple in Washoe County region.

Data Centers Use Less Water Than You Think

Critics often highlight water and power consumption as major data center concerns. Water use spans many industries, including agriculture. Instead of focusing solely on the millions of gallons that data centers consume annually, consider almond farming.

Almond cultivation in the US consumes about 80 times more water than all data centers combined. In terms of revenue, almonds earn less than half a penny per gallon of water used, whereas data centers generate over $1,000 per gallon. Consequently, the water impact is minimal, especially since data centers can adopt closed-loop cooling to significantly cut water use, unlike evaporative cooling.

The Real Challenge: Nevada’s Power Demand Is Set to Explode

Power consumption is a different story. Nevada’s more than 70 data centers currently draw 800 MW of electricity, accounting for 5% of the state’s retail electricity sales. State regulators have approved 12 major planned data center campuses, which would add 5,900 MW of demand to the grid—roughly seven times the power used by the state’s existing data centers. Future buildout requests total up to 22,000 MW, about three times Nevada’s peak power demand. 

How Data Centers Get Priority Power Access

There is genuine concern about how data centers, vital industrial drivers in the 21st century, could affect electricity costs and supply. Typically, data centers secure priority access to power through negotiations with utility providers, enabling them to obtain electricity during grid shortages when public consumption is reduced. Meanwhile, utilities aim to support rapid growth and rising power demand while managing the limitations that come with clean and renewable energy mandates.

Hoover Dam Can’t Carry the Load Alone

One of Southern Nevada’s clean energy sources that can provide stable baseload power is Hoover Dam, and the state benefits greatly from its ability to stabilize grid fluctuations and even outperform gas-fired plants. While Nevada receives roughly 25% of Hoover Dam’s electricity, that’s enough to keep outages minimal and provide stable power for decades. However, Hoover Dam supplies only up to 5% of the state’s total electricity and lacks additional capacity to meet the data center’s increased power demands.

Over ten years ago, Nevada aggressively positioned itself as a primary West Coast alternative to Silicon Valley for data center deployment. This strategy rests on statutory tax incentives enacted by the Nevada Legislature in 2015 and administered by the Governor’s Office of Economic Development (GOED). 

How Enron Built Las Vegas Into a Fiber Optic Superhighway

The region’s status as a data juggernaut is no accident. The foundation was laid in the early 2000s by the now-infamous energy company Enron. At the time, Enron Broadband Services (EBS) lured more than 40 major telecommunications carriers to run their ultra-thick fiber-optic trunk lines across the US, converging at the heavily fortified Enron building on East Sahara Avenue.

This made Las Vegas a Tier 1 node, not just a national access point (NAP) but a SuperNAP, with minimal latency and massive data throughput. Las Vegas sits directly along the primary transcontinental fiber routes connecting Southern California to the rest of the US. With this advantage, the city competes for data centers as effectively as it competes for tourism.  

The Billion Dollar Opportunity Nevada Can’t Afford to Miss

Unsurprisingly, Nevada now has a golden opportunity for substantial economic growth. The potential magnitude becomes clear when looking at the economic impact of data centers in Loudoun County, Virginia, which amounts to billions of dollars annually. How can we address the constraints posed by the massive demand for additional power while capturing the economic benefits the data center industry can bring to the region and to Nevada?  

Small Modular Reactors: A Ready Made Solution for Data Centers

Small modular nuclear reactors (SMRs) with power capacities of 20-300 MW could be an ideal solution for powering data centers independently rather than connecting to the electric grid, leaving residential electricity prices unaffected and enabling closed-loop cooling systems without water waste. T

his is not an earth-shattering new idea; it is already practiced elsewhere. Oracle is pursuing this by building a massive data center campus with three small modular reactors; Google is working with Kairos Power to build a small fleet of SMRs for its data center network; and Microsoft has closed a deal with Constellation Energy to power its Crane Clean Energy Center in Pennsylvania.  

Nevada can benefit from similar arrangements by embracing nuclear energy. Data centers are here to stay and will continue to grow into ever-larger facilities. The economics depend on the applications these facilities support. SpaceX, which owns Grok (xAI), projects that its AI data centers will generate $500 billion in annual revenue within a few years. The wealth the industry will create is staggering, and this is just the beginning of a quickly emerging market.

Nevada Must Act Now on Nuclear Energy Policy

Nevada can benefit from similar arrangements by embracing nuclear energy. Data centers are here to stay and will continue to grow into ever-larger facilities. The economics depend on the applications these facilities support. SpaceX, which owns Grok (xAI), projects that its AI data centers will generate $500 billion in annual revenue within a few years. The wealth the industry will create is staggering, and this is just the beginning of a quickly emerging market. 

Nevada’s approach to power, with solar, wind, geothermal, and more natural gas, will not be sufficient for these new industries. The Nevada Legislature needs to lay the groundwork now, with the understanding that the information age requires massive amounts of energy, achievable only through nuclear power. Delaying the innovation of the state’s regulatory framework and energy market risks spiking electricity prices close to California levels. Given Nevada’s existing internet connectivity and available space, it would be foolish for the state to not participate in this economic boom and compete in a trillion-dollar market. 

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