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Management Side
Week of 13 October 2025: The new Competitor for Power

Email Jim at jim.thompson@ipulpmedia.com

It wasn't that long ago you could list the big consumers of electrical power on one hand. They were refineries, other chemical plants, steel mills, mines and pulp and paper. Retail use in homes and shopping, were big in aggregate, but small granularly.

All of a sudden, we have a new giant-sized consumer--data centers. Sources tell me they range in size from 1 to 5 MW all the way up to 1.2 GW. It is also reported that up to 50% of a data centers' power draw may be for cooling.

As a very rough number, paper mills may require from 16 to 90 MW of electricity. This is at least a good order of magnitude comparison to data centers.

Do we, the paper industry, need to worry about data centers as competitors for electricity to our pulp and paper mills?

Possibly, for the data centers, at least the conceptual drawings that I have seen, are just large benign boxes. Wal-marts or Home Depots without the customers, if you will. For sure they have no smoke stacks or effluent ponds. They will likely have some cooling towers to expel all the heat.

The thing that data centers do not have are an abundance of good paying jobs. It takes just a few people to operate them and a few electricians and programmers to maintain them. There are few to no local services, such as piping contractors, electrical contractors, trucking companies and so forth needed. The programmers can be on the other side of the world.

When it comes to lack of trucking, local communities will likely see this as a positive, for it means less burden on the local roads as compared to a pulp and paper mill.

Data centers may be a target for saboteurs, and others who want to disrupt them. In the event of war, they will certainly be a target.

In summary, there are many pluses and minuses when it comes to comparing data centers and pulp and paper mills. The astute pulp and paper company will do the homework to mature their thinking on this comparison now, before a challenger comes knocking on their door.

Be safe and we will talk next week.

For a deeper dive, go here.

Study Guide: Data Centers and Pulp & Paper Mills as Power Competitors

This study guide reviews the key points from the provided text, which analyzes the emergence of data centers as major electrical power consumers and compares them to traditional industrial users, specifically pulp and paper mills.

Short Answer Quiz

Instructions: Answer the following questions in 2-3 sentences, using only information from the source text.

  1. According to the text, what were the traditional major consumers of electrical power before the rise of data centers?
  2. What is the range of electrical power consumption for a data center, and what single function can account for up to half of that power draw?
  3. How does the power requirement of a paper mill compare to that of a data center?
  4. Describe the physical appearance and notable external features (or lack thereof) of a data center as presented in the article.
  5. In what key ways do data centers differ from pulp and paper mills regarding employment and the use of local services?
  6. Why might a local community view the logistical impact of a data center more positively than that of a pulp and paper mill?
  7. What specific security risks and vulnerabilities are associated with data centers?
  8. Besides being large power consumers, what other "pluses and minuses" differentiate data centers from pulp and paper mills from a community perspective?
  9. While retail and home electricity use is large in aggregate, why is it considered different from industrial consumption?
  10. What is the author's ultimate advice to companies in the pulp and paper industry?

Answer Key

  1. The traditional big consumers of electrical power were refineries, other chemical plants, steel mills, mines, and pulp and paper mills. These large industrial facilities were the primary heavy users of electricity.
  2. Data centers can range in size from 1 to 5 MW up to 1.2 GW of power consumption. Cooling the facility can account for as much as 50% of this total power draw.
  3. A paper mill may require from 16 to 90 MW of electricity. This is presented as a good order of magnitude comparison to the power consumption of data centers, highlighting that both are significant consumers.
  4. Data centers are described as "large benign boxes," visually compared to a Walmart or Home Depot but without customers. They notably lack smokestacks and effluent ponds but are likely to have cooling towers to expel heat.
  5. Data centers do not create an abundance of jobs, requiring only a few people for operation and maintenance. They also have minimal need for local services like piping contractors, electrical contractors, and trucking companies, which a mill would typically require.
  6. A local community might view a data center more positively because it requires very little trucking. This lack of heavy vehicle traffic places less of a burden on local roads compared to a pulp and paper mill.
  7. Data centers are identified as potential targets for saboteurs and others who may want to disrupt them. The text also states that in the event of war, they would certainly be a target.
  8. The pluses for a community include a lack of smokestacks, effluent ponds, and heavy truck traffic. The minuses include the lack of abundant, good-paying jobs and minimal need for local service businesses.
  9. Retail and home electricity use is considered small "granularly." This means that while the total consumption is large when aggregated, each individual user consumes a small amount, unlike a single industrial plant which is a massive, concentrated consumer.
  10. The author advises that the "astute pulp and paper company" should do its homework now to mature its thinking on the comparison with data centers. This proactive analysis is recommended before a data center emerges as a direct challenger for local electricity.

Essay Questions

Instructions: The following questions are designed for longer, essay-style responses. Use the information and arguments presented in the source text to construct your answers.

  1. Analyze the primary arguments for why a local community might prefer a data center over a pulp and paper mill, and discuss the counterarguments related to economic impact based on the text.
  2. Compare and contrast the operational infrastructure of a data center and a pulp and paper mill, focusing on power consumption, physical footprint, and environmental outputs as described in the source.
  3. Using the provided power consumption figures, elaborate on why the author identifies data centers as a significant new "competitor for power" for the paper industry.
  4. Discuss the strategic vulnerabilities of data centers as outlined in the text and how these might influence a community's decision-making process when considering development proposals.
  5. Explain the author's concluding advice to the pulp and paper industry. Why is it important for these companies to be "astute" and "do the homework" on this emerging competitor?

Glossary of Key Terms

Term Definition from Source Context

Data Center A new, giant-sized consumer of electrical power, physically described as a "large benign box" that requires significant power (1 MW to 1.2 GW) for operations and cooling. It is noted for creating few jobs and having minimal need for local services or trucking.

Pulp and Paper Mill A traditional major consumer of industrial electricity, requiring between 16 to 90 MW. It is implicitly contrasted with data centers by its greater need for local services and features like smokestacks and effluent ponds.

Cooling Towers Structures used to expel heat from a facility. The source suggests data centers will likely have them due to the immense heat generated by their operations, with cooling potentially consuming up to 50% of their total power.

Effluent Ponds Ponds used for containing and treating industrial wastewater. The text explicitly states that data centers do not have these, unlike some traditional industrial plants such as mills.

Granularly A term used to describe the scale of individual power consumption. Retail and home electricity use is described as small "granularly," meaning each individual point of use is small, unlike a single large industrial consumer.

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