Data Centers to Face Temporary Power Interruptions to Prevent Blackouts on Major US Grid

The largest electrical grid in the U.S. is encountering difficulties due to a rise in data centers. After an unsuccessful auction aimed at increasing generating capacity, PJM Interconnection, the operator of the grid, declared plans to disconnect data centers and other significant users during power shortages.

This move comes as the swift growth in data center development has led grid operators to struggle with rising demand. By 2035, electricity consumption by data centers is expected to increase fourfold compared to current levels.

PJM intends to enforce these supply reductions by June 2027, focusing specifically on data centers with capacities of 50 megawatts or more. Additionally, the grid operator is organizing another auction to acquire more generating capacity.

Similar to established demand response programs, which mainly involve large consumers like manufacturing companies, affected customers will be compensated for their power being cut. These programs generally offer advance notice ranging from 30 minutes to several days based on projected demand.

This situation might prompt many new and existing data centers to develop their own on-site power generation systems. Those opting against this will likely rely on backup generators, which are often more costly and can have greater environmental impacts.

Numerous data centers favor diesel generators due to their ready availability and ability to be stored on-site. Federal regulations allow these generators to operate for up to 50 hours a year for demand response events and up to 100 hours for emergencies and maintenance.

Recently, Vantage Data Centers faced backlash for reportedly working with Virginia environmental regulators to diminish a report suggesting that diesel backup generators could result in tens of millions of dollars in annual health damages for residents near a 96-megawatt data center in Northern Virginia.

In recent months, PJM has endured criticism over its management of new generating capacity and large users like data centers. The grid operator’s service area spans from Virginia to Illinois, serving 67 million customers. Over the past year, wholesale electricity prices have nearly doubled, with PJM’s independent market monitor attributing a significant portion of this rise to data centers.