Biggest US Power Grid Operator Moving Forward With Plan to Manage Data Centers

(Reuters) – Operators of the U.S. electric grid covering the world’s largest data center market on Wednesday said they planned to move forward with a plan to manage the connection of the giant server warehouses that are propelling the country’s power use to record highs and raising the risk of supply shortfalls.

PJM Interconnection, the biggest grid operator in North America, spanning 13 states and Washington, D.C., has been struggling to keep up with booming demand from the proliferation of Big Tech’s power-hungry data centers needed for the rapid expansion of artificial intelligence.

PJM members, which include power generators, utilities and large energy users, cast votes on Wednesday that rejected about a dozen proposals aimed at quickly linking up data centers to the PJM grid while attempting to reduce the reliability risks of doing so. Following the results, representatives of the PJM Board of Managers said they still intended to advance a plan to handle its surging data center interconnection requests and aimed to finalize it by December.

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Earlier proposals for the so-called “Critical Issue Fast Path” required data center developers to bring their own power supplies and shut off operations during energy emergencies, including when electricity use surges on very hot and cold days. Those provisions were removed from later versions of the plan, and it was unclear what a final roadmap for PJM’s handling of data centers would be.

Data centers are expected to account for nearly all of the 32 gigwatts of demand growth PJM forecasts on its system through 2030. Without significantly increasing power supplies, PJM has warned of power shortages in the region as early as 2027.

PJM covers Northern Virginia, which has the biggest global concentration of data centers. Other burgeoning hubs are developing in states, including Ohio, Indiana and Pennsylvania, elsewhere in the Mid-Atlantic grid.

The power crunch has sent prices in PJM’s annual capacity auction rising by more than 1,000% over the last two auctions.

The region’s power bills started rising last summer. High prices in the auction are meant to encourage the build out of additional power plants and bring equilibrium to the market, but costs and supply chain problems have contributed to lengthy delays with building new power plants.