Largest US Electrical Grid May Disconnect Data Centers

PJM Interconnection, the largest electrical grid operator in the US, announced it would temporarily cut power to large data centers and other major consumers during energy shortages. According to ixbt.com, this drastic step was taken because the infrastructure cannot handle excessive loads amidst the rapid development of AI and digital technologies. Techcrunch.com reports this.

Projections indicate that electricity consumption by data centers is expected to quadruple by 2035 compared to current levels. After a recent auction to add new generation capacity failed to yield expected results, grid operators are forced to take such measures to prevent complete system blackouts.

Grid Stabilization Measures and Compensation

PJM Interconnection plans to start disconnecting data centers from the power supply in June 2027. Restrictions will apply only to server centers with a capacity of 50 megawatt or higher. Similar to demand response programs that have been operating for decades, affected customers will be paid timely compensation.

The operator intends to send consumers advance warnings about grid load ranging from 30 minutes to several days in advance. However, such measures cannot fully resolve existing market problems. Over the past year, wholesale electricity prices have nearly doubled, and independent market analysts emphasize that data centers account for a major share of this growth.

Alternative Energy Sources and Environmental Concerns

This decision is expected to push many new and existing data centers to create their own independent energy sources in the future. Otherwise, companies will be forced to rely on backup generators. Often running on diesel fuel, such generators are not only expensive but also severely pollute the environment.

Federal regulations permit the use of such backup generators for demand response events up to 50 hours per year, and up to 100 hours per year including emergencies and maintenance. Recently, the issue of potential millions of dollars in health damages to residents living near a 96 megawatt data center in Northern Virginia sparked sharp protests from the public and environmentalists. The PJM region spans from Virginia to Illinois, serving 67 million customers.