HomeGovernment mandates fast-track grid access for AI data centers
The Federal Energy Regulatory Commission (FERC) instructed grid operators on Thursday to expedite interconnection requests from data centers and other large electricity users.
Under the new directives, six major grid operators must demonstrate that data centers are “able to connect to the transmission system in a timely and orderly manner.” Data centers will bear the costs of interconnection. Commissioners approved the orders unanimously.
FERC also opened the door for grid tech startups by directing grid operators to consider “alternative transmission technologies.” The commission did not specify particular technologies, but the directive could include innovations such as solid-state transformers or superconducting transmission lines.
Grid operators now have 30 days to submit a report detailing how much generating capacity they have available, if any. They also have 60 days to “defend or revise” electricity rates within their regions. FERC also instructed grid operators to be more accommodating toward behind-the-meter power for data centers.
While FERC’s directives gave data centers a fast track to connect, they did not address the shortage of generating capacity.
Grid connections have been slow to materialize, partly because new power plants are also struggling to connect. By the end of 2023, interconnection requests for power plants exceeded the total capacity of the existing fleet, meaning the queue to get on the grid was longer than the grid itself could theoretically handle.
Against this backdrop, electricity demand from data centers is expected to nearly triple by 2035. Grid operators, accustomed to near-zero demand growth over the past two decades, have been strained under the load. Some, like PJM, the nation’s largest grid operator, have descended into something resembling chaos, with major utilities threatening to withdraw.
Tech companies and developers, unable to connect to the grid in a timely manner in many locations, have turned to on-site, or behind-the-meter, power (which is typically more expensive and complicated) out of desperation.
Still, enough projects have been able to connect that electricity prices have soared in many regions. Wholesale electricity rates are up as much as 267% compared with five years ago, according to Bloomberg.
FERC was prompted to address the issue by Secretary of Energy Chris Wright, who in October said delays in data center grid connections had threatened to undermine U.S. competitiveness in AI. Since then, public sentiment toward AI and data centers has soured considerably.
Meanwhile, the Trump administration on Wednesday said it would pay $765 million to wind developer Invenergy to cancel offshore wind leases near California, Maine, and New York. The company said it would use the money to build natural gas plants in the Midwest and geothermal projects in the West. One of Invenergy’s wind projects would have generated as much as 2.4 gigawatts of power — enough, at peak output, to supply roughly 1.8 million homes.
Altogether, the Trump administration has now spent about $2.6 billion to scuttle offshore wind developments.
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The Federal Energy Regulatory Commission (FERC) instructed grid operators on Thursday to expedite interconnection requests from data centers and other large electricity users.
Under the new directives, six major grid operators must demonstrate that data centers are “able to connect to the transmission system in a timely and orderly manner.” Data centers will bear the costs of interconnection. Commissioners approved the orders unanimously.
FERC also opened the door for grid tech startups by directing grid operators to consider “alternative transmission technologies.” The commission did not specify particular technologies, but the directive could include innovations such as solid-state transformers or superconducting transmission lines.
Grid operators now have 30 days to submit a report detailing how much generating capacity they have available, if any. They also have 60 days to “defend or revise” electricity rates within their regions. FERC also instructed grid operators to be more accommodating toward behind-the-meter power for data centers.
While FERC’s directives gave data centers a fast track to connect, they did not address the shortage of generating capacity.
Grid connections have been slow to materialize, partly because new power plants are also struggling to connect. By the end of 2023, interconnection requests for power plants exceeded the total capacity of the existing fleet, meaning the queue to get on the grid was longer than the grid itself could theoretically handle.
Against this backdrop, electricity demand from data centers is expected to nearly triple by 2035. Grid operators, accustomed to near-zero demand growth over the past two decades, have been strained under the load. Some, like PJM, the nation’s largest grid operator, have descended into something resembling chaos, with major utilities threatening to withdraw.
Tech companies and developers, unable to connect to the grid in a timely manner in many locations, have turned to on-site, or behind-the-meter, power (which is typically more expensive and complicated) out of desperation.
Still, enough projects have been able to connect that electricity prices have soared in many regions. Wholesale electricity rates are up as much as 267% compared with five years ago, according to Bloomberg.
FERC was prompted to address the issue by Secretary of Energy Chris Wright, who in October said delays in data center grid connections had threatened to undermine U.S. competitiveness in AI. Since then, public sentiment toward AI and data centers has soured considerably.
Meanwhile, the Trump administration on Wednesday said it would pay $765 million to wind developer Invenergy to cancel offshore wind leases near California, Maine, and New York. The company said it would use the money to build natural gas plants in the Midwest and geothermal projects in the West. One of Invenergy’s wind projects would have generated as much as 2.4 gigawatts of power — enough, at peak output, to supply roughly 1.8 million homes.
Altogether, the Trump administration has now spent about $2.6 billion to scuttle offshore wind developments.
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