Largest US Power Grid Plans Temporary Cuts for Data Centres During Shortages

Large data centers connected to the biggest electrical grid in the United States could face temporary power cuts beginning next year as grid operator PJM Interconnection attempts to manage rapidly rising electricity demand.

PJM said it plans to curtail electricity supplied to some data centers and other major users during periods when power is in short supply. Curtailment follows an auction aimed at securing additional generating capacity that failed to deliver enough new supply.

The measure comes as rapid data centre construction, driven in part by growing artificial intelligence workloads, increases pressure on electricity infrastructure. Data centres are projected to consume four times as much electricity by 2035 as they do today.

Cuts will target the largest data centers

PJM does not expect the curtailment program to begin until June 2027. centres. Curtailments will apply to centres with electricity demand of at least 50 megawatts, while the grid operator continues efforts to secure additional generating capacity through another auction.

The system resembles demand-response programs that utilities and grid operators have used for decades with large industrial customers. Participants whose electricity use is reduced during shortages will receive compensation.

Depending on expected grid conditions, customers in such programs can receive notice anywhere from about 30 minutes to several days before their electricity supply is curtailed.

Data centers may turn to on-site power

The policy could encourage new and existing centres to install additional on-site generation. Facilities without dedicated power sources may instead depend more heavily on backup generators during curtailment periods.

Data centres widely use diesel generators because fuel can be stored. Diesel generators can be more expensive and polluting than grid electricity. Federal rules allow certain generators to operate for up to 50 hours annually during demand-response events and as much as 100 hours for emergencies and maintenance.

The environmental impact of backup generation is already attracting scrutiny. Vantage Data Centres recently faced criticism over its interactions with Virginia regulators, according to a report that estimated diesel generators at a 96-megawatt Northern Virginia facility could contribute to significant annual health damages for nearby communities.

PJM faces pressure over rising electricity costs

PJM manages electricity markets covering roughly 67 million customers across a territory stretching from Virginia to Illinois. The operator has faced growing criticism over how it handles new power generation and rapidly expanding large electricity users, particularly data centers.

Wholesale electricity prices across PJM's territory have nearly doubled over the past year. The grid’s independent monitor has attributed much of that increase to growing demand from data centres.

With electricity consumption from the sector expected to continue, centres’ temporary ailments could become another tool for balancing the grid while additional generation and transmission infrastructure is developed.