As Cold Snap Threatens Blackouts, U.S. Lets Grids Push Data Centers To Backup Generators
As severe winter weather tests the resilience of power grids already strained by data center development, the two largest U.S. grid operators are poised to tap backup generators at data centers to avoid blackouts.
The Department of Energy issued emergency orders this week giving grid operators the green light to cut power for data centers and divert it toward households and other customers if skyrocketing demand threatens to overwhelm the grid.
The emergency orders come amid a cold snap that followed last weekend's winter storm, with 69 million people remaining under cold weather alerts in the U.S. as of Wednesday afternoon. The below-freezing temperatures are projected to last until next week in many areas, and another storm could hit the East Coast this weekend.
The orders temporarily authorized PJM Interconnection and the Electric Reliability Council of Texas — transmission systems that together provide power to more than 94 million people across the mid-Atlantic, Midwest and Texas — to direct data centers to run entirely on their own generators and stop consuming power from the grid.
Data center operators could run these generators for the duration required, without being limited by regulations concerning emissions, noise or any other normal constraints to their operation.
This represents an extraordinary measure intended as a last resort to avoid widespread grid failures.
“The employment of this backup generation is expected to reduce stress on the grid,” says the DOE order, which was signed by Energy Secretary Chris Wright on Monday. “This will permit orderly, safe, and secure operations during Winter Storm Fern.”
Data centers in the PJM and ERCOT regions weren't ultimately asked to activate their generators during or immediately following last weekend's storm. Energy demand remained below critical levels due to a combination of warmer-than-expected temperatures and closures of schools and government offices.
Still, PJM has the authority to curtail data center operations until the end of the week as a new blast of arctic temperatures approaches the Eastern Seaboard.
Periods of extreme winter weather present reliability challenges for grid operators. As severe cold increases, so does electricity demand for heating and appliances. Simultaneously, the energy supply becomes less reliable because winter conditions can damage generation and transmission infrastructure and disrupt the delivery of natural gas essential for power plants.
This potential supply-demand imbalance creates a risk of regional blackouts. This scenario unfolded in Texas in 2021 when Winter Storm Uri triggered blackouts across the ERCOT system that killed hundreds and caused billions of dollars of damage.
In an effort to avoid a similar crisis, ERCOT and PJM had requested authorization from the DOE ahead of this week’s storm to enact a suite of measures intended to ensure an adequate supply of power. In addition to the ability to tap data centers’ on-site generators, these measures included allowing power plant operators to defer maintenance and testing to keep plants online.
“This extreme level of demand coupled with stresses on fuel availability raise a significant risk of emergency conditions that could jeopardize electric reliability and public safety,” Michael Bryson, PJM senior vice president for operations, wrote in a petition addressed to Wright on Monday.
Winter Storm Fern has been something of a stress test for PJM and ERCOT amid a wave of artificial intelligence data center development that has sparked growing fears of an electricity reliability crisis in both systems.
PJM, whose 13-state footprint includes Northern Virginia and other major data center hubs, is already home to the country's highest concentration of data centers, and many more are on their way. PJM projects that the maximum demand on the system will climb by an average of 3.8% annually through 2035.
Across its service area, data centers are connecting to the grid faster than new power generation needed to supply them — a dynamic that has led to rising electricity prices and a growing risk of regional blackouts as grid reliability deteriorates.
PJM is in the final stages of a highly contentious process to establish new rules and policy tools governing data centers that aim to ensure reliability while still facilitating the data center sector’s rapid growth.
ERCOT has experienced similar challenges as hyperscale data center construction has exploded across Texas. Campuses with gigawatts of capacity are springing up throughout the state, with power consumption projected to roughly double by 2031.
With the memory of Winter Storm Uri fresh in mind, maintaining the reliability of the ERCOT grid amid surging data center demand has become a high-profile political issue in the Lone Star State.
Texas lawmakers signed landmark legislation in June that reformed regulations for new data centers connecting to ERCOT to preserve grid reliability. Included in this legislation were measures mandating that new data centers can be remotely disconnected from the grid by ERCOT during grid emergencies, bypassing the need for the grid operator to appeal to federal authorities.
Similarly, PJM’s pending data center plan is likely to include measures that encourage or require data centers to become “flexible loads,” reducing their energy consumption or disconnecting from the grid when the system is under strain. While there is consensus among PJM stakeholders that these measures need to be in place, there are stark divisions as to whether the grid operator should be approaching data center developers with a carrot or a stick to implement them.
Whether the performance of the PJM and ERCOT grids so far this week offers an accurate measure of their resilience remains to be seen. PJM may not be out of the woods yet, as the grid operator anticipates this weekend’s deep freeze could lead to record peak demand across its system.
