The Trump administration is looking to speed up the process of data centers connecting to energy grids, clearly a major speed bump in the explosion of artificial intelligence infrastructure.
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U.S. Energy Secretary Chris Wright sent a letter late Thursday to the Federal Energy Regulatory Commission proposing a measure that would help electricity grids balance real-time demand. The measure could benefit the fastest-growing real estate class, highlighted explicitly by Wright in his letter: data centers.
“To usher in a new era of American prosperity, we must ensure all Americans and domestic industries have access to affordable, reliable, and secure electricity,” he wrote. “To do this, large loads, including AI data centers, served by public utilities must be able to connect to the transmission system in a timely, orderly, and non-discriminatory manner.”
Among its 13 proposals, Wright’s directive calls for an expedited review process connecting data centers to the grid, slimming the review time down to 60 days.
The current review period can stretch out over several years, Bloomberg reports. A speedier process would help the U.S. compete with its main AI development rival, China, as both seek dominance in the field.
Data centers would have to agree to decrease their consumption in response to grid strain or include new power plants in their plans to get quicker review times. Some data center users like Google have begun over the last year to strike agreements to reduce energy use during times of grid strain, a concept called demand response that has gained traction as a solution to the industry’s power problems.
Energy-hungry data centers have sent electricity demand soaring, creating a knock-on effect for power prices and for regular consumers. Wright's proposed process would work via interconnection, which involves knitting together a network of local electricity grids to sell surplus power to one another, balancing each other’s needs during periods of excess demand or supply and bringing down costs.
America’s largest grid operator, PJM Interconnection, predicted in August that energy prices during peak demand hours could increase by more than 1,000% due to data center demand, pushing bills up by 60% for homeowners and businesses served by the grid.
But Wright’s proposal may not end up with the U.S. building data centers faster, because the current pace of development is being attributed to a shortage of specialized chips and electrical equipment rather than grid connections.
“This is still a marathon, not a sprint, just because of the engineering and physical requirements,” Raymond James investment strategy analyst Pavel Molchanov told Bloomberg.
One group that could benefit immediately is crypto miners, CryptoRank reported. The rule could also be a boon for power producers, which could benefit from increased reliability and efficiency, according to Bloomberg.
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