Data centers may face power cuts on the largest US grid
Data centers may face temporary power cuts starting in June 2027 after PJM Interconnection, operator of the largest U.S. electrical grid, said it will curtail large users during shortages. The decision follows a shortfall in an auction for new generating capacity as rapid data center growth strains the grid.
Key Takeaways
- PJM will curtail data centers and other large users during power shortages, with cuts starting June 2027 for facilities of 50 megawatts or larger.
- An auction to add generating capacity fell short as breakneck data center construction leaves grid operators scrambling for power.
- Affected customers will be compensated, similar to long-running demand response programs that typically give 30 minutes to a few days of notice.
- By 2035, data centers are expected to use four times more electricity than today, and wholesale prices in PJM territory have nearly doubled over the last year.
- Many operators may add on-site power or diesel backup generators, which federal rules limit for demand response and emergency use.
According to TechCrunch reporting, the largest U.S. electrical grid has struggled to cope with an onslaught of data centers. PJM Interconnection serves about 67 million customers from Virginia to Illinois.
The operator is running another auction for new generating capacity. Still, the curtailment plan signals that demand growth is outpacing supply additions. For more coverage of energy and AI infrastructure, see our Future Tech & AI Wonders hub.
Why will data centers face temporary power cuts?
Grid stress is the core issue. After an auction to add more generating capacity fell short, PJM said it will cut off data centers and other large users during power shortages.
The timing matters for AI and cloud builders. Construction has raced ahead while operators scramble to generate enough power. PJM has also drawn criticism over how it manages new capacity and large new users.
Who will lose power, and when does it start?
Curtailment will not begin until June 2027. The cuts will only apply to data centers that are 50 megawatts or larger.
Like other demand response programs that have existed for decades and often include manufacturers, customers who lose power will be compensated. Notice windows typically range from 30 minutes to a few days, depending on forecasted demand.
What will operators do when the grid cuts supply?
The move will likely push many new data centers — and potentially existing ones — to set up their own on-site power. Those that do not will probably rely on backup generators, which tend to be costlier to run and frequently more polluting.
Many facilities favor diesel generators because fuel is widely available and can be stored on-site. Federal regulations allow such generators to be used for up to 50 hours per year for demand response events, and up to 100 hours per year for emergencies and maintenance.
This week, Vantage Data Centers came under fire for apparent coordination with Virginia environmental regulators to cast doubt on a report saying diesel backups could contribute to tens of millions of dollars in annual health damages near a 96-megawatt facility in Northern Virginia. Separately, PJM’s independent market monitor blamed data centers for much of a nearly doubling of wholesale electricity prices over the last year.