Fast-rising electricity demand spurred by AI data centers is upending the power system. But many utilities and grid planners are relying on an outdated “firm fixation” of fossil fuel-based generation failing to meet the moment– this risks higher costs and power shortages instead of a chance to remake the grid in a smarter, cleaner, more flexible way.
In reality, data center power requirements are far more complex than the flat, 24/7 block they are often assumed to be. For instance:
- Nuclear power isn’t always a great match for the kind of power data centers need
- One-to-one matching of data centers with dedicated or “captive” firm power plants is particularly unwise for both the power generator and the new data centers
- Relying on diesel backup risks multiple local environmental concerns.
Clean energy and innovative tactics like “energy parks” can satisfy data center electricity demand without resorting to a rush to build new gas or keep old coal online. Additionally, the interconnection process where data centers are connected to the grid is the maximum point of leverage for policymakers to ensure their power demand is met reliably, cleanly, and affordably.
What began as a major strain on the grid can become the catalyst for building a smarter one, supporting both the digital economy’s explosive growth and the clean energy transition.
