A Growing Concern: Data Centers and Power Grids

A recent power line outage outside of Washington, DC, highlighted a pressing issue that is likely to become more frequent in the future. The incident, which occurred this week, demonstrated the significant impact that data centers can have on the power grid.

When a power line went down, data centers in the area immediately switched to backup power, causing a massive drop in load. According to data collected by Ting Labs, a startup that runs an IoT sensor network out of people’s electrical sockets, more than 3 gigawatts of data centers stopped drawing power nearly simultaneously. This led to a voltage spike across the PJM grid, causing lights to flicker across the region.

The incident was a stark reminder of the delicate balance between supply and demand on the power grid. The grid needs to operate in a state of near-perfect balance, with supply and demand closely matched. If they don’t, voltages can sag or spike, triggering failsafes within the grid or individual facilities, causing them to disconnect.

Experts believe that this problem will only become more frequent as data centers continue to grow in number and size. Northern Virginia, which is home to the highest concentration of data centers in the world, is a prime example of this trend. The region is part of the PJM Interconnection, which manages grids from New Jersey to Illinois and serves 67 million customers, making it the largest grid operator in the United States.

The event echoes one that happened two years ago, also on PJM’s grid, and it could foreshadow larger events if data centers aren’t built to more elegantly handle disruptions to power supplies. When the power line went down, it triggered data centers to switch to backup power, and about 3.1 gigawatts of load vanished in about 30 seconds, according to PJM data. The grid appeared to recover somewhat, but a short time later additional loads dropped off. At its peak, PJM’s grid had an extra 3.49 gigawatts of electricity on it. It took another 11 minutes before it stabilized.

According to Ali Zain Banatwala, senior market models specialist at the Independent Electricity System Operator, most data centers make decisions in a split second. When the voltage dip reached them, they all decided to disconnect within a few seconds of each other. A more orderly process would allow grid operators to develop more robust procedures in advance.

One startup, ON.Energy, has been working on a product to help data centers – and the grid – ride through events like the one that occurred this week. The company has developed an uninterruptible power supply for an entire data center campus, covering not just servers but also chillers and other equipment. The company essentially hides the data center behind a bank of batteries connected to sophisticated power conversion equipment.

ON.Energy’s system allows data centers to ramp computing workloads up and down, including AI training, without bothering the grid. Perhaps more important, it also means that data centers can absorb power fluctuations from the grid. Rather than disconnecting from the grid, ON.Energy’s system can use any extra power to charge its batteries, and if the flow dips, the system can dispatch power to servers. Plus, it can follow the grid’s lead within milliseconds, preventing sags or surges like the ones that caused this week’s problem for PJM.

Grid managers have also woken up to the problem. ERCOT, for example, is going to require large loads like data centers to “ride through” disruptions. The clock is ticking, though. The mass disconnection this week was twice as large as a similar event in 2024, when 60 data centers simultaneously disconnected, pulling 1.5 gigawatts of load from the grid. Back then, data centers accounted for about 6% of PJM’s load, according to Synapse Energy Economics. By 2040, they are expected to make up 24%.

It’s clear that the problem needs to be addressed soon. The mass disconnection this week was a stark reminder of the potential consequences of inaction. Data centers are here to stay, and it’s up to grid operators and data center operators to work together to find a solution.

What Can Be Done?

There are several potential solutions to this problem. One approach is to require data centers to have uninterruptible power supplies (UPS) that can handle power fluctuations. Another approach is to develop more advanced grid management systems that can anticipate and respond to power outages.

ON.Energy’s solution is a good example of how this can be done. By developing an uninterruptible power supply for an entire data center campus, the company has created a system that can absorb power fluctuations from the grid. This not only helps to prevent power outages but also allows data centers to ramp computing workloads up and down without bothering the grid.

It’s clear that the problem needs to be addressed soon. The mass disconnection this week was a stark reminder of the potential consequences of inaction. Data centers are here to stay, and it’s up to grid operators and data center operators to work together to find a solution.