PJM unveils plan to tackle AI-driven power demand surge

By Laila Kearney and Anushree Mukherjee

Jan 16 (Reuters) - Grid operator PJM Interconnection on Friday unveiled a plan to manage surging power demand from data centers that Big Tech needs for its artificial intelligence expansion, hours after the White House urged emergency action to prevent potential blackouts.

PJM Interconnection said it plans to require new large power users to either bring their own power generation or enter into a connect and manage framework subject to early curtailment.

Earlier in the day, the White House urged the largest U.S. electric grid to conduct an emergency power auction to protect against rolling blackouts as energy demand from data centers grows faster than the country can build new generation plants.

PJM controls the power flow across 13 states largely in the Mid-Atlantic, which includes the world's largest concentration of data centers in Virginia, with other states also becoming burgeoning hubs for server warehouses.

Data centers are making up the vast majority of the tens of gigawatts of demand waiting to connect to PJM, forcing the grid operator to design a framework to specifically handle the giant energy-consuming projects.

PJM’s board said its plan would focus on bringing new power generation online quickly and would be coupled with options for new load customers whose electricity demand can be curtailed if needed.

PJM's measures include improving load forecasting and expanding the role for states, fast-tracking interconnections for state-sponsored generation projects, launching a backstop procurement process to address near-term reliability needs and reviewing PJM’s markets to better support investment.

The PJM board said the plan includes proposals to be filed directly with the Federal Energy Regulatory Commission, changes to PJM’s policies and procedures that can be implemented immediately, and proposed stakeholder processes to inform the board about complex but equally urgent issues.

"This is not a yes/no to data centers. This is ‘How can we do this while keeping the lights on and recognizing the impact on consumers at the same time?’" said CEO David Mills, PJM Board chair and interim president.