NERC warns of winter blackouts as data centers strain US power grid

The heightened demand for electricity to sustain data centers has increased the likelihood of blackouts in most of the US during extreme winter conditions.

This situation was noted after the North American Electric Reliability Corporation (NERC), an agency that monitors grid stability, released reports dated Tuesday, November 18, highlighting the escalation of power usage, which has significantly increased by 20 gigawatts compared to last winter. 

To further elaborate on the circumstances for better understanding, these reports explained that a gigawatt contains a capacity similar to that of a typical nuclear power plant. However, when comparing its supply, it was discovered that the supply has not surged as rapidly as its demand.

This finding has raised worries regarding severe winter storms, particularly in North America. According to analysts, if such a condition returns to the continent and brings a polar vortex, which has been encountered several times in recent years, it could result in energy shortages throughout America. That is, from the Northwest down to Texas and the Carolinas. Generally, these areas have sufficient resources under normal circumstances. 

The winter season in the US poses risks as demand for power supply escalates 

In an emailed message, Mark Olson, Manager of Reliability Assessments at NERC, acknowledged that data centers contribute significantly to the increased demand for electricity supply in areas where usage has surged greatly since last winter.

Sources, on the other hand, have highlighted that America’s power grid has been exposed to a heightened threat of blackouts for years due to its aging infrastructure, which faces stress from harsh storms and wildfires.

Currently, reports indicate that the AI-driven acceleration of data center development is exerting more pressure on the electricity supply after two decades of stagnation.

For the winter season, it is worth noting that the season can be extremely hazardous, as there are fewer hours of sunlight available for solar energy, which affects the performance of a battery.

Additionally, gas supplies could drastically drop due to pipeline issues or freezing conditions. The regions that NERC identified as facing increased vulnerability to power shortages have changed since last winter. For this winter, areas anticipated to be affected include the southeastern United States and parts of the western United States, such as Washington and Oregon.  

Texas remains a field of interest after encountering failures in February 2021 that caused millions to fall short of power supply for several days, resulting in more than 200 deaths. Another region of focus is New England, which is reportedly facing increased risks due to potential restrictions on natural gas pipelines. 

Plans for building big new data campuses set to add even more expenses in real energy costs

A recently released report suggested that the concept of data centers shutting down during peak demand times, without the need to develop new power plants, could cost utility customers billions.

This was after an analysis released Thursday November 13 by Monitoring Analytics LLC, which independently monitors the PJM Interconnection LLC market, estimated that intentions of building big new data campuses that are expected to reduce their energy use during grid emergencies, without producing additional power, could add an annual capacity cost of as much as $5.48 billion and even more in real energy costs.

In the report, Monitoring Analytics stated that, “The claim that large new data center loads can act as demand-side resources and don’t need new capacity is unrealistic.”

They also noted that, given that data centers typically require 99.99% reliability in their electricity supply, the option to interrupt these customers is not a practical solution.

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