NERC Issues Highest Alert on Rising Electricity Demand from Data Centers

The North American Electric Reliability Corporation recently issued its highest-level alert citing immediate risks from surging electricity demand by data centers. In one year its 10-year peak-demand forecast rose 69 percent. The Department of Energy warned that retiring reliable baseload plants and replacing them with weather-dependent solar and wind increases blackout risk a hundredfold by 2030.

8 billion, shortly after running entirely on renewables for a single weekday.

Artificial intelligence and the digital economy are driving rapid growth in electricity use, with data centers described as the new industrial giants. On the supply side, plants that operate continuously regardless of weather are being closed and replaced by solar and batteries that do not generate power when demand peaks.

Blackouts occur during heat waves, ice storms, and other periods of high need rather than during mild weather.

State legislators are urged to enact baseload-for-baseload laws that require retiring firm generation to be replaced with equal or greater dispatchable capacity. Legislatures are also advised to create streamlined permitting for large users to build their own behind-the-meter generation.

Under the proposed framework, facilities that generate their own power could sell excess electricity back to the grid and would pay the full cost of any grid backup connection.