Grid Operator to Curtail Data Center Power as Demand Surges
AI-generated image · Bay Street Wire
PJM Interconnection will implement power cuts for large data centers starting in 2027 to prevent blackouts across the largest U.S. electrical grid.
PJM Interconnection, the operator of the largest electrical grid in the U.S., has announced it will cut off power to data centers and other large users during shortages to prevent blackouts, according to TechCrunch. The decision follows a failed auction to increase generating capacity amid a rapid increase in data center construction.
Starting in June 2027, the curtailments will specifically target data centers with capacities of 50 megawatts or larger. PJM, which serves 67 million customers from Illinois to Virginia, is currently conducting another auction for new generating capacity. Under this demand response program, affected customers will receive compensation and advance notice ranging from 30 minutes to several days.
The move highlights a growing deployment bottleneck: data center electricity usage is projected to quadruple by 2035. TechCrunch reports that PJM's independent market monitor has attributed much of the nearly twofold increase in wholesale electricity prices over the last year to data centers.
To avoid outages, operators may pivot toward on-site power sources. Those that do not may rely on diesel backup generators, which are often more polluting and expensive. Federal rules permit these generators to run for up to 50 hours annually for demand response and up to 100 hours including emergencies. This reliance on diesel has already sparked controversy; TechCrunch notes that Vantage Data Centers was recently criticized for coordinating with Virginia environmental regulators to challenge a report claiming diesel generators at a 96 megawatt Northern Virginia facility could cause tens of millions of dollars in annual health damages.