Data Center Growth
Data centers are the engine of the digital economy, but their growing demand for power is pushing utilities to rethink how they approach grid modernization. In January, AEIC’s Center for Operational Excellence convened a forum with twenty-three utilities to explore the current gaps in streamlining data center interconnections.
This workshop served as an initial step toward a broader industry conversation on how best to address these evolving needs. The rapid expansion of data center facilities highlights a few fundamental challenges. Currently, the speed of data center infrastructure development is far outpacing the long-term planning cycles of the utility industry.
In addition, state mandates are evolving as the need grows for baseline, dispatchable generation required to support these larger interconnection requests. This creates pressure to balance resource adequacy with the surge in high-load customers.
To maintain a resilient, adaptable, and cost-effective grid, collaboration among utilities, developers, and policymakers is becoming increasingly important. Aligning planning horizons, establishing fair cost-sharing mechanisms, embracing dynamic flexible distribution grids, and standardizing interconnection processes can help ensure that growth does not come at the expense of system stability.