Data Centers Drive Virginia, Ohio Utilities to Launch 150+ Grid Projects
Utilities in Virginia and Ohio have launched over 150 local transmission projects to cope with surging energy demands from data centers within the PJM network area. This move comes as tech companies' power needs drive up costs and raise concerns about grid reliability.
The PJM Interconnection, a regional transmission organization, oversees a complex process for new customers connecting to the grid. However, it has no veto power over these connections. Recent data center expansions have led to a significant increase in power demand, with tech companies' needs driving up PJM's July capacity auction by $7.2 billion, an 82 percent increase. This surge in demand has resulted in higher utility bills for customers, with estimates suggesting a potential $163 billion increase through 2033.
Northern Virginia's 'Data Center Alley', located within PJM's territory, is a major contributor to this trend. A report by Monitoring Analytics estimated that current and planned peak power additions from data centers could reach nearly 12,000 megawatts by next summer. To address these challenges, PJM is considering measures such as a 'bring-your-own-generation' requirement for data center developers and asking utilities to prevent 'double counting' of projects across grid regions.
The increasing power demand from data centers is reshaping the PJM grid and raising concerns about reliability and affordability. Utilities and PJM are working together to address these challenges, with transmission projects and potential policy changes aimed at managing the growing load from tech companies' data centers.
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