Data centers' 'flexible' power usage could save the grid billions. Can they scale?
XLU•Data centers could save $40 billion to $150 billion in capital investments over the next decade by shifting or reducing electricity use during grid stress, a Duke University study estimated. U.S. data center electricity use could reach 383 to 793 terawatt-hours by 2030, up from about 177 to 192 TWh in 2024.
1. Potential grid savings
Technology companies and utilities are exploring demand response, in which data centers temporarily reduce or shift electricity use during peak demand or grid stress. EPRI estimates U.S. data center electricity use could rise from about 177 to 192 terawatt-hours in 2024 to between 383 and 793 TWh by 2030. Data centers surveyed by EPRI reported peak power reduction potential of 10% to 30%, depending on facility type, with some hyperscalers potentially able to reduce more.
2. Projects and agreements
Demand response for data centers has mostly been used in pilot projects or one-off agreements. OpenAI recently agreed to cut electricity drawn from the grid by up to 1 gigawatt from a planned 3.2-gigawatt facility in Georgia during periods of grid stress. In June, federal regulators ordered grid operators to consider new rules for connecting large power users, including faster pathways for facilities offering flexibility. Google, NVIDIA and Emerald AI launched the AI Energy Management Alliance last month to advance flexible data centers.
3. Scaling challenges
Data centers need to adjust power consumption without disrupting customers, while utilities and grid operators need tariffs, market incentives and faster interconnection pathways that reward flexibility. Alexander Kheder of BMI said scaling curtailment agreements across hundreds of new facilities would require significant capital expenditure and coordinated policy frameworks.
