Powering the data boom: answering nine key questions about powering AI data centres

The rapid expansion of AI is driving demand for electricity in northern Virginia, Texas and other parts of the US, as hyperscalers race to secure power. As a result, the biggest constraint facing AI infrastructure is no longer demand for computing power - it’s access to reliable electricity.

Transmission limitations and lagging interconnection processes are progressing far more slowly than development timelines for data centres that now sometimes exceed 1 GW.  

As a result, some developers are considering approaches that would have been viewed as unconventional only a few years ago. Interruptible grid connections are being evaluated and behind-the-meter (BTM) generation and energy storage solutions under development to bring data centres online years before grids could deliver. Yet these approaches also pose significant technical, commercial and regulatory risks that are often underestimated. 

Below, we answer some of the most common questions asked by clients:

Q1. How are data centre developers coping with grid challenges?  

Developers have adopted three broad solutions: 

• Delay data centre start-up until the grid catches up. 
• Accept unreliable grid connection to allow early start-up but with operation affected. 
• Build on-site generation as a bridge solution until permanent grid connections become available. 

Developers still generally prefer reliable grid connection but the bridge period is creating unprecedented demand for alternative options, which have rapidly moved from niche concepts to mainstream solutions. Yet the technical and regulatory implications of interruptible grid connections and BTM solutions remain poorly understood.  

Regulations surrounding these new models are still being developed by regional transmission organisations (RTOs), utilities and regulators. As a result, developers are making billion dollar investment decisions while some of the operating rules that will ultimately govern their projects are still evolving. 

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