The biggest U.S. power grid is under strain from AI - and no one is happy | TechCrunch

"PJM released a white paper this week that said the region "has years, not decades" to make fundamental changes to the way it operates. "The current situation is not tenable," PJM CEO David Mills wrote in a foreward to the report. Normally, this sort of wonky report would land on the desks of a few legislators and regulators. But PJM's territory includes a large number of data centers, including the compute-dense region of Northern Virginia. What happens to PJM will send ripples throughout the tech world."

""The current state of PJM's performance and stakeholder approval process does not give me great confidence that these issues will be resolved anytime soon," Bill Fehrman, AEP's CEO, said in an earnings call Tuesday. "In fact, if something is not done now, I expect we could still be having these same conversations in 10 years. The PJM market worked very well when supply exceeded demand, we are now in a very different time.""

"Cloud computing and AI have begun to strain PJM's existing generating capacity. Against the backdrop of surging demand, PJM paused applications in 2022 for new generating sources to connect to its grid, citing a years-long backlog. Just as the need for electricity was beginning to grow for the first time in decades, the grid operator prevented new sources from even applying to get hooked up."

PJM historically matched electricity supply with demand and supported low U.S. electricity prices. Growing pressure from politicians, businesses, households, and power companies has led to calls for major operational changes, with PJM agreeing that the current situation cannot continue. PJM released a white paper stating the region has years, not decades, to make fundamental changes, warning that the current situation is not tenable. The report matters beyond regulators because PJM’s footprint includes data centers, especially in Northern Virginia. Some stakeholders doubt PJM can deliver reforms quickly, and American Electric Power is considering leaving. PJM’s capacity strain has been intensified by cloud computing and AI, leading PJM to pause applications in 2022 for new generating sources due to a years-long backlog.

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