A survey of nearly 700 U.S. power industry stakeholders found that forty-five percent of respondents say they have no confidence or are not very confident in their forecasting for data center loads, “perhaps due to the large amount of uncertainty that can come with data center power requests and expectations,” reported Black & Veatch in its 2024 Electric Report.
“Industry professionals say the load requests often are wide-ranging and have an uncertain timeline — other than fast,” the report noted.
Such lack of certainty was evident when respondents were asked what information from data centers made planning challenging, the report said.
“Nearly one-third (30 percent) pointed to accurate load ramps, while another 18 percent said accurate substation interconnect dates would be helpful.”
The numbers detailed in the report “paint a picture of contrasting accuracy, with one group of respondents asking for full load capacity on day one with peak demand only being a fraction of that, while increasing demand comes years later and creates grid operation challenges as well as forecasting challenges.”
When asked what data centers can do to improve the speed of their project getting completed, 40 percent “unsurprisingly pointed to load clarity.”
An additional three in 10 cited some form of advance payment, which would help solidify proposals and somewhat pacify the budget question in that its already paid for.
Nearly one in five (19 percent) mentioned that client-furnished equipment is helpful – a method data centers are using to advance their projects.
Specifically, many are building their own substations or contracting them to an engineering, procurement and construction provider, a strategy that can cut the project construction timeline by one-half or even more.
“But this tactic isn’t a given, as some utilities do not allow clients to build their own substations — or if they do, they don’t allow the data center to operate that energy asset. On that topic, one-fifth — 21 percent — of respondents said they do not allow clients to build substations, citing their desire for component standardization and their concerns about client capabilities. Eleven percent permit the construction of substations but not the operation, while 27 percent said they allow both the building and operation of the substation by the client. Working with an EPC familiar with their standards could expedite development.”
In looking at the biggest challenges utilities face in getting data centers operational, nearly four in 10 (39 percent) cited available power while 30 percent pointed to necessary substation upgrades. Interestingly, almost one in four (24 percent) stated equipment availability was a major concern.
In many cases, the wait times for circuit breakers, switchgears, transformers and gas turbines could be three years or more, something entities building substations or their own power generation must consider.
“Data centers have proliferated on the commercial power landscape, and their load requests — from several hundred megawatts to 1 or 2 gigawatts — are exponentially larger than anything previously seen, compounding challenges in the U.S. power industry,” the report said.
“Utilities already were facing a demand boom from myriad elements before traditional data centers began surging across the United States in recent years. New artificial intelligence (AI) data centers and their power demand five to 10 times greater than traditional data centers are compounding the data center power demand boom,” the report said.
The Inflation Reduction Act “has helped stoke manufacturing demand, and electrification is accelerating across the country. Population shifts also are causing a significant rise in demand. Continued shutdowns of coal-fired power plants in certain U.S. areas is lessening capacity. Add in the massive load requests from the data center sector, and utilities have their hands full trying to meet the demand and accurately forecast future load.”
The survey also asked respondents to discuss the following topics:
- Grid modernization
- Energy Transition
- Climate change and resilience
- Cyber security and resilience
- Rates and regulations
