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Data centers play a mission-critical role in today’s economy. These facilities are essential to ensuring the seamless and secure operation of the digital services that almost every industry relies on daily. Their operational continuity is not just a convenience. It is an absolute must to maintain critical technology.

As a result, energy is a non-negotiable part of business operations. Servers must be up at all times, and energy (a lot of it!) is required to run sophisticated cooling and ventilation systems to prevent overheating. A disruption in energy load can affect everything from streaming services to data storage to financial transactions.

In addition to their heavy energy usage already straining the grid, demand for data centers is growing at an unprecedented rate, driven by the insatiable appetite for traditional cloud computing and storage in combination with the increased adoption of AI. These are exciting times to witness. AI, in particular, has the potential to be a transformative technology, but its energy requirements will amplify the need for robust, efficient data center infrastructure – and a resilient, flexible electric grid with the capacity to support rising energy demand.

The future of data centers is not just about meeting their growing energy demand. It’s also about redefining their role within today’s electric grid – they can become valuable grid resources.

The grid cannot remain status quo to meet rising energy demand from data centers

The United States is witnessing explosive demand growth, and data centers are one of the key industries at the forefront of this transformation. A December 2024 report shows that total energy demand at U.S. data centers doubled between 2017 and 2023 – and energy usage at data centers in the U.S. could rise from 4.4% in 2023 to as much as 12% in 2028.

The growth and evolution of data centers, along with their massive energy footprint, are causing utility load forecasts to surge. This is placing unprecedented pressure on the electric grid. New generation assets – especially renewables necessary to the clean energy transition – are not being built fast enough to keep pace with the development of new data centers, risking future energy shortfalls.

Addressing these shortfalls cannot depend on backtracking to the status quo: traditional fossil-fuel-powered energy sources. Extending the operational lifespan of outdated power plants or constructing new ones that run on fossil fuels undermines global sustainability goals and is not cost-effective for the grid, as these assets are expensive to build, run, and maintain.

So, what can grid operators and utilities do? The good news is that effective strategies are already in place. By incentivizing data centers to be more efficient and dynamic regarding their energy use, they can support grid stability and unlock new opportunities for collaboration in the evolving energy landscape.

Data centers have the opportunity and responsibility to be part of the solution

Data centers can contribute to grid stability rather than adding to its burden. Many grid operators and utilities across North America offer grid flexibility programs, like demand response, that promote and incentivize energy conservation and efficiency. Participating in these programs involves strategically and temporarily lowering energy consumption when the grid needs it most – helping reduce demand levels to meet available supply and prevent outages. 

By adopting a more flexible energy usage strategy via demand response participation, data centers can unlock a range of benefits: 

• Earn revenue to offset energy spend – using existing infrastructure and without significant additional capital expenditure

• Become a good citizen of the grid – by contributing to the stability of the electric grid and supporting energy continuity in the local community

• Achieve more effective energy management strategies – through awareness of potential energy savings and optimizations

• Help reduce carbon emissions – being more efficient with existing assets minimizes the need to fire up fossil-fuel power plants, which traditionally were needed during “peak load” moments to maintain grid stability

• Receive advance notification of grid disturbances – knowing in advance when the grid could be unstable enables data centers to protect their assets by proactively transferring their load to backup generators (many demand response programs are called when the grid desperately needs support, meaning rolling brownouts and blackouts would otherwise be imminent)

How do data centers participate in demand response? Find out in our eBook.

It’s a fair point to believe that it may be challenging for data centers to participate in demand response. Data centers cannot simply reduce load – doing so would risk business continuity and data loss.

However, there are strategies and technologies that data centers can implement that can help overcome initial concerns that the temporary energy reductions needed to participate in demand response would be too risky for their operations – and ensure that operational continuity is never compromised. By leveraging existing resilience infrastructure like backup generators, these facilities have an incredible opportunity to lead the way in how flexible energy usage can help electricity markets meet rising demand.

In our eBook, “From load to resource: rethinking the role of data centers in today’s electric grid,” we explore actionable strategies for transforming data centers into grid assets by participating in demand response – without compromising operational continuity. Get your copy of our eBook today – and let’s reimagine what’s possible.