How Can Data Centers Expand Without Passing the Costs to Other Energy Users?

Bryce Yonker (0:00)

Welcome to the next edition of GridPulse. I'm Bryce Yonker with Grid Forward. Today we have with us two folks at very respectable universities as well as wearing other hats, and we're going to dive in on the topic of what data center expansion does to the grid, in particular grid rates. So Paulina Jaramillo is with Carnegie Mellon, and Abe Silverman is with Johns Hopkins. Welcome.

Great.

Abe Silverman (0:25)

Thanks to be here.

Paulina Jaramillo (0:25)

Thank you.

Bryce Yonker (0:27)

So Paulina, if you don't mind, maybe you can introduce yourself and the role that you have at the university.

Paulina Jaramillo (0:32)

Yeah. I'm Paulina Jaramillo. I'm a professor in the Department of Engineering and Policy at Carnegie Mellon University. My research focuses on energy system modeling, energy transition analysis. I do climate change related work and sustainability broadly.

I also serve as the co-director of the Open Energy Outlook Initiative, which is a collaboration between a group here at Carnegie Mellon and a group at North Carolina State University, where we have developed and managed an open source energy system model, and we've been using that model to do analysis of grid transitions, including a lot of recent work on data centers. Great.

Bryce Yonker (1:19)

Thanks, Paulina. Abe, if you don't mind introducing yourself.

Abe Silverman (1:23)

Abe Silverman, I'm a research scholar at Johns Hopkins University. I've been doing this energy stuff for about 20 years. Actually, most of my career has been in either government or the private sector. So I'm a recovering FERC attorney who has somehow migrated to Johns Hopkins University, where I'm in the Ralph O'Connor Sustainable Energy Institute.

Really, we work on understanding what's going on on the grid, very much the same thing that Paulina does, except from my perspective, it's a little bit more policy focused, and in particular, how do states take the kind of research that's happening in our fine research institutions and the Department of Energy and other places, and actually apply it to today's energy market challenges, of which there are many, and I know we're going to talk about some of them today.

Bryce Yonker (2:07)

All right. So let's jump in, and we're going to dive right in, in the deep end, if you will. There's been a surge in demand driven in large part by data centers, exclusively, and I just wanted to maybe talk a little bit about the sort of scale that you all are seeing.

Is this a small increase? Is this a moderate increase? Is this a tectonic increase? Abe, maybe you can start and Paulina can add in.

Abe Silverman (2:33)

Yeah, sure. I'm going straight to tectonic with a wide degree of uncertainty.

And a lot of what we talk about here is really how do we deal with an uncertain load forecast. But if you believe the data centers and you believe load forecasts we're seeing, we are seeing levels of growth in energy consumption that we frankly have not seen since the 1960s and 70s.

We're talking about every household in America getting air conditioning, and real industrial growth was the last time we saw this. So it's really large and I actually like to put it in scale. A lot of my work is here in the PJM region, which is the 13 states that make up the Mid-Atlantic area plus Washington DC. We are talking about adding a Philadelphia's worth of electricity to the grid every year between now and the early 2030s, just to handle the increased data center load. So we're talking about adding six to eight gigawatts a year, the size of a really pretty significant city, and we're supposed to do that over and over and over again, and obviously something's got to give.

Bryce Yonker (3:41)

Anything different than we've seen in decades, but anything else on the scale that we're facing right now?

Paulina Jaramillo (3:46)

No, I agree with Abe. This is unprecedented growth in the last 40 years, after decades of very flat demand or very small growth.

The Lawrence Berkeley National Lab estimates suggest it could reach 50% of annual electricity demand nationwide from nothing five years ago. So it's just an unprecedented growth.

Bryce Yonker (4:16)

Yeah, everybody's plan seems to be ticking up every cycle they get to it. Well, let's talk about the role that data centers are having in this growth. It's driving a big part of it. Again, with a lot of the uncertainty being attributed to that part of the equation.

But generally speaking, whether it's systematically, operationally, from a policy, we're going to get deep into the rate side of this. What sort of impact is this data center expansion having on the grid system?