The Data Center Power Crisis Is Here: Why Grid Limits Could Reshape AI Infrastructure

AI infrastructure provider Crusoe and modular nuclear company Blue Energy announced a new partnership focused on developing and operating a 1.5 GW nuclear-powered data center campus. 

With modular nuclear, there are still numerous hurdles to overcome. 

But assuming that works, Crusoe and Blue Energy will power the data facilities in the interim with on-site gas generation. They cal it the world’s first gas-to-nuclear conversion, with the transition to nuclear by 2031.

Most data centers are still trying to connect to the grid, but competitions is fierce, and the process is messy.

An unnamed developer there is no one size fits all process, and some utilities are remarkably ill-prepared.

The October 23 letter from Secretary of Energy Chris Wright to the FERC addresses this, directing FERC to develop an interconnection rulemaking for data centers. 

But why not skip the grid and go with on-site co-located power for the long run? Because generation plants break down on occasion, and eventually need to go out for maintenance. 

Data facilities not tied to the grid may have to carry considerable excess capacity. A 200 MW data center in Ohio needs 30 machines, totaling 320 MW address those issues.

For those trying to connect to the grid, transmissions takes forerver to build, in some cases over 15 years (Space’s rocket went from design to orbit in less than 6)

Texas is planning a huge new investment in transmission, but it will still fall shoert of what may be needed.  

But today’s inefficient grid - operating at a roughly 53% load factor – is an opportunity IF we can build more flexibility into the data centers and the overall system. One study suggests that with flexibility, one could interconnect 10’s of thousands of additional MWs. 

Chipmaker NVidia is working with software vendor Emerald AI on flexible data centers, perhaps cutting loads by 25% when needed..

Or data companies could bring their own generation, so grid operators can disconnect them from the grid when necessary. 

Data centers might also be able to buy capacity from somebody else, an approach DR provider Voltus and others are pursuing.