Huge, electricity-gobbling data centers are being developed faster than the generation and transmission infrastructure needed to support them—a dilemma that threatens grid reliability, according to the 2025 State of Reliability assessment by the North American Electric Reliability Corp.
“A significant near-term reliability challenge … is the size and speed at which large data centers, typically developed to support the computing needs for AI and cryptocurrency mining, are expanding across the country,” the report says.
Data centers are often built within two years—much faster than traditional industrial loads, the June 12 NERC report says.
Electric cooperatives are increasingly seeing data centers coming into their rural territories, asking for large amounts of power to flow into their businesses 24 hours a day, seven days a week. Many of them are owned by tech giants, including Google, Amazon and Meta.
“Planning generation and transmission to accommodate such large step-changes in load is made even more complicated by the speculative nature of where and if these new facilities will be built,” NERC’s assessment says.
At NRECA’s PowerXchange in March, co-op leaders who have dealt with data centers warned their colleagues to beware of real estate developers and other speculators who try to get a deal on power costs in order to attract a data center as a client.
Unpredictable power usage by data centers underscores the need for more accurate tools to help grid operators prevent instability, the NERC report says.
“Model analysis tools are used when planning to identify things like worst-case scenarios and how to deal with them … Better models of data center loads are needed to improve planning and preparations.”
A 2024 report by the Department of Energy said data centers consumed about 4.4% of total U.S. electricity in 2023 and are expected to use up to 12% by 2028.
“As more of this load interconnects [to the grid], the risk will continue to grow,” Jack Norris, an electrical engineer in performance analysis at NERC, said during a June 12 webinar on the State of Reliability assessment.
NERC’s Large Load Task Force will recommend mitigation measures in a report to be released this fall.
Erin Kelly is a staff writer for NRECA.