Data Center Disconnect Threatens US Grid Stability

A mass disconnection of data centers in Northern Virginia last summer highlighted a growing vulnerability in the US power grid, according to a Reuters report. The incident, which saw 60 data centers switch to on-site generators, triggered a huge surge in excess electricity.

The disconnection, intended to protect computer chips and electronic equipment from voltage fluctuations, forced grid operator PJM and local utility Dominion Energy to scale back output from power plants to prevent cascading outages.

"As these data centers get bigger and consume more energy, the grid is not designed to withstand the loss of 1,500-megawatt data centers," John Moura, Director of Reliability Assessment and System Analysis for NERC, told Reuters.

The rapid expansion of data centers, driven by the increasing demand for AI and cryptocurrency mining, is creating new challenges for grid operators, who are struggling to adapt to the potential for unannounced disconnections.

"What it tells us is that the behavior of data centers has the potential to cause cascading power outages for an entire region," said Alison Silverstein, a former senior adviser to the chairman of the US Federal Energy Regulatory Commission.

The July 10 incident, which occurred in "Data Center Alley," a 30-square-mile area outside Washington D.C., affected a significant portion of the world's internet traffic.

In response, the North American Electric Reliability Corporation (NERC) formed a task force to study mass disconnections by data centers and cryptocurrency miners.

Reuters, citing regulatory documents and interviews with industry executives, found that the incident was triggered by a failed surge protector on Dominion's Ox-Possum 230-kilovolt line near Fairfax, Virginia.

The number of similar near-miss events has been increasing rapidly over the past five years, with the amount of power used by data centers tripling over the past decade. The US Department of Energy predicts this trend will continue, with data center electricity consumption potentially tripling again by 2028.

A Reuters review of filings by the Electric Reliability Council of Texas (ERCOT) identified over 30 near-miss incidents since 2020, caused by various large energy users, including data centers and cryptocurrency miners, switching offline.

One notable incident in December 2022 saw a failed transformer in west Texas cause nearly 400 cryptocurrency miners, data centers, and oil and gas facilities to disconnect, resulting in a significant oversupply of electricity and forcing power generation to shut down.

"The risk of power outages will only grow as new data centers come online," warned NERC in a December report. The report also highlighted the increasing risk of energy shortages across the United States over the next 5 to 10 years, urging utilities to update federal reliability standards for data centers and cryptocurrency miners.

Many data centers are designed to switch to local generators at the slightest hint of a problem on the grid, to minimize service interruptions. However, this approach has raised concerns among grid operators, who have proposed requiring data centers to "ride through" routine voltage dips without disconnecting.

This proposal has faced resistance from data center operators, who cite the risk of damaging electronic equipment and cooling systems.

ERCOT, for example, withdrew a proposal that would have imposed ride-through restrictions on data centers and cryptocurrency miners after facing pushback from the Data Center Coalition, a group representing major players like Amazon, Google, and Meta.

"Data center hardware and power supplies, similar to other electronics, are very sensitive to power supply stability," the coalition stated in comments filed with ERCOT. "Deviating from this range will deteriorate the optimal performance, reduce longevity, or damage the components beyond repair."

The coalition has expressed a commitment to working with grid operators to address these challenges.