Near Misses Instill Fears Over Widespread Data Center-Induced Blackouts

Data centers nearly caused widespread blackouts in Virginia last summer, one of a series of near misses across the U.S. as data centers strain regional power grids. 

On July 10, without warning, 60 data centers in Northern Virginia all disconnected from the power grid at once and switched to backup generators — an automated safety response to voltage fluctuation caused by an equipment failure on a nearby transmission line, Reuters reported Wednesday. 

The result was a massive surge in excess electricity that sent both grid operator PJM and utility Dominion Energy scrambling to cut generation quickly enough to avoid damage to infrastructure and potentially regionwide blackouts. 

This close brush with catastrophe set off alarm bells with federal grid regulators, who are becoming increasingly concerned about the growing reliability risk posed by data centers disconnecting from the grid en masse. The North American Electric Reliability Corporation, a federal agency that monitors grid reliability, created a task force following the Virginia near miss specifically to study this vulnerability. 

While power grids are designed to accommodate large electricity consumers disconnecting unexpectedly, regulators told Reuters that data centers are testing the system’s ability to deal with this kind of volatility. Not only is the number of data centers increasing amid a digital infrastructure building boom, but many new data center projects consume hundreds of megawatts more than older facilities. As a result, unanticipated disconnections are more likely to put the grid at risk. 

These near misses have occurred with growing frequency over the past five years in parallel with the rapid expansion of the data center industry. Texas alone has experienced 30 such incidents since 2020 caused by data centers suddenly dropping off the grid, Reuters reports, citing state disclosure filings. In one such event, 400 data centers and other industrial facilities disconnected at once, leading to a 1.7 gigawatt oversupply of power.

“What it tells us is that the behavior of data centers has the potential to cause cascading power outages for an entire region,” former Federal Energy Regulatory Commission Senior Adviser Alison Silverstein told Reuters.

Although these close calls have largely been limited to regions with the densest concentrations of data centers like Virginia and Texas, NERC anticipates that all of the U.S. will face these issues within the next decade as data center development spreads and the industry’s power demand grows. 

The agency is urging utilities to update reliability standards for data centers. At the same time, some grid operators are proposing measures that would prohibit data centers from disconnecting during voltage fluctuation — rules that have faced vigorous pushback from the data center industry.

In a statement to Bisnow, the industry advocacy group Data Center Coalition pushed back on the idea that data centers should shoulder the blame for near-miss incidents like those in Virginia and Texas.

The data center sector is just one of many industries whose growing energy consumption is driving the nationwide spike in electricity demand, said Aaron Tinjum, the Data Center Coalition’s vice president of energy. And while the industry may play a role in helping utilities and grid operators navigate the demand surge, he emphasized that data centers must be able to disconnect from unstable grid infrastructure to prevent equipment damage and data center outages that can have widespread economic consequences. 

“To be clear, data centers did not cause the referenced fault in Virginia,” Tinjum said. “They responded to protect equipment and maintain continuity of operations that are essential to our modern economy and daily lives.”

Still, the suggestion that data centers have come perilously close to triggering regional blackouts adds fuel to increasingly contentious debates in states across the U.S. about how the data center industry, utilities and grid operators should address data centers’  growing appetite for power and the risks that come with it. 

The industry’s share of U.S. power consumption is expected to leap from 2.3% in 2023 to 6.6% in 2028.

This demand spike has led to concerns about grid reliability and rising costs for electricity consumers as utilities scramble to build out billions of dollars of new infrastructure to serve the data center sector. Elected officials, regulators and utilities in more than a dozen states are considering a range of measures to mitigate this risk, from moratoriums on data center development to data center power contracts that require upfront payments for infrastructure costs. 

UPDATE, MARCH 20, 4:30 P.M. ET: This story has been updated to reflect comments from the Data Center Coalition.