Costs and reliability concerns related to the burgeoning trend of building energy-intensive data centres next to US power plants were the focus of a technical conference held by the US Federal Energy Regulatory Commission.
As the technology industry races to deploy data centres for technologies like generative artificial intelligence, quickly accessing the massive amounts of electricity for the centres has become a critical problem.
Connecting data centres directly to power plants, in an arrangement known as co-location, has presented a fast route to accessing large amounts of electricity, instead of toiling for years in queues to connect to the broader grid.
“I believe that the federal government, including this agency, should be doing the very best it can to nurture and foster their development,” said FERC Chairman Willie Phillips, adding he considered AI centres vital to national security and the US economy.
This year Amazon bought a data centre powered directly by a Pennsylvania nuclear plant owned by Talen Energy. Shares of fellow major independent nuclear operators, including Constellation and Vistra, have shot up this year partially on the prospect of striking similar deals.
The possibility of a ballooning number of co-located data centres has raised questions about potentially higher power bills for everyday customers because the centres will use grid infrastructure and services paid for by the public.
Connecting data centres directly to power plants that had been supplying power to the public has also sparked reliability concerns, in part, because they can divert steady power from the grid.
FERC questioned whether the co-located centres would use the grid as backup power and what will happen if the neighbouring power plant unexpectedly goes offline.
“Does the customer get to still draw power from the grid? Because if it does, that’s going to have a huge impact,” said Commissioner Mark Christie.
The technical conference could lead to new co-located data centre guidelines, including ones that determine who is responsible for transmission and distribution upgrade costs and how agreements for the centres are governed.
FERC is also currently gathering details on a regulatory battle being waged by electric utilities over the co-located Amazon data centre agreement with Talen Energy.
Talen’s interconnection agreement for the centre is being opposed by utilities Exelon and American Electric Power, and FERC’s decision on the case could set a precedent for similar deals.
The data centre would take as much as 960 megawatts, or enough to power nearly 1 million American homes, of nuclear energy from the largest U.S. electrical grid.
At the conference, Joseph Bowring, watchdog for PJM Interconnection market activity, said more co-located data centres at nuclear plants would exacerbate the region’s supply-demand imbalance.
“It is not a way to solve the problem, it is a way to actually make it worse,” Bowring said, recommending that data centre developers instead help bring more power online.
Brian George, Google’s head of global energy market development and policy, said Google’s interest in co-located developments is being driven by a need to access electricity and not to avoid the associated costs.
“We will pay for our fair share of those costs,” George said.