US power grid faces stress test amid arctic chill, data center demand

By Tim McLaughlin and Scott DiSavino

Jan 22 (Reuters) – The U.S. power grid faces an elevated risk of disruption over the next several days as an Arctic blast and reduced gas supplies test the sturdiness of electric infrastructure vulnerable to the around-the-clock demands of data centers.

Beginning Friday, an extreme weather pattern of Arctic cold is expected to evolve and bring extremely low temperatures and heavy snow and ice, with the potential to create significant challenges for the electric grid through next week. That was the assessment given on Thursday by the North American Electric Reliability Corporation, the top regulator for power reliability in the United States.

Cold weather has already started to reduce gas supplies by freezing oil and gas wells and pipes in several Midwest and Great Plains states [NGA/].

As a result, U.S. natural gas futures soared by a record 63% over the past three days to a six-week high on Thursday on forecasts of extreme cold over the next two weeks.

Demand next week is expected to approach last winter’s record as homes and businesses crank up their heaters to escape a brutal cold snap, according to power grid operators, analysts and data from financial firm LSEG.

Meanwhile, winter electricity demand on the largest U.S. power grid – the PJM Interconnection – is expected to set an all-time record next week.

“Peak demand has the potential to exceed 130,000 MW for seven straight days next week, a winter streak that PJM has never experienced,” the grid operator said on Thursday in a cautionary alert.

“Depending on temperatures, PJM could set a new all-time winter peak load on Jan. 27. And that cold could extend into early February, so PJM is taking additional precautions with its generation and transmission owners to prepare.”

PJM serves 67 million people in 13 states and Washington, D.C. It has been struggling to keep up with booming demand from the proliferation of Big Tech’s power-hungry data centers needed for the rapid expansion of artificial intelligence.

In recent years, regional grids, including PJM, have been caught flat-footed by extreme weather.

The worst episode happened in Texas in early 2021 when more than 200 people died as the state’s main grid lost nearly 50% of its generation capacity. Millions of Texans were left without power, including the family of an 11-year-old boy who froze to death while sleeping in his bed.

The Electric Reliability Council of Texas (ERCOT), the state’s main grid operator, was criticized in after-action reports for not making sure the system was properly winterized.

Since then, stricter state and federal rules have been implemented to require better winter readiness by utilities and grid operators. ERCOT, for example, plans to complete a minimum of 450 inspections this winter season (December–February). As of January 18, 240 inspections had been completed, ERCOT said.

But the gap between winter and summer peaks is narrowing, caused by rapid data center growth, said Philip Krein, a grid expert at the University of Illinois Urbana-Champaign.

That means utilities have less time to take power plants offline, for example, to perform maintenance.

“That makes the grid more vulnerable,” Krein said. “The maintenance season is being squeezed like never before.”

ERCOT and PJM both said they expected they will have enough generation to meet demand this winter.

However, ERCOT has forecast there’s a slight chance – 1.18% – of a small, controlled blackout on the morning of January 31.

ERCOT CEO Pablo Vegas said on Thursday he was confident the Texas grid will be able to handle the demands of cold weather.

(Reporting By Tim McLaughlin; Editing by Nia Williams and Diane Craft)