May 21, 2025
AI Data Centers Are Outpacing Power Grid Capacity—Experts Warn Outdated Regulations Threaten U.S. Energy Future
Facebook's parent company, Meta, plans to build a new $10 billion data center in rural Louisiana within the next several years. The data center's main purpose will be supporting Meta's AI projects. There is just one problem: there isn't enough power being generated in the local area to meet the facility's demands. So what is the solution?
The organization responsible for coordinating power generation and delivery in that part of the country is the Midcontinent Independent System Operator (MISO). It has submitted an Expedited Resource Adequacy Study (ERAS) to the federal government hoping to get an approval as quickly as possible. If approved, ERAS would establish a temporary approval and application process that could cut wait times for securing a power connection from years to just 90 days.
Although ERAS has its pros and cons, one thing is clear: power generation isn't keeping up with demand. It is also clear we have to rethink how we do things, or we might someday reach the point of scheduled brownouts and regular blackouts. We cannot continue to push the boundaries of power generation without coming up with workable solutions.
Data Centers Should Be a Focus
Rethinking power generation includes looking at the largest power consumers and where they are located. At the top of the list are data centers. Data centers are large facilities filled with thousands of computer servers, all crunching data, storing information, and serving up websites. Data center capacity must continue to expand to meet the needs of the digital generation.
Complicating matters is the rise of artificial intelligence (AI). Although engineers have been working on it for a long time, AI exploded onto the public scene a few years ago. It has not looked back since.
Big tech names like Google, Meta, and Microsoft are now engaged in a virtual arms race to see who will dominate the consumer AI space. They are joined by nearly every industry now looking for ways to leverage AI for its purposes. From healthcare to manufacturing and even power generation, AI is the wave of the future.
The thing is that AI requires massive data centers. It also requires mind numbing amounts of computer processing power. It all translates to ever-growing electricity demands at data centers across the country.
Hooking Up Has Become a Nightmare
The ironic thing in all of this is that we do not lack the technical ability to generate enough power to keep up. We know how to generate tremendous amounts of electricity using everything from fossil fuels to renewables to nuclear. The challenge is getting hooked up to the grid. It has become a nightmare.
Thanks to burdensome regulations, red tape, and a multi-layered approach that requires years to gain approval for new power plants, demand is outpacing our ability to produce. That is why ERAS is deemed so important in the Midwest and Mississippi Delta regions. There are power companies sitting on projects ready to go. They have not moved because they are still fighting through the approval process. Meanwhile, private sector data centers continue eating more and more power.
An Antiquated System
It has been said that America's grid is an antiquated system in need of an overhaul. Most of us in the industry would not argue. However, the current regulatory scheme is also an antiquated system never designed to meet current needs.
If we hope to keep up with increasing power demands, we need to rethink how we do things. We need to find ways to get power plants online more quickly. Otherwise, a world of hurt is waiting for us.
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