Data centers’ ‘flexible’ power usage could save the grid billions. Can they scale?

Technology companies and utilities are increasingly exploring ways to make power-hungry data centers more flexible in when and how they consume electricity, helping ease the strain on US power grids as AI-driven demand surges.

The strategy, called “demand response”, involves data centers temporarily reducing or shifting electricity use during periods of peak demand or grid stress, and is gaining traction as a way to reduce the need for costly grid upgrades and new power generation.

It’s a tool that states around the US, federal agencies and market operators are increasingly exploring, said Lauren Shwisberg, a principal at energy think tank RMI.