Data Center Demand Flexibility

This fact sheet from Energy Innovation outlines how data center electricity demand can be made flexible through workload shifting, operational reductions, and the use of backup power or storage to minimize the need for new fossil fuel generation and grid infrastructure.

• Data center electricity demand growth is projected to be between 74 and 132 gigawatts (GW), potentially accounting for 6.712 percent of U.S. electricity by 2028. Without policy changes to enable flexible operations, this growth could result in 25-50 GW of additional fossil generation by 2030 and the deferral of several GW of coal retirements.
• Small amounts of curtailment or flexibility can significantly reduce the need for new power resources. Curtailing just 0.5 percent of annual electricity use could allow 100 GW of data center load to be added nationwide without new peak resources, while turning down 25-50 percent during peak demand periods can reduce the need for new firm generation capacity such as gas plants.
• Specific regions with high proposed data center buildout, including PJM, MISO, ERCOT, SPP, and Southern Company, are identified as having the most potential for integrating flexible data centers.
• Policy tools to encourage flexibility include tying tax exemptions to demand response participation, offering faster interconnection for data centers that commit to flexibility programs (such as PG&E’s Flex Connect), and implementing utility rates that allocate costs based on the system impact of the customer.

APA

Energy Innovation (n.d.). Data Center Demand Flexibility. https://energyinnovation.org/wp-content/uploads/Data-Center-Demand-Flexibility.pdf

Chicago

Energy Innovation. Data Center Demand Flexibility. n.d. https://energyinnovation.org/wp-content/uploads/Data-Center-Demand-Flexibility.pdf.

Wikipedia

{{cite report |author=Energy Innovation |title=Data Center Demand Flexibility |url=https://energyinnovation.org/wp-content/uploads/Data-Center-Demand-Flexibility.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{energyinnovationnddata, author = {{Energy Innovation}}, title = {{Data Center Demand Flexibility}}, institution = {Energy Innovation}, url = {https://energyinnovation.org/wp-content/uploads/Data-Center-Demand-Flexibility.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }