Data Center Demand Flexibility

The document outlines how data centers can increase electricity demand flexibility by shifting workloads, reducing operations, or using onsite storage. It highlights that without policy changes, data center growth could lead to 25-50 GW of additional fossil generation by 2030. Conversely, curtailing just 0.5 percent of annual electricity use could allow 100 GW of load to be added nationwide without new peak resources. Proposed policy tools include tying tax incentives to demand response participation, enabling faster interconnection for flexible facilities, and implementing utility rates that align costs with system impact.

• Data center electricity demand growth is projected to be between 74 and 132 gigawatts (GW) by 2028, representing 6.712 percent of U.S. electricity usage.
• Failure to implement policy changes and flexible operations for data centers may result in 25-50 GW of additional fossil generation by 2030 and the deferral of several GW of coal retirements.
• Adding 100 GW of data center load nationwide would not require new peak resources if these centers curtail 0.5 percent of their annual electricity use to avoid peak demand periods.
• Data centers that reduce power usage by 25-50 percent during peak demand periods can significantly lower emissions and costs while reducing the need for new firm generation capacity, such as gas plants.
• The regions with the greatest potential for integrating flexible data centers are Southern Company, SPP, ERCOT, MISO, and PJM.

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} }