A June 13, 2025, DataCenterKnowledge article reports that the North American Electric Reliability Corporation (NERC) has issued a rare warning, identifying large data centers as one of the greatest near-term risks to U.S. electric grid reliability. The rapid expansion of AI and cryptocurrency mining facilities, outpacing power plant and transmission line development, threatens system stability, with significant outages already occurring in Northern Virginia. NERC’s 2025 State of Reliability Technical Assessment calls for urgent action to integrate these energy-intensive facilities smoothly. This article explores NERC’s findings, the impact of data centers on grid stability, and proposed solutions, drawing on the technical assessment available at NERC’s 2025 State of Reliability Technical Assessment.
NERC’s Warning: Data Centers as a Grid Risk
NERC’s 2025 report highlights that data centers, particularly those supporting AI and crypto mining, are connecting to grids faster than infrastructure can support, leading to “lower system stability.” These facilities demand vast, unpredictable power, with consumption patterns sensitive to voltage swings, creating a “major wild card” for grids unprepared for such loads. Mark Lauby, NERC’s chief engineer, noted at a May 2025 conference that 1.5 gigawatts (GW) of data centers tripped offline in Northern Virginia in July 2024, followed by 1.8 GW in February 2025, due to voltage issues. Such outages, comparable to a large nuclear plant going offline unexpectedly, can destabilize entire regions, per NERC’s assessment.
Impact on Grid Stability
Data centers’ power demands, projected to rise from 2.5% to 7.5% of U.S. electricity by 2030, exacerbate a national ~50 GW grid deficit, with blackout risks looming by 2035. Northern Virginia, the world’s data center capital, saw outages affecting 3.3 GW total, equivalent to 5% of the regional grid’s demand, causing ripple effects. The report notes that data centers’ sensitivity to voltage dips prompts automatic disconnections to on-site generators, creating sudden load losses that disrupt grid balance. This unpredictability, coupled with high-voltage cable shortages (lead times to 2029), challenges utilities like Dominion Energy, which face an 85% demand surge over 15 years.
AI and Crypto Driving Demand
The AI boom, deemed a national security imperative by Washington, fuels data center growth, with facilities like xAI’s Colossus requiring 1–5 MW per rack. Cryptocurrency mining, less regulated than Big Tech’s operations, adds further strain, with a Wood Mackenzie analysis estimating crypto’s grid demand equals 25% of Texas’s peak load. Unlike tech giants, crypto miners rarely build renewable energy projects, hindering grid decarbonization. NERC’s report underscores that data centers’ unpredictable power usage, unlike traditional industrial loads, requires new forecasting models to prevent imbalances, as seen in Virginia’s outages.
Proposed Solutions: Batteries and Grid Integration
NERC’s assessment suggests batteries are proving effective in stabilizing grids, smoothing data center power fluctuations. Applied Digital’s North Dakota facility, using 400 MW from a wind farm, exemplifies battery integration, per industry reports. Medium voltage load banks, with three-cable connections, test substation relay settings, ensuring reliability and reducing outage risks by 15%. NERC calls for better load forecasting models, urging utilities to update reliability standards for data centers and crypto miners. Proposals include requiring centers to “ride through” voltage dips without disconnecting, minimizing grid disruptions, though this risks tech firms relocating to less-regulated states.
Regional and Economic Context
Northern Virginia’s outages highlight regional vulnerabilities, with 60 data centers disconnecting in a single 2024 incident due to a failed surge protector, per Reuters. Arizona’s Phoenix hub, with projects like Novva’s 300 MW Mesa campus, faces similar grid constraints, consuming 16.5% of state electricity by 2030. Economic benefits, including 1,688 construction jobs and $243.5 million per project, are tempered by grid costs, with $9.4 billion in delayed U.S. projects since 2023. Posts on X reflect urgency, with users like @lwsresearch noting the need for better forecasting to manage AI-driven surges.
Future Outlook: Balancing Growth and Stability
NERC’s report projects a tripling of data center power demand by 2028, necessitating 300 GW of new U.S. nuclear capacity by 2050, per DOE estimates. Innovations like Microsoft’s Three Mile Island restart and Amazon’s SMR investments aim to meet this demand, but development timelines (5+ years) lag AI’s pace. On-site generation, as in Crusoe’s 1.2 GW Abilene, TX, project, bypasses grid congestion, while load bank testing ensures reliability. By 2035, updated standards and battery integration could stabilize grids, supporting AI’s national security role while preventing blackouts.
Looking Ahead
Data centers, critical for AI and digital services, pose a significant threat to U.S. grid reliability, as NERC’s 2025 assessment warns. Outages in Northern Virginia underscore the urgency of integrating these facilities, with 1.5–1.8 GW losses disrupting stability. Solutions like batteries, load bank testing, and revised standards offer hope, but a ~50 GW deficit looms. As hubs like Phoenix and Abilene expand, balancing economic growth with grid resilience is paramount. With NERC’s roadmap, the U.S. can harness AI’s potential while securing a stable energy future. For details, see NERC’s report: 2025 State of Reliability Technical Assessment.