The PJM interconnection serves 67 million customers and is one of the largest grid/) operators in the United States. Data centers are increasingly concentrated in regions like northern Virginia, home to more data centers than any other place globally. Their simultaneous response to voltage disturbances can amplify grid instability, as seen in this event.
A single power line fell near Washington, DC. That caused a voltage dip. Data centers close to the incident are equipped with safety mechanisms that automatically engage backup power upon detecting a voltage drop.
So they did exactly what they were designed to do. But because so many of them did it within seconds, the grid suddenly lost a huge chunk of demand.
To put that in perspective, the grid normally handles fluctuations in milliseconds. This time, the sudden drop created a massive surplus of electricity.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
The peak surplus hit 3.49 gigawatts. The grid took 11 minutes to stabilize. Normally that happens in seconds.
At that moment, those facilities represented roughly 3% of PJM's overall electricity demand, per Reuters. But their concentrated geography and identical response created a problem way bigger than their size.
This was not a one-time freak event. The numbers are getting bigger because data centers are getting bigger.
"It's the canary in the coal mine," said Ricardo de Azevedo, CTO of ON.Energy, a startup that develops an uninterruptible power supply for entire data center campuses. "These sorts of events involving large loads like data centers are happening more and more," he added.
The core issue is coordination. When each data center makes an independent decision to switch to backup power, they can all do it at the exact same moment. That sudden collective move is what destabilizes the grid. Ali Zain Banatwala of the Independent Electricity System Operator, a senior market models specialist, said: "We need to figure a way for these loads that are located next to each other to sequentially either disconnect or reconnect."
Solutions are already in the works. ON.Energy is deploying 3 gigawatts of its battery-based systems across four separate data center campuses, according to de Azevedo. The setup conceals the data center behind a collection of batteries and advanced power conversion gear, making the grid perceive a steady, predictable load. It can soak up voltage swings from the grid instead of disconnecting, and it can respond to grid signals in milliseconds.
Grid operators have also become aware of the issue. ERCOT, for instance, plans to mandate that large loads such as data centers "ride through" disruptions, according to de Azevedo. However, time is running short.
The recent mass disconnection was twice the magnitude of the 2024 occurrence. If left unaddressed, the situation could deteriorate significantly.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
