Energy Department will spend $2 billion to squeeze more electricity from the aging power grid
The U.S. Department of Energy will spend almost $2 billion on 31 projects across 26 states to upgrade the aging power grid and meet skyrocketing energy demand, largely driven by artificial intelligence and data centers. This funding aims to improve power reliability, lower electricity costs, and avoid blackouts. Energy Secretary Chris Wright promoted the grant program at a PPL Corp. facility in Allentown, Pennsylvania, a utility that has multiple data centers in its service territory.
The U.S. Department of Energy announced a nearly $2 billion investment to upgrade the nation's aging and strained power grid, aiming to extract more electricity to meet the soaring demand from artificial intelligence (AI) and data centers. The funding will support 31 projects across 26 states, which are expected to generate over 23 gigawatts of additional electricity capacity, enough to power 16 million homes. These projects will deploy new technologies like sensors to improve transmission safety and efficiency, thereby enhancing power reliability and potentially lowering costs for approximately 100 million Americans.
Energy Secretary Chris Wright emphasized that these investments will optimize existing infrastructure and deliver affordable, reliable power. He was scheduled to promote the grant program at a PPL Corp. facility in Allentown, Pennsylvania, a utility whose territory has seen two new data centers come online this year and six more under construction. The announcement comes amidst concerns that AI's energy consumption is overwhelming U.S. power supplies, leading to rising electricity bills and growing community opposition to data center developments nationwide.
Despite this opposition, former President Donald Trump has expressed support for data centers, arguing that communities without them will fall behind. Concurrently, Congress and several states are urging regulators to mandate that utilities adopt more efficient grid technologies. The Energy Department's funding, which will be matched by $3.35 billion from recipients, originates from the bipartisan infrastructure law enacted during the Biden administration. The Trump administration has also pushed for policies to facilitate data center connections to power infrastructure and has proposed an Environmental Protection Agency plan that would limit public input on new AI data center proposals.