The U.S. Department of Energy will invest roughly $1.9 billion to speed upgrades to the nation’s power grid as electricity demand rises sharply. Rapid growth in AI and cryptocurrency data centers, along with electrification of heating and transport, are driving the increase. The funds aim to prepare the grid for higher loads and lower costs, with projects required to show how reconductoring and higher-capacity transmission technologies will strengthen the system.
DOE to Invest $1.9 Billion to Speed Nationwide Power Grid Upgrades Amid Surge in AI and Crypto Demand
A local resident walks by the power grid towers at Bair Island State Marine Park in Redwood City, California, United States, January 26, 2022. REUTERS/Carlos Barria
The U.S. Department of Energy (DOE) said on Thursday it will invest about $1.9 billion to accelerate upgrades to the nation's electric grid as electricity demand is expected to rise sharply this year and next.
Officials cited rapid expansion of artificial intelligence and cryptocurrency data centers, together with increased electrification of heating and transport, as primary drivers of the surge in power demand. That increased demand has already contributed to higher electricity prices across large swaths of the country.
What the Funding Will Do
The DOE said the funding will help prepare the grid for growing loads and aim to lower electricity costs for households and businesses. Selected projects will need to demonstrate how reconductoring — replacing existing power lines with higher-capacity conductors — combined with modern transmission technologies can bolster reliability and capacity on congested corridors.
Utilities are already adding power lines and other equipment as data centers push U.S. electricity consumption above two decades of relatively flat demand. The DOE program is intended to accelerate practical, deployable solutions that increase line capacity and reduce bottlenecks without necessarily building entirely new transmission corridors.
Why It Matters
Strengthening transmission and upgrading conductors can increase available capacity, reduce outages and curtailment, and help keep consumer prices lower as new high-load facilities come online.
(Reporting by Pranav Mathur in Bengaluru; Editing by Sahal Muhammed)
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