US Calls on Data Centers to Prepare Backup Power Ahead of Storm

The US government has ordered grid operators to make backup power from data centers and other facilities available in anticipation of a record-breaking winter storm. Secretary of Energy Chris Wright said the move is part of broader efforts to address energy shortages and high prices according to Bloomberg. The Energy Department is using emergency authority to tap into unused power generation capacity in case of outages as reported by the Wall Street Journal.

The storm is expected to affect more than 175 million people in the central and eastern US, with heavy snow, ice, and freezing rain forecast over the weekend according to Bloomberg. Texas, Louisiana, Arkansas, and other southern states are particularly at risk due to the potential for ice to bring down power lines and trees as Forbes reports.

Texas Governor Greg Abbott has already declared a state of disaster for more than half the state’s counties. ERCOT, the state’s main grid operator, is monitoring conditions and expects to have sufficient power supply to manage the storm according to Bloomberg.

Why the Move Happened

The call for data centers to provide backup power is an unusual step. Most such facilities rely on their own power generation and do not typically contribute energy back to the grid as the Wall Street Journal notes. However, the government has identified 35 gigawatts of unused capacity that could be activated if needed according to Bloomberg.

Energy Secretary Chris Wright explained that the program has been in development for several months and could also be used during peak summer demand as reported by the Wall Street Journal. The move is part of a broader effort to address energy challenges, including those posed by the growing power demands of artificial intelligence and data centers according to Seeking Alpha.

How Grid Operators Are Responding

Grid operators across the country are preparing for the worst. In Texas, ERCOT has issued a “Weather Watch” for the period from January 24 to January 27. Grid conditions are expected to remain normal, but officials are closely monitoring demand and supply levels.

CenterPoint Energy has also taken proactive steps, increasing its workforce to 3,300 and setting up staging sites in strategic locations to prepare for potential outages according to Seeking Alpha. Other utility companies are conducting vegetation management and inspecting equipment to minimize the risk of failures.

What Analysts Are Watching

Analysts are closely watching the performance of the power grid, particularly in Texas and the South. The region has not faced a major test of its energy infrastructure since the 2021 Winter Storm Uri, which led to widespread blackouts and fatalities as Forbes reports. While ERCOT has implemented upgrades and weatherization measures, questions remain about whether the grid can withstand the combination of extreme cold and ice according to Forbes.

Energy officials are also monitoring the impact of the storm on natural gas production, which can be disrupted in subfreezing temperatures as Forbes notes. Many operators may choose to shut in wells rather than risk sending crews into dangerous conditions, which could affect power generation according to Forbes.

Investors are watching how the storm affects energy prices and the broader power market. The government’s ability to tap into backup power from data centers and other facilities may help stabilize prices and prevent rolling blackouts according to Bloomberg.

The situation remains fluid, with weather forecasts and grid conditions subject to change. Officials are advising residents to prepare for potential outages by having emergency supplies and knowing how to respond to extreme cold as Forbes reports.