The U.S. energy grid is under unprecedented pressure, driven by rising demand from artificial intelligence (AI)-enabled data centers and the rapid adoption of electrification and electric vehicles (EVs). As these two sectors expand, their combined energy demands are driving the country’s energy consumption to new highs, forcing the electric grid to adapt to support modern technological and environmental ambitions.
The rapid advancement of AI-powered data centers alone is expected to be responsible for this 8% of total US energy consumption by 2030, up from 3% in 2022, while the energy consumption of the EV infrastructure is also rise dramatically. This trend has increased the need to strengthen the energy network so it can meet the demands of a digitally connected, electrified future. Meeting these rising energy needs while maintaining the stability of the electricity grid is no small feat. It requires the adoption of innovative energy strategies such as distributed energy resources (DERs) and microgrids, which provide viable solutions for a more resilient, responsive energy infrastructure.
Data centers, electric vehicles and the growing complexity of the electricity grid
The transformation of energy infrastructure is particularly urgent in places like “data center alley” in Virginia, where energy demand is peaking. Data centers – the lifeblood of AI and cloud computing – are clustered in such areas, pushing network capacity to its limits. Meanwhile, the proliferation of electric vehicles is putting similar pressure on local networks as demand for electric vehicle charging infrastructure explodes, especially in high-density regions such as Los Angeles and the Bay Area.
This dual pressure from AI and EVs doesn’t just reflect the need for more energy; it also complicates the logistics of power distribution, especially as utilities strive to reduce carbon emissions and increase the security of the electrical grid. Extreme weather events and climate impacts have further underscored the need for a resilient power grid that can handle both expected and sudden demands. However, the evolution of the electricity grid does not stop at adding capacity; it requires a flexible, distributed model that supports local energy generation and rapid response to demand fluctuations.
The role of microgrids in a resilient future
Microgrids have emerged as essential tools in the quest for a more sustainable, resilient energy system. Unlike traditional grids that rely on large, centralized power plants, microgrids function as self-contained networks that can generate, store and use electricity on site. This capability allows them to maintain operations independently of the main grid during power outages or when energy demand rises sharply. Microgrids also offer the flexibility to integrate renewable energy sources such as solar and wind, which aligns well with decarbonization goals while adding a layer of energy independence.
Microgrids are designed to provide three key benefits: ensuring energy resilience, improving cost predictability, and integrating clean energy sources. For example, JFK Airport’s smart grid, which includes solar and on-site battery storage, provides energy backup during disruptions, demonstrating how critical infrastructure can remain operational even when the central power grid falters. Such models underscore the value of microgrids as a solution for facilities and communities seeking to protect themselves from grid outages and instability.
The use of microgrids also offers an attractive economic opportunity. By generating and storing energy locally, organizations and communities gain control over energy costs, reduce dependence on external energy and can even sell excess energy back to the main grid. For facilities that manage high-demand operations, such as data centers, these capabilities provide greater reliability while supporting sustainability through the use of renewable energy.
Overcoming barriers to widespread microgrid adoption
Despite their potential, microgrids face hurdles that have limited their widespread adoption in commercial, industrial, and infrastructure applications. Regulatory complexity, high upfront costs and a lack of standardized systems have hindered the scalability of microgrids. Unlike solar or wind projects that benefit from federal incentives and streamlined regulations, microgrid policies vary widely by state, creating uncertainty for investors and operators. Today’s microgrid projects are often custom designed, resulting in longer implementation times and significant costs, typically ranging between $2 to 5 million per megawatt.
To overcome these obstacles, energy innovators are exploring new financial models such as energy as a service (EaaS), which can make microgrids more financially accessible by spreading costs over time and bringing the expertise to further reduce complexity and risks. control. The introduction of standardized, modular microgrid solutions is also expected to transform the industry. By using pre-engineered, pre-tested systems with integrated battery storage and energy management software, microgrid deployment can be shortened from years to months, reducing both cost and complexity. These off-the-shelf solutions can help scale microgrid deployments across sectors, from public infrastructure to private businesses, making them feasible for a wider range of users.
Envision a decentralized, resilient energy landscape
The electric grid of the future will likely be a decentralized network of microgrids and DERs, which can dynamically manage power loads, optimize the use of renewable energy, and reduce dependence on fossil fuels. This transformation can create an adaptable system that not only meets the energy needs of data centers and EV infrastructure, but does so sustainably and efficiently. Decentralizing energy generation – by empowering communities and facilities to produce and manage their own energy – will also support national goals for decarbonization, economic growth and energy security.
The journey to a sustainable, resilient energy infrastructure is both a necessity and an opportunity. By leveraging microgrids and other DERs, the U.S. can build a grid that is not only stronger, but smarter and capable of meeting the dynamic demands of an AI-powered, electrified future. This energy transition, while challenging, represents a pivotal moment to redefine what the electric grid can be, ensuring it supports innovation, withstands the pressures of climate change and propel us toward a clean energy era that is as resilient as it is efficient.
Jana Gerber is microgrid president for the North America region for Schneider Electric. She is responsible for growing the commercial microgrid business in North America and supporting customers on their sustainability and resilience journey.
Rohan Kelkar is the executive vice president of Schneider Electric’s global Power Products division. With more than twenty years of experience leading multinational companies, Rohan leads the division’s electricity distribution portfolio, responsible for championing innovative solutions and delivering more sustainable, efficient, connected and circular products to the market.
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