Economy 4 min read By Alice Ashford
US Energy Department to spend $1.9bn squeezing more power from ageing grid
The Energy Department will fund 31 projects across 26 states to add more than 23 gigawatts of capacity, as AI data centres drive up demand and electricity bills.
The US Energy Department is set to commit almost $2 billion to extracting more capacity from the country's stressed and ageing electricity grid, as the Trump administration tries to head off blackouts driven by the power demands of artificial intelligence.
The money will fund 31 projects across 26 states that officials expect to deliver more than 23 gigawatts of additional capacity — enough to supply about 16 million homes. The department said the schemes will deploy sensors and other devices that measure real-time weather conditions to keep transmission safe, or redirect power away from congested and overloaded routes.
Officials estimate the upgrades could improve reliability and lower electricity costs for roughly 100 million Americans. Energy Secretary Chris Wright was due to announce the grant programme in Allentown, Pennsylvania, with the Associated Press obtaining details before public release.
«These investments will get more out of the infrastructure we already have, move more electricity across the grid, and help deliver affordable, reliable and secure power that will fuel American prosperity for decades to come,» Wright said in a statement.
The announcement lands amid warnings that AI's appetite for electricity is threatening to overwhelm US power supplies, as large new data centres come online faster than new power plants can be built. It also follows electricity bills rising faster than inflation in many parts of the country, with demand from data centres blamed in some areas.
Growing opposition to data centres in communities across the US has complicated the plans of the world's largest technology companies and reshaped the midterm election landscape. President Donald Trump has continued to defend the facilities even as politicians from both major parties criticise them and many communities try to block them. Trump, a Republican, said last month that US communities without data centres will «end up being backwards and poor».
Congress and some states are meanwhile pressing regulators to require utilities to adopt technology and new components that make grids more efficient and better able to serve new customers without additional power sources. Critics of utilities argue that companies — which have seen rising profits and share prices during the data centre-fuelled energy boom — tend to avoid such efficiencies because they earn more from building new power plants and grid infrastructure that are more expensive and take longer to complete.
The projects announced on Thursday will involve component enhancements on more than 1,500 miles of transmission lines and technological improvements across nearly 21,000 miles, the department said. Officials said projects were prioritised on the basis that they can be put into operation quickly.
Funding comes from the bipartisan infrastructure law enacted by Congress under then-President Joe Biden, a Democrat. The government's $1.9 billion will be matched by $3.35 billion in cost-share funding from recipients, the Energy Department said.
Trump has vowed to «unleash» the nation's energy sector in his second term, aiming to drive up record domestic oil and gas production, strip away pollution restrictions on power plants and keep expensive coal-fired plants operating past their retirement dates. His administration has pushed to help technology giants build and connect data centres to power plants and high-voltage power lines, and to convert Cold War-era uranium enrichment plants into data centre and power plant complexes.
Trump's Environmental Protection Agency this summer issued a plan that would make it harder for the public to learn about and comment on proposed AI data centres.
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