Datacenters are hoarding grid power just in case, says Uptime Institute

Warning that over-reserved capacity is blocking new connections

Datacenters are preventing other energy users from connecting to the grid by reserving far more power than they need, according to a new Uptime Institute report shared with The Register.

The advisory body found that datacenter power use remains largely constant, with major demand changes typically coming from business expansion. Operators routinely reserve excess capacity for potential future growth, blocking other users from that allocation even though it sits unused.

The problem stems from how grids operate: Grid operators can't expand networks without lengthy regulatory approval, and capacity is allocated strictly on a first come first served basis. This prompts developers to reserve power for projects that may never be built, while datacenter operators apply for more than they need to accommodate future growth and planning uncertainty.

The issue intensifies as manufacturing and transportation electrify. AI datacenters compound the problem differently, as unlike traditional facilities with steady loads, AI training creates frequent, significant power fluctuations.

Governments are taking notice and the some, such as the UK and US, are keen to promote new datacenter builds in order to serve the burgeoning demand for AI training and deployment.

In the UK, the government last month delivered a package of reforms under the heading of "Delivering AI Growth Zones". These include measures to remove speculative requests in the grid connection queue - applications related to building projects that never got off the ground but weren't cancelled.

The government confirmed last week that household energy bills will rise to help fund expansion of the grid, including an extra £108 ($144) in network charges on bills by 2031.

In the US, the Secretary of Energy ordered rules to limit the time taken to review connection decisions to 60 days, and to deter speculative projects by imposing deposits and withdrawal penalties on applications. The new rules gives priority to applicants that agree for their energy load to be curtailable, meaning it can be reduced or temporarily shut off if it is necessary to stabilize the grid.

Uptime notes flexible connection agreements can accelerate access if users accept demand control during stress periods and meet technical requirements, like real-time monitoring by the grid operator.

The report also warns that datacenters can lose 10 percent or more of their uninterruptible power supply (UPS) capacity because of stranded power: electrical infrastructure that has been built but is not actually being used by the IT equipment or its supporting infrastructure.

Uptime concludes that with increasing stress on power grids globally, datacenter firms should aim to make efficient use of the grid power they have reserved.

It recommends datacenter firms engage grid operators to minimize stress, and consider flexible agreements to expedite access in congested areas. ®