AI and the Grid: A Planning Challenge for North America

The grid is facing one of its most complex operating environments in history, with the rapid growth of artificial intelligence (AI) and other trends driving large-scale load growth.

The North American Electric Reliability Corporation (NERC) projected 224 GW of summer peak demand growth over the next decade, identifying data centers and other large-load customers as key drivers of that increase.

## Interconnection Queues: An Economic Issue

Utilities and grid operators are processing growing volumes of requests from generation developers, storage providers, data center operators, and industrial customers seeking access to the grid. At the same time, transmission systems are often being asked to support growth levels that were never anticipated when much of the infrastructure was originally planned and built.

| | 2023 | 2028 | | --- | --- | --- | | Data Center Electricity Consumption (TWh) | 176 | 325-580 |

The challenge for planners is that these decisions often must be made years before new demand materializes. A single data center campus can add hundreds of megawatts of load in one location. Several projects arriving within the same region can fundamentally alter infrastructure priorities and investment requirements.

## The Real Challenge: Uncertainty

Much of the public discussion about AI and electricity focuses on consumption. Data centers require power. AI requires more data centers. Therefore, utilities must build more infrastructure. While true, that explanation oversimplifies the challenge facing planners.

The uncertainty surrounding the timing, location, and concentration of demand is the most difficult question for utilities. Traditional planning approaches were designed around forecasting a relatively predictable future and building infrastructure accordingly. Today's environment is different. Utilities increasingly need to evaluate multiple plausible futures simultaneously as AI, electrification, manufacturing growth, policy changes, and market forces reshape demand.

## Planning at the Speed of Change

This reality is elevating planning from an operational function to a strategic capability. Utilities are being asked to process growing volumes of interconnection requests, assess more complex grid impacts, satisfy evolving regulatory requirements, and support economic growth, all while maintaining reliability and affordability.

Success will depend on the ability to move from reactive studies to proactive, data-driven planning. By combining advanced analytics, digital workflows, high-performance computing, and AI-enabled planning tools, utilities can evaluate more scenarios, identify constraints earlier, and prioritize investments with greater confidence.

Flexibility also has an important role to play. Beyond traditional infrastructure expansion, utilities are exploring approaches such as phased interconnection strategies, demand response programs, flexible service agreements, and large-customer load management. These options do not eliminate the need for transmission investment or grid modernization, but they can provide additional pathways for managing uncertainty and supporting growth.

## Grid Readiness Will Define the Next Decade

The AI economy will undoubtedly create significant opportunities for innovation, electrification, and economic growth. Utilities will play a central role in enabling that future. But the defining challenge is not simply generating more electricity. It is ensuring that planning processes, transmission infrastructure, and interconnection frameworks can keep pace with the speed of change. As AI, hyperscale data centers, advanced manufacturing, and electrification continue to reshape demand, grid readiness will increasingly determine where investment occurs and how quickly it can be realized.