A sizzling summer is breaking power consumption records across the country, offering a potential preview of the challenges facing America’s artificial intelligence boom in the era of climate change.
Three grids — serving the mid-Atlantic, the Great Plains and Texas — have seen power demand surge to historical highs during extreme heat. Prices soared last month in the PJM Interconnection, while last week, the Southwest Power Pool had to implement emergency measures across parts of the Great Plains. Their struggles stood in stark contrast to the Electric Reliability Council of Texas, which managed to ride out a mid-July heat wave that shattered its demand record without a jump in prices or any emergency actions.
The big difference: ERCOT has lots of solar and batteries; PJM and SPP do not.
Two of those grids — PJM and Texas — are at the center of the country’s data center boom. Data centers are also a small, but growing percentage of power consumption in the Southwest Power Pool.
“We have these large loads coming online,” said Abby Lestina, an analyst at the power tracking firm GridStatus.io. “The heat is exposing it more.”
America’s electric system is at a crossroads. Climate-induced heat waves are baking the country, sending electricity demand higher as people seek refuge in the safety of their air conditioning. At the same time, energy-hungry data centers are placing new demand on the grid as technology companies rush to develop AI.
The result is a summer surge in power consumption — and grid strain — at a politically fraught moment in Washington, where voter concern over data centers’ impact on electricity prices is dogging both Democrats and Republicans alike.
“In places like ERCOT and particularly in places like PJM, data centers are not going to be an insignificant driver of demand and growth,” said Joshua Rhodes, a researcher who studies the power sector at the University of Texas at Austin. “And I don’t think we’ve really seen the major ramp up of it yet. I think it’s coming, but I think we’re definitely seeing the beginnings of it.”
The Trump administration has seized on the surging electricity demand as evidence that the country needs to embrace fossil fuels and nuclear power. After PJM nearly broke its demand record, the Energy Department posted a tweet claiming the region’s solar fleet failed because it didn’t deliver power after dark when demand was high. That prompted backlash from clean energy advocates. One headline in Canary Media, the clean energy publication, captured the sentiment. It read, “Duh, solar power doesn’t work at night.”
DOE did not respond to a request for comment.
Clean energy advocates are quick to point to Texas as evidence that the opposite is true. Solar was generating roughly a third of the power in ERCOT when demand peaked at 6 p.m. on July 22. Real time prices at the time were roughly $29 per MWh, a far cry from the pricing of more than $2,000 per megawatt-hours PJM observed around its peak on July 2.
But the reality is more complicated than either political narrative lets on. Renewables and fossil fuels both played a key role in keeping the lights on.
Summer peaks
PJM was the first region this summer to see extreme heat send power demand to near record levels. The grid operator said power consumption last month would have broken a 20-year-old record if not for conservation programs that throttled demand.
PJM’s grid spans 13 states, including Virginia, which is home to the world’s largest concentration of data centers. Executives at the state’s largest utility, Dominion Energy, told investors on Friday that nine of its top 10 days for power consumption had come this year. The company has recorded eight of its highest summer peaks just over the last two months.
A heat dome in the Great Plains, meanwhile, pushed temperatures in Kansas City and Oklahoma City north of 100 degrees last week.
SPP saw energy demand reach nearly 58 gigawatts on July 27, according to preliminary data from the U.S. Energy Information Administration. That is the highest demand level for SPP recorded in EIA’s preliminary power data. SPP did not respond to a request for comment.
A few days earlier, on July 22, ERCOT saw the largest leap in demand during a heat wave that sent temperatures in Dallas and Houston above 100 degrees. Demand reached 91 GW, shattering the previous record set in August of 2024 by 5.5 GW.
That is an enormous figure. Consider this as a comparison: The all-time peak of the municipal utility serving much of metropolitan Los Angeles — the country’s second-largest metro area — is 6.5 GW.
While data centers are a big driver of those peaks, they are hardly the only one, Rhodes said. In Texas, other factors like population growth and oil and gas development are also contributors.
Power prices
How each grid handles those peaks varies, based on its energy mix.
Wind, solar and batteries account for 13 percent of installed power plant capacity in PJM, according to EIA data. That ranks PJM tied for last, alongside the New York Independent System Operator, among the country’s seven wholesale power markets.
In other words, wind and solar were always going to play a small role in keeping the power flowing in PJM — even if the sun was still up when demand was high.
The story in Texas is flipped. Wind, solar and batteries account for 50 percent of installed power plant capacity in ERCOT, which ranks second to California’s grid operator — and only by a hair (51 percent).
That helps explain why wind and solar ranked as ERCOT’s second- and third-largest sources of power generation through the first six months of the year, and why power prices were so low during the day.
Even so, natural gas was key to getting Texas through the heat wave. Over the course of 24 hours on July 22, gas accounted for 53 percent of ERCOT’s power generation. That was followed by solar at 19 percent, coal at 14 percent and wind at 7 percent.
The highest prices observed in ERCOT on July 22 came around 10:30 p.m., when they briefly hit $368 per MWh. That also coincided with the end of the evening discharge from ERCOT’s considerable fleet of batteries, whose power kept prices hovering in the $100-200 per MWh range during the early evening after the sun went down. ERCOT has 17,000 megawatts of battery capacity, while PJM has just 655 MW, according to EIA figures.
If PJM and ERCOT represent opposite ends of the spectrum, SPP is in the middle. Wind, solar and batteries represent 39 percent of its installed capacity, but nearly all of that is wind. Solar and batteries make up a combined 5 percent of SPP’s power plant capacity.
As a result, prices in SPP settled somewhere in the middle, topping out around $700 per MWh on July 27. The Great Plains grid operator also implemented emergency protocols for two hours in its western service territory on July 24, when it had dispatched all available power plants and was forced to resort to conservation measures to keep the lights on.
The struggles of PJM and SPP make the relative ease with which ERCOT navigated the heat even more notable, Lestina said.
“I think that’s a huge story that’s kind of being glossed over,” she said. “Where were prices? Prices were not talked about, and that’s the big story within itself. We’re hitting these load highs in the summer and the grid was well supplied.”
Some of that is due to the nature of power consumption in Texas, said Patrick Milligan, an energy analyst at the consulting firm ICF. The state has about 4 GW in cryptomining load. Those facilities have an economic incentive to voluntarily ramp down power consumption when prices rise.
But solar and batteries are also part of the equation.
“Despite the record peak, power prices remained modest at $100-200/MWh for a couple of hours on consecutive peak and near-peak days. This is because of the growth of solar and storage, which have continued to be built at large scale in the ERCOT region,” he wrote in an email.
