Data Centers Must Bring Own Power to Avoid Fossil Fuel Trap

⚡ AI Executive Summary

Utilities are responding to surging artificial intelligence-driven data center demand by proposing new fossil fuel power plants, but research indicates this approach is economically and operationally inefficient. A cleaner alternative—termed Bring Your Own Power (BYOP)—enables large data center customers to deploy their own renewable generation, storage, and flexibility resources co-located with their facilities, reducing both system costs and interconnection timelines. For grid operators and regulators, the BYOP model presents a fundamental shift in how to manage demand growth. Rather than treating data centers as passive loads requiring centralized firm generation, the framework positions them as active grid participants capable of absorbing supply-side variability through demand flexibility. This transforms the interconnection problem from a capacity-shortage issue into one of cost allocation and rate design. By expediting interconnections for data centers that commit to clean energy and demand response participation, utilities can defer or avoid costly transmission upgrades while insulating customers from fuel price volatility—a strategic advantage given geopolitical instability and weather-driven supply shocks.