Energy Department spending $5 billion on grids to boost data centers and lower bills

The Department of Energy has unveiled $5 billion in spending on projects to upgrade grid and transmission infrastructure across the country, aiming to make more power available to data centers while also lowering electric bills. The announcement marks the latest effort by the Trump administration to assuage homeowners’ fears that the rapid development of artificial intelligence and build-out of data centers will send electricity costs even higher – a concern that has complicated Republicans’ campaigns in the midterm elections. The Department of Energy announced on Thursday that it would be committing $1.9 billion in federal funding to new grid investments as part of its Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades initiative. The agency said another $3.35 billion will be granted through recipient cost-share funding, bringing the total investment to around $5.25 billion. The funds are being spread across 31 projects in 26 states, including Wyoming, New Mexico, North Carolina, Pennsylvania, Ohio, Louisiana, Tennessee, and Massachusetts. In total, the administration anticipates that the projects will reconductor or rebuild more than 1,500 miles of transmission lines and deploy grid-enhancing technologies across nearly 21,000 miles. “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,” Energy Secretary Chris Wright said in a statement. The agency estimates that these upgrades will add at least an additional 23 gigawatts of electricity capacity to the grid. The Department of Energy did not provide an estimate for when these projects would be completed. If all 23 gigawatts of capacity are added to the grid, it would help close a crucial supply gap driven by the rapid development of AI data centers. In July, BloombergNEF forecast that 118 gigawatts’ worth of data center capacity will be online in the United States by 2030, up from just 47 gigawatts last year. For comparison, one gigawatt is estimated to be enough to power about 750,000 homes.Some of the projects listed by the administration as recipients of the funding on Thursday explicitly said they aimed to unlock additional capacity to meet data center demand. “Entergy Mississippi, LLC (EML) – Unlocking Grid Capacity for the Southeast’s Next Wave of Data Center & Industrial Growth,” the title of one project reads. “The proposed project will unlock substantial transmission system capacity, giving Northeast Alabama the power needed for large-scale data centers, industrial manufacturers, and major commercial facilities to locate in the area and benefit the region,” another description reads. In addition to providing more transmission capacity, several listed projects are meant to provide more grid resilience, protecting infrastructure from extreme weather events such as wildfires and flooding. For some, this means replacing wooden transmission line structures with steel.The Department of Energy’s funding announced on Thursday was originally allocated under the Infrastructure Investment and Jobs Act, signed into law under the Biden administration. ONLY 7% OF VOTERS SEE DATA CENTERS AS TOP-THREE ISSUE: POLLAlso known as the Bipartisan Infrastructure Law, the bill authorized the agency’s Grid Resilience and Innovation Partnerships Program to provide up to $10.5 billion in funding over five years to states, tribes, and utilities to strengthen the grid. The Trump administration later renamed the program the SPARK initiative.