Data centers are at the heart of the digital economy, supporting everything from cloud services to artificial intelligence. Their role in modern life is indispensable, but this comes with a hefty price: immense and ever-growing energy consumption. With electricity usage by data centers expected to triple by 2030—reaching an estimated 8% of total U.S. consumption—the strain on power grids is becoming a critical challenge that requires innovative solutions.

Addressing Data Center Energy Challenges with Regulations and Technology

The rapid increase in energy demand has not gone unnoticed. Policymakers and regulatory bodies have introduced frameworks to ensure that power grids remain reliable and sustainable while meeting this growth. In Virginia, one of the fastest-growing hubs for data centers in the world, recent policies emphasize the deployment of Grid Enhancing Technologies (GETs) to meet rising demand.

These regulations include mandates for utilities to adopt innovative tools, such as reconductoring (upgrading existing transmission lines with higher-capacity conductors) and Advanced Power Flow Control (APFC), to maximize the efficiency and capacity of the grid. The focus is on achieving these gains without the lengthy and expensive process of building new infrastructure.

The Virginia Department of Energy has been at the forefront of encouraging utilities to explore and implement GETs. Specific legislative measures include:

• House Bill 862 (HB 862): Enacted in 2024, this legislation mandates that utilities evaluate and include GETs in their Integrated Resource Plans (IRPs). Utilities must also provide detailed explanations if these technologies are not adopted, ensuring that efficiency and grid optimization are prioritized (Virginia General Assembly – HB 862).
• House Bill 116 (HB 116): Proposed in 2024, this bill aims to align tax exemptions for data centers with stringent energy efficiency and renewable energy usage requirements.
• Joint Legislative Audit and Review Commission (JLARC) Study: Commissioned in 2023, this study evaluates the impact of data centers on Virginia’s energy infrastructure, guiding policy decisions to ensure sustainable growth and grid reliability.

These policies not only alleviate the immediate challenges posed by rising energy demand but also lay the foundation for a more resilient, sustainable grid that supports clean energy transitions and economic growth.

What is Advanced Power Flow Control (APFC)?

As data centers drive growing energy demand, utilities are turning to innovative technologies like SmartValve™ to address grid challenges. SmartValve is an advanced power flow control device that uses modular power electronics to actively manage electricity flows on transmission lines.

By dynamically adjusting reactance, SmartValve helps balance power distribution, reducing congestion and improving the efficiency of existing grid infrastructure. This approach minimizes reliance on traditional grid expansions, which can be costly and time-intensive. Instead, SmartValve allows utilities to optimize their systems in real time, ensuring reliable power delivery even during periods of high demand.

SmartValve also supports the transition to cleaner energy sources by accommodating the variability of renewable generation, such as wind and solar. By enabling a more flexible and adaptive grid, technologies like SmartValve™ are helping utilities meet the complex demands of modern energy systems, particularly in regions experiencing rapid data center growth.

How SmartValve Supports Data Centers

Data centers demand a power supply that is not only consistent but also highly efficient. SmartValve addresses these demands by providing several key benefits:

• Maximizing Existing Infrastructure: SmartValve ensures that electricity is directed to where it’s most needed, reducing congestion and enabling utilities to extract maximum value from current transmission assets. This minimizes the reliance on costly and time-consuming infrastructure expansion.
• Enhancing Grid Stability: By balancing power flows and mitigating bottlenecks, SmartValve reduces the risk of overloads and outages, providing the reliability that data centers depend on for uninterrupted operations.
• Facilitating Renewable Energy Goals: Many data centers are transitioning to renewable energy to meet sustainability targets. SmartValve helps manage the inherent variability of renewable sources, such as wind and solar, ensuring that the grid remains stable even as the energy mix shifts toward greener alternatives.

Regulatory Alignment for a Resilient Future

Virginia’s policies exemplify how regulatory frameworks can drive the adoption of advanced technologies to modernize power grids. These regulations are not just about meeting current energy demands; they aim to future-proof the grid by prioritizing resilience, efficiency, and sustainability. By encouraging the deployment of APFC and other GETs, policymakers are enabling utilities to navigate the complex challenges posed by the rapid expansion of energy-intensive industries like data centers.

Virginia’s approach includes clear incentives for innovation, streamlined approval processes for GETs projects, and a focus on aligning grid enhancements with broader environmental and economic goals. This multi-faceted strategy serves as a model for other regions facing similar challenges, demonstrating how proactive policies can accelerate the transition to a more capable and sustainable grid.

The Road Ahead

As data centers continue to proliferate and their energy demands intensify, GETs like APFC will play a critical role in bridging the gap between energy supply and demand. By optimizing power flow, alleviating grid congestion, and facilitating renewable energy integration, APFC offers a scalable and sustainable solution to meet the evolving needs of data centers. Coupled with forward-thinking regulations, technologies like APFC provide a roadmap for building a resilient grid that can support both the digital revolution and the clean energy transition.