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‘AI Fast Lanes’ for an Electricity System to Meet the AI Moment

Home / Work That Matters / Energy & Innovation / ‘AI Fast Lanes’ For An Electricity System To Meet The AI Moment

By: Costa Samaras

Targeted policies to create “AI Fast Lanes” will ensure that the development of new AI and data center infrastructure does not increase costs for consumers, impact the environment, and exacerbate existing energy burdens.

Why it matters: Absent policy action, consumers and the environment could bear the brunt of adding new power generation to the nation’s electricity grid.

Catch up quick: One of the biggest bottlenecks in many regions of the U.S. in adding capacity to the electricity grid is the number of studies that must be completed before connecting. But the Electric Reliability Council of Texas (ERCOT) uses a “connect and manage” interconnection process that results in faster interconnections. A similar nationwide fast lane for connecting to the grid can address the bottleneck felt across the U.S.

What we’re doing: A new “Smart AI Fast Lanes” framework would expand the spirit of the Texas “connect and manage” approach nationwide for data centers and clean energy. This framework also includes investment and innovation prizes to speed up the interconnection process, ensure grid reliability, and lower costs for communities.

Data center providers would work with the Department of Energy, the Foundation for Energy Security and Innovation (FESI), the Department of Commerce, National Laboratories, state energy offices, utilities, and the Department of Defense to speed up interconnection queues, spur innovation in efficiency, and re-invest in infrastructure, to increase energy security and lower costs. 

  • FESI is an independent, nonprofit, agency-related foundation that was created by Congress to help the Department of Energy achieve its mission and accelerate the development and commercialization of critical energy technologies.
  • FESI leading a Smart AI Fast Lanes initiative could be a force multiplier to enable rapid deployment of clean AI compute capabilities that are good for communities, companies, and national security.

How it works: For any proposed data center investment of more than 250 megawatts, companies could apply to work with FESI. 

  • Successful applications would leverage public, private, and philanthropic funds and technical assistance.
  • Projects would be required to increase clean energy supplies, achieve world-leading data center energy efficiency, invest in transmission and distribution infrastructure, and/or deploy virtual power plants for grid flexibility.

Policy takeaways: Recommendations to implement the Smart AI Fast Lane initiative include:

  • Fees to speed connection: New large AI data center loads would pay a fee to connect to the grid without first completing lengthy pre-connection cost studies. Those payments would go into a fund, managed and overseen by FESI, that would be used to cover any infrastructure costs incurred by regional grids for the first three years after project completion.
  • ‘Bring your own power’ prize: FESI could award prize funding for clean electricity generated locally that covers twice as much as the data center uses annually.
  • Efficiency innovation awards: FESI could award prizes for meeting efficiency targets of how much AI computing work we get for the amount of energy and water used. This would create incentives for both innovation and transparency in efficiency.
  • Award transmission upgrades: Create prizes for deployment of reconductoring, transmission, or grid enhancing technologies to increase capacity, and prizes to upgrade distribution infrastructure beyond the needs for the project. This will reduce future electricity rate cases, which will keep electricity costs affordable.
  • Flexibility prizes: Prizes that reward flexibility and end-use efficiency investments, including for:
    • Data centers that demonstrate best-in-class flexibility through smart controls and operational improvements.
    • Utilities hosting data centers that reduce summer and winter peak loads in the local service territory.
    • Utilities that meet home weatherization targets and deploy virtual power plants.

The bottom line: The U.S. is facing the risk of electricity demand outstripping supplies in many parts of the country, which would be severely detrimental to people’s lives, to the economy, to the environment, and to national security. “Smart AI Fast Lanes” and FESI-run prizes will enable U.S. competitiveness in AI, keep energy costs affordable, reduce pollution, and prepare the country for new opportunities.

Go deeper: Read the policy brief “Speed Grid Connection Using ‘Smart AI Fast Lanes’ and Competitive Prizes” and the Guest Essay “AI’s energy impact is still small—but how we handle it is huge”.

More on Meeting AI Energy Demand

AI and its Growing Energy Demand

AI-Driven Discoveries to Catalyze Energy Storage

Sustaining AI Growth Needs Energy and Carbon Efficient Computing Infrastructure

Accelerating Safe Microreactors: AI and Knowledge Graphs for Regulatory Reuse and Human-System Integration

Building American Strength and Resiliency in Critical Minerals for Energy Storage

Building the Robust Transmission Capacity Necessary to Power America

How AI Can Unlock Fusion Energy

Unlocking Energy Efficient AI

Open Source AI May Reduce Energy Demands

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