Google will pay people to use less electricity so its data centers can use more

Google has an answer to some of the electricity supply problems that data center construction is causing: It has signed an agreement with energy supplier Voltus to build what it’s calling a 1-gigawatt virtual power plant, expanding on an earlier 100 megawatt deal the two signed earlier this year.

This power plant is virtual in the sense that it doesn’t generate any electricity itself, but aggregates so-called flexible grid capacity into one central resource that can be deployed at times of peak demand. This flexible capacity can be in the form of batteries or of load-shedding: asking others to temporarily stop consuming electricity by shutting down industrial processes or adjusting tens of thousands of smart thermostats at once, effectively moving their electricity usage to a time when there is less demand.

Voltus operates by offering incentives to companies to reduce their power consumption temporarily, and also offers inducements to electricity resellers that they can pass on to their customers.

The Google-Voltus deal will serve the PJM grid region, the largest power grid in the US supplying 67 million people across 13 states and Washington DC.

It’s a PR coup for Google, as increased demand for electricity for its new data centers and those of other hyperscalers is pushing up prices. The additional load is also straining local infrastructure in some areas, increasing utilities’ capital costs and further increasing prices for existing electricity consumers.