How Electrical Grid Changes Are Impacting Operations—And What You Can Do About It

The North American electrical grid is in a state of significant change. The rise of data centers with AI computing power is doubling down on electrical demand at the grid level, while electrification continues to increase demand at the distribution and consumer level. Because of these increased pressures on the grid, it’s essential to understand the changing risks and the corresponding impact on plant operations and expansion plans. Improved monitoring, harmonic correction, and backup or cogeneration systems can all be used to improve plant resiliency against electrical downtime. Let’s break down these grid shifts, how they impact your operations, and actionable steps you can take today.  

What’s Changing on the Electrical Grid?  

Surging Demand  

One of the biggest drivers of increased demand is the explosive growth of data centers, particularly those with AI computing power. These facilities consume significant amounts of electricity, and projections indicate that, by 2028, data centers could account for as much as 12% of the nation’s electricity use (you can view the 2024 United States Data Center Energy Usage Report here).  

The momentum behind electrification is also undeniable: from electric vehicles (EVs) and electrical appliances at the residential level to hundreds of EV chargers for fleet vehicle programs in the commercial sector, the strains on the grid are happening at each level of generation, distribution, and consumption.  

These combine to create a scenario where the increased consumption grabs the available capacity of the system leading to less available margin and increased stress on existing infrastructures.  

Changing Energy Sources  

At the same time, the way we produce electricity is rapidly changing. Investments in renewable energy sources like solar, wind, and hydroelectric power have ramped up, as well as collaborations on new nuclear technologies. While these clean sources are essential for reducing carbon emissions, they present new challenges for grid operators. Unlike traditional power plants, renewables like wind and solar don’t provide a constant daily output and provide less flexibility for changes in demand. This variability can make grid balancing more complex, especially during extreme weather events. 

Government funding is also injecting additional resources and regulatory expectations to meet these growing challenges. These actions are meant to pave the way for a more secure, reliable, and robust grid while continuing to target a reduction in total carbon footprint. Similarly, the tech giants like Google, Meta, AWS, and Microsoft are injecting significant funds into the generation and transmission market to aid in bringing new electrical capacity online. 

The combination of growing power needs, a rapidly evolving energy mix, and heightened activity in the electrical generation market creates a rugged landscape that businesses must now navigate. In this environment, understanding how these changes affect both grid reliability and your facility’s ability to grow and compete is more important than ever.

Why Do These Grid Challenges Matter for Your Business?  

As grid conditions change, your plant’s day-to-day operations—and long-term planning—are affected in several ways:  

• Reliability Risks: Increased grid stress means an increasing risk of outages, sags, and other power quality events.  
• Expansion Constraints: With more competition for the limited available capacity, expanding your operations could become more complicated or expensive.  
• Cost Volatility: High demand in local grids may result in changes to energy pricing models and potential surcharge risks on billing.  

What Power Quality Issues Should You Watch Out For?  

There’s also a flip side to this coin: just as the larger grid can affect your business, your operations can impact the larger grid. As a ‘grid citizen’, issues from your operations, such as harmonics, poor power factor, and erratic demands not only add to the risk of penalties from utilities—they also threaten overall grid stability. 

• Harmonics caused by non-linear loads like variable frequency drives (VFDs), power supplies, UPS units, LED lights, and more. This electrical noise can be transmitted back up to the grid where the effects may impact the operation of the utility or other customers. 
• Power Factor is the relationship between the real power (work done) and the apparent power (delivered by the utility). In industrial electrical systems, induction motors are a common source of poor power factor. When a plant operates with poor power factor, the utility needs to commit additional infrastructure to the service relative to the actual work being done and billing penalties may result. 
• Erratic Demands can be understood in the context of the consistency of the plant’s electrical needs relative to the service capacity. Some plants have a very steady load that is consistent throughout the day, week, and year. Alternatively, some plants have large loads that start and stop frequently, or a system that is only online periodically. In either case, the utility needs to commit the appropriate infrastructure to serve the peak electrical needs and commonly charge billing penalties based on demand due to the impact to the operation of the utility and potential impact to other customers. Managing the demand profile of the facility can reduce these penalties and reduce the overall electrical costs of operation. 

How Can You Respond? Actionable Steps to Build Resilience  

The good news is that there are concrete steps your business can take to reduce risk and grow towards new opportunities. Let’s see what those next steps look like.  

Strengthen Your Utility Relationship  

Maintaining a strong relationship with your utility provider can be a game-changer for your business. Proactively engaging with your account manager helps you stay informed about local grid capacity, planned upgrades, and changing rate structures that could impact your costs or operations. By understanding how your utility bills are calculated and what programs or incentives are available, you can identify opportunities for cost savings. Early and continuous communication also helps you evaluate expansion plans or requests for increased capacity, ensuring your company isn’t caught off guard by unforeseen constraints or delays as the grid evolves.  

Modernize Your Plant’s Electrical System  

Upgrading and optimizing your facility’s electrical systems is critical to building resilience against power quality issues. Start by assessing your current infrastructure to identify irregularities and trends over time. By installing harmonic filters, power factor correction devices, and implementing load management best practices, your plant can operate more efficiently, reduce operational costs, and support a more stable, reliable power system for everyone.  

Don’t overlook the importance of power monitoring to get a real-time look at demand, harmonics, power factor, and other power quality measures. A forward-thinking approach to your plant’s electrical infrastructure will help you positively respond to changing grid conditions and operational needs.   

Plan for Backup and Generation  

In business, delivering targeted value isn’t a goal that can take a day off. In some cases, those business goals and the risks described above are not compatible so having backup power options is no longer just an extra precaution—it’s a necessity. Investing in uninterruptible power supplies (UPS) ensures critical systems remain operational during short-term interruptions, while backup generators can keep your facility running if there’s a longer outage. For some businesses, installing co-generation systems can deliver even greater resilience and allow an avenue to further manage operational costs.  

At Interstates, we help clients navigate these challenges as a partner, from strategic planning to hands-on technical services. Whether you’re looking to expand, reduce downtime, or just understand your risk, our experts are here to help you and your business grow.  

Ready to future-proof your operations? Get in touch and let’s have a conversation!