DOE Awards $1.9 Billion for Grid Upgrades to Ease Data Center Power Constraints

Advanced conductors and enhanced sensing technologies are expected to unlock at least 23 gigawatts of additional grid capacity.

The US Department of Energy announced $5.25 billion in total funding—comprising $1.9 billion in federal dollars and $3.35 billion in cost-share contributions—to support dozens of grid modernization projects nationwide, expected to unlock an additional 23 gigawatts of capacity.

The initiative encompasses 31 projects across 26 states and operates under the department’s SPARK (Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades) program, funded through the Grid Resilience and Innovation Partnerships (GRIP) initiative.

“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,” US Secretary of Energy Chris Wright stated.

Rather than adding new generation capacity, the projects focus on reconductoring or rebuilding over 1,500 miles of transmission lines and deploying grid-enhancing technologies—including sensors, power flow control devices, and analytical tools—across 21,000 miles of existing infrastructure.

Participants in disaster-prone regions will also work to strengthen grid resilience and reduce wildfire risks.

The agency estimates the program will improve reliability and lower electricity costs for approximately 100 million Americans.

Despite these efforts, the program may not fully address the power constraints facing data center operators amid surging AI demand. Earlier this month, Moody’s warned that the pace of data center construction exceeds the grid’s ability to add required capacity. By 2030, Moody’s projects US data center electricity consumption will reach 426 TWh, nearly double the 2025 level.

This has spurred investment in alternative energy sources, including small modular reactors, geothermal generation, and the recommissioning of aging nuclear plants. Meanwhile, chipmakers such as Nvidia are advocating for smarter, more interconnected, and more efficient data centers capable of returning capacity to the grid when needed.

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