A proposed energy policy called “demand flexibility” could assist the U.S. in managing rising energy demands from AI datacenters while potentially mitigating high household electricity costs and reducing the risk of blackouts. This approach involves incentivizing customers to use less electricity during peak demand periods and, in some cases, allows them to sell excess energy generated from personal solar panels.
Peak power demand in the U.S. is anticipated to increase by 20% over the next decade, driven by factors such as the growth of AI datacenters, the onshoring of manufacturing, the rise in electric vehicle usage, and the heightened need for air conditioning due to warmer summers. As states like California and Texas face greater risks of blackouts during severe weather, the average household electricity cost has risen by 9.5% this year, particularly impacting regions like Missouri where prices jumped by 38%.
The growing energy needs are also raising environmental concerns. While some policies from previous administrations have focused on expanding gas infrastructure and delaying the closure of coal plants, demand flexibility presents a solution that could add significant capacity without requiring extensive new infrastructure. A recent study from Duke University suggests that implementing demand flexibility could yield over 100GW of new capacity by 2035, equivalent to adding thousands of utility-scale wind turbines.
Ahead of new datacenter operations, proactive energy management plans might be necessary to minimize energy consumption. This could involve installing battery storage or backup generators to lessen grid strain. Regulatory changes may also be needed to streamline the process for datacenters to connect to the grid while adopting flexibility measures.
Several states, including North Carolina and Texas, are exploring or have enacted legislation related to demand flexibility. Massachusetts and Maryland are also examining options to reduce electricity bills through smart energy solutions. During the recent global energy crisis, the U.K. successfully implemented a program rewarding users for decreased energy consumption. While U.S. demand flexibility programs have largely emerged in conservative regions, there are examples in states governed by Democrats as well.
As the U.S. continues to address escalating energy needs, demand flexibility initiatives may provide a timely and scalable solution.
Source: https://www.theguardian.com/us-news/2025/oct/17/tool-lower-home-energy-bills