The Better Backup Plan for America’s Power Grid

That’s not a hypothetical. It’s the backup plan much of the country is already using. It’s a good example of old, outdated technology standing in for something better we already have.

Take PJM, the grid operator serving all or part of 13 states and Washington, D.C. Demand spikes during a heat wave, a cold snap, or just an ordinary hot summer afternoon. Everyone reaches for electricity at the same time. Air conditioners run harder. Power plants can experience outages. Demand pushes transmission lines closer to their limits.

A lot of that added strain is coming from data centers. Cloud services, streaming, and AI tools take an enormous, and growing, amount of electricity to run. Federal regulators want to manage that growth without destabilizing the grid. Their solution: let data centers and other large power customers lean on their own backup generators during periods of peak stress. This buys time before the grid has to declare a full emergency. The logic is simple: a data center making its own power for a few hours means more electricity for everyone else.

The problem is what “backup power” has historically meant: diesel.

Utilities built diesel generators for occasional emergencies, not as an everyday source of grid power. Historically, diesel has been the default because it can respond fast. But responding fast comes with a cost. Diesel exhaust releases nitrogen oxides, fine particulates, carbon monoxide, and sulfur dioxide, pollutants that harm respiratory and cardiovascular health. The International Agency for Research on Cancer, part of the World Health Organization, classifies diesel exhaust as a Group 1 human carcinogen. That’s the same category as tobacco smoke. And developers disproportionately site that power infrastructure in communities already dealing with highways, industrial facilities, and other sources of pollution.

Then there’s the cost. Diesel backup generators often run only a handful of hours a year, maybe during a heat wave or winter storm. The rest of the year, they sit idle. But utilities still have to build, fuel, maintain, and repair them. You’re effectively paying for a power plant that spends nearly all its life idle, just in case a worst-case moment arrives. And when that moment arrives and fuel prices spike, that cost doesn’t disappear. It shows up somewhere, usually on customers’ bills. It’s a backup plan you pay for constantly, and one that only earns its keep rarely.

Battery energy storage systems work on the opposite principle. Instead of sitting idle, batteries charge up when electricity is cheap and abundant, like midday when solar output is high. Then they discharge that stored power back to the grid during the evening peak or an emergency. Rather than an idle asset, a battery is an active resource. It earns its keep on a near-daily basis, while still being there when the grid needs it most.

California is already showing what that looks like at scale. According to the California Energy Commission, the state now has more installed battery storage capacity than any other jurisdiction on the planet except China. California also leads all U.S. states, with Texas close behind. Per CAISO’s 2024 Special Report on Battery Storage, California’s battery capacity grew fast. It went from about 500 megawatts in 2020 to roughly 13,000 megawatts by December 2024. That’s a roughly 26-fold increase in four years. During 2024’s highest-stress hours, the late afternoon and early evening peak, batteries supplied an average of 8.6% of the CAISO grid’s electricity. That’s power showing up exactly when the grid needs it, without firing up a single diesel generator.

Storage isn’t a silver bullet. The grid still needs more transmission, smarter demand management, and new sources of affordable power. And the large data centers driving so much of this new demand should help pay for the infrastructure their growth requires.

Picture the choice during the next heat wave. Pay for more diesel. Finance another gas plant that runs just a few hours a year. Or use clean electricity that’s already sitting in storage, ready to go. That’s not a hard call. The goal isn’t just keeping data centers online. It’s keeping the whole grid reliable, without asking families to pay more or breathe more pollution to make that happen.

As electricity demand keeps climbing, the backup plan doesn’t have to mean stockpiling more fuel to burn. We’ve already seen what a better one looks like.