Google has entered into demand-response agreements with Indiana Michigan Power and the Tennessee Valley Authority to manage the significant energy demands of its artificial intelligence (AI) data centers. These collaborations mark Google's initial formal engagement in such programs, typically used by heavy industries, to help balance AI's burgeoning energy needs with grid stability during peak electricity demand periods.
In 2024, Google's electricity consumption for data centers increased by 27%, largely due to the intensified use of AI. The company is simultaneously bolstering its commitment to clean energy, having added 2.5 gigawatts of new capacity in 2024 and maintaining its goal of 24/7 carbon-free energy by 2030. These demand-response agreements enable large facilities like Google's data centers to temporarily reduce their power usage, a critical mechanism for preventing blackouts and easing cost pressures on other consumers. The International Energy Agency (IEA) projects that AI will be the primary driver of increased electricity demand, with AI-optimized data centers potentially quadrupling their consumption by 2030. In the United States, data centers are anticipated to account for nearly half of the growth in electricity demand between now and 2030. These agreements represent a strategic adaptation to an evolving energy landscape where AI's immense power requirements are reshaping grid dynamics. Google's prior successful demonstration with the Omaha Public Power District in 2024, where it reduced power demand associated with machine learning workloads during grid stress events, provides a foundation for these new, broader agreements.