Business News | Flexible Grid Connections Can Cut AI Data Centre Power Wait to 2-4 Years from 5-10 Years: BCG

New Delhi [India], October 22 (ANI): Data centres supporting artificial intelligence (AI) could reduce their electricity connection waiting time from 5-10 years or more to 2-4 years by accepting flexible grid connections and using their own power generation and storage systems, according to a report by Boston Consulting Group (BCG).

“Flexible access can reduce time to power from 5-10+ years to 2-4 years by lowering the need for (major) grid reinforcement,” the report said.

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The report noted that this approach could help data centres become operational earlier while reducing pressure on electricity grids and limiting additional costs for other power consumers. The analysis focuses on five Northwest European markets — the UK, Germany, France, Belgium and the Netherlands — over the 2030-2035 investment period.

BCG said power availability has become a major constraint on data centre expansion, with connection queues in several markets stretching for years. Global data centre power demand is projected to reach around 210 gigawatts by 2030, compared with 84 gigawatts in 2025, according to the report's estimates.

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Under the proposed approach, data centres could accept non-firm electricity connections, under which power supply may be reduced during periods of grid congestion, instead of waiting for a guaranteed connection. They could use on-site generation, batteries and flexible computing workloads to maintain operations during such periods.

The report said connecting earlier could unlock significant financial benefits. For a modelled 150-megawatt AI inference data centre in Northwest Europe, connecting three years earlier could generate an estimated USD 1.28 billion in additional profits, before accounting for the costs of on-site power assets.

However, the approach also involves trade-offs. BCG estimated that an off-grid setup could increase annual power supply costs by 70-230 per cent compared with a firm grid connection, depending on how the cost of power assets is accounted for. The report said such arrangements may be useful where flexible grid connections are unavailable or would require substantial additional investment.

BCG also said grid-positive data centres could help spread fixed electricity network costs across a larger base of consumption and reduce the need for additional power generation and grid infrastructure.

"Whether a data center burdens or strengthens the system depends on how and where it connects, and how it runs once it is online," the report said.

The report called for governments to develop national data centre strategies, guide projects towards locations with available grid capacity and speed up approvals for on-site power assets. It also recommended that grid operators make flexible connections a standard option rather than an exception.

BCG said faster connections would require changes to how data centres are located, connected and operated, alongside clear rules for on-site power generation. (ANI)

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