Google Adds 1,070 MW to PJM Virtual Power Plant as AI Data Centers Strain the Grid

Google is trying to solve its power problem two ways: by buying more supply and by paying other people to use less.

On Thursday, Oct. 22, Google and Voltus announced a 1,070 MW addition to a 100 MW virtual power plant agreement the two signed in June. The combined project covers the PJM Interconnection, the largest U.S. wholesale power market, which oversees the grid in 13 states and the District of Columbia.

How the Voltus deal works

A virtual power plant generates nothing. Voltus aggregates batteries, smart thermostats, on-site generation, industrial process adjustments and other flexible assets from residential, commercial and industrial customers. When the grid is strained, those customers cut usage and Voltus offers the freed-up capacity into PJM's market. Google pays for the arrangement. Participants get paid.

Voltus spokesperson Sarah Spitz said the company expects to ramp to full capacity over three to four years and run the project under contract with Google through 2040. Voltus says it has about 8.5 GW of distributed assets under contract across North America and wants 20 GW by the end of the decade. It raised $225 million in its latest funding round.

"Expanding our initial commitment tenfold," said Ellen Zuckerman, Google's head of energy market development for North and South America, as part of a statement saying distributed resources can manage the grid "while keeping energy affordable." She called the project one of the largest known distributed capacity portfolios deployed by a hyperscaler.

Why PJM matters

PJM has recently fallen short of its reliability margins despite skyrocketing capacity auction prices, due in large part to rising data center demand. BigGo Finance's tally of auction results shows capacity prices jumping from $28.92 per MW-day to $269.92, with a regulatory cap of $325 reached in the 2028/29 auction.

Demand response is already a growing business there. PJM's market monitor, Monitoring Analytics, said demand response revenue rose 240% from 2024 to 2025, to about $523.5 million. Emergency demand response made up 88% of it. Voltus says energy users in PJM can earn up to $350,000 per MW-year through demand response payments.

A Brattle Group report released this month says virtual power plants can put downward pressure on electric rates by reducing peak demand.

There is a limit to the model. A 1 GW target is not 1 GW of round-the-clock power. Virtual power plants adjust load in specific periods and cannot replace the continuous supply data centers need, according to the BigGo Finance analysis of the deal.

The nuclear side

Google is also buying firm supply. Google and Constellation Energy announced a 20-year agreement built around an 890 MW power-purchase deal. The companies say it will boost output at 11 existing reactors in Illinois, Pennsylvania and New Jersey, and Constellation plans to invest more than $4.3 billion in the plants. The first uprate is expected in 2028, with work on the rest running through 2032 or 2033.

The two companies also struck a separate 15-year deal for 2,700 MW of electricity in PJM.

Constellation CEO Joe Dominguez said the upgrades are expensive and the company has known for years it could do them, but "it's really Google stepping up to the plate and providing the financial backing." Amanda Peterson Corio, Google's global head of energy and power, said speed to firm, clean power mattered, and acknowledged that data centers are "under a lot of criticism."

Google has been stacking up nuclear arrangements. It is working with NextEra Energy to restart the Duane Arnold nuclear plant in Iowa, has backed plant upgrades in Georgia, and has a partnership with reactor developer Kairos Power.

Crypto Briefing reported that Google's electricity consumption rose 37% in 2025 and that the company has secured about 1 GW of demand-response capacity through agreements with several utilities.

The grid problem is bigger than supply

The issue is not only how much power data centers use but how abruptly. TechRepublic reported that a downed power line near Washington, D.C. caused a brief voltage disturbance that sent 3.8 GW of data centers onto backup power within seconds. That was about 3% of demand, and lights flickered as far away as Chicago. PJM restored stability in about ten minutes.

Large AI facilities can also swing from 1 GW to nearly nothing and back several times a second in extreme cases. Gas turbines take anywhere from five minutes to half an hour to come online, far too slow to follow that.

"Frequency oscillations from AI data centers pose serious reliability challenges to the grid," said Sai Somayajula, a principal electrical design engineer at Nvidia, at the Data Center World Power show in September 2026.

Rules are following. Texas Senate Bill 6 requires data centers to pay for new grid infrastructure that supports their operations. PJM has proposed that large data centers be able to ride through transmission faults. The North American Electric Reliability Corporation is adding similar ride-through rules for large AI data centers, which should be ratified by the end of 2026.

Nvidia has introduced rack-level power smoothing features, and TechRepublic reported that developers are largely willing to comply.

What comes next

The 100 MW from June has to grow to more than 1 GW over the next three to four years, and the first Constellation uprate is not expected until 2028. Whether NERC ratifies its ride-through standard by Dec. 31 will show how fast the rules are catching up.