Data centre power and cooling: grid strain, space tests and a $1.1M fine

The US Department of Energy announced this week that it will invest $5.25 billion in grid improvements. The package includes $1.9 billion in federal funds and $3.35 billion in cost-share funding, according to The Register.

The money supports 31 projects in 26 states, aiming to add at least 23 gigawatts of capacity. The $1.9 billion federal share is the core of the announcement. The programme does not build new generation. Most work involves reconductoring or rebuilding more than 1,500 miles of transmission lines and deploying sensors, power flow control devices, and analytical tools across 21,000 miles of grid infrastructure. The Department of Energy claims this will improve reliability and lower electricity costs for roughly 100 million Americans. US Secretary of Energy Chris Wright said the investments "will get more out of the infrastructure we already have, move more electricity across the grid, and help deliver affordable, reliable, and secure power that will fuel American prosperity for decades to come."

That framing matters. The constraint is not only how much power the country can generate. It is how much the wires can carry and how quickly the system can add capacity.

The Register reported that Moody's warned earlier this month that datacenter construction is outpacing the grid's ability to add the required capacity. By 2030, Moody's estimates US datacenter electricity consumption will reach 426 TWh, nearly double the 2025 figure. That is the number to keep in mind when reading any announcement about grid upgrades. In the meantime, operators are buying power in other ways. The Register noted a flurry of investment in small modular reactors, geothermal generation and the recommissioning of aging nuclear plants. Chipmakers are also pushing for smarter, more connected datacenters that can release capacity back to the grid when necessary, Nvidia among them.

Cooling is the harder problem

Power gets the headlines. Heat is where the physics gets awkward. Google's Project Suncatcher, an effort to test AI compute in orbit, is the clearest illustration.

Ars Technica reported that Google's first experimental satellite, dubbed MVP, is scheduled to launch on October 1 aboard a SpaceX Falcon 9 as part of the Transporter-18 rideshare. The satellite is about the size of a refrigerator and carries four of Google's custom TPU AI accelerators. Its solar panels supply about one kilowatt of power, roughly enough to run a microwave or a hair dryer. Google did not build the spacecraft from scratch. While the AI hardware inside is Google's, the satellite comes from a satellite imagery firm called Planet Labs, according to Ars Technica. The original plan was to launch two custom satellites in 2027, but Google wanted to move faster and integrated its chips into a satellite Planet Labs had already built for an early test.

Cooling is the reason the test will run in short bursts. Ars Technica reported that Google's solution uses a layer of malleable "thermal interface material" connecting the chips to aluminium and copper heat pipes, which conduct heat into a radiator that projects it into space. Even so, the system can only operate for spurts of about 15 minutes before the TPUs must shut down to let the radiators catch up.

Tom's Hardware also reported the 15-minute limit, noting the satellite will handle AI requests for up to a year while remaining in orbit for up to six years before burning up on re-entry. The two outlets differ on how long the AI payload will operate, so treat the duration claims with care. Radiation is the other problem. Ars Technica noted that radiation can damage chips or interfere with calculations by flipping bits, and that Google's chips are the same TPUs it uses in terrestrial servers rather than specially hardened hardware. Tom's Hardware reported that Google's answer, for now, is to restart the chips periodically. James Manyika, Google's senior vice president of research, told The New York Times: "We don't expect, to be perfectly frank, that we'll have anything usefully operational in the next few years." He compared the effort to Google's driverless cars, which the company tested "like 15 years before anything showed up."

Orbital data centres are not a near-term answer to terrestrial power and cooling limits. They are a research programme with a four-chip satellite and a one-kilowatt solar array. Google has floated long-term plans for networked fleets of more than 80 satellites, according to Tom's Hardware, but the company's own research chief puts the timeline in years, not quarters.

New Jersey's $1.1M example

On the ground, the enforcement side is getting louder. New Jersey ordered the operator of one of the East Coast's largest planned data centres to pay a $1.1 million fine for secretly installing and operating gas generators in violation of the state's Air Pollution Control Act, Ars Technica reported on 24 September. DataOne was fined after an investigation by The Guardian and Floodlight News in August shared thermal drone footage showing that 45 of the 62 gas generators were operating.

None of the generators had the permits required for units with 37-kilowatt capacity or higher, despite running at 1,982-kw capacities, more than 50 times the state limit, according to Ars Technica. New Jersey's Department of Environmental Protection noted that such generators emit carbon dioxide, nitrogen oxides, carbon monoxide and other combustion-related pollutants, which can worsen asthma, trigger heart attacks and cause early deaths. DEP Commissioner Ed Potosnak called the action "by far the largest ever taken against a data center in New Jersey" and said data centres would not be "constructed or operated with impunity in this state."

The remedy has limits. DataOne was given 45 days to apply for permits or cease operations, but it can keep running the gas engines while seeking them. Nichole Gardner of the local environmental nonprofit Sustain SJ told Ars that "we believe it is insufficient, both in dollar amount and enforcement." A DataOne spokesperson told The New York Times that the company "will apply for the air permits for the temporary generators," said it "disagreed" with the fine, and added that the site is "transitioning to low-emission, quiet fuel cells."

Residents near the Vineland site, which powers Microsoft's AI tools including Copilot, are not reassured. Tiffany Leone-Vespa told the NYT: "What have we been breathing in since they've been running these generators without permits?" Steve Brown, another longtime resident, called it a "don't ask for permission, just ask for forgiveness later" arrangement. New Jersey has more than 80 data centres planned or under construction, and it recently passed a law ending data centre tax credits, blocking developers from a fund that previously offered $250 million in incentives.

Put the three stories together and the pattern is clear. The grid money is real but back-loaded. The orbital experiment is real but tiny. The New Jersey fine is real but, as residents point out, small relative to the capital involved. None of them solves the power and cooling crunch that the industry's own projections describe.