Dive Brief:

• Large data centers can boost on-site safety and reliability while providing significant grid benefits by shifting from proprietary electrical infrastructure designs to more standardized frameworks, a top National Electrical Manufacturers Association official told Utility Dive on Monday.
• Utilities increasingly value data centers capable of “islanding” from the grid during periods of peak power demand by falling back on on-site energy storage and generation, said Patrick Hughes, NEMA’s senior vice president of strategy, technical and industry affairs.
• “We see demand response playing an important role for the grid … it’s an underutilized resource, and we’d like to see it used more widely,” Hughes said, echoing comments NEMA made in a letter to Congress last fall. Data centers can use onsite batteries and microgrids to provide essential flexibility to utilities without interrupting their operations, he said.

Dive Insight:

Computing facilities representing about 30% of all planned U.S. data center capacity plan to power their operations with behind-the-meter resources, according to an analysis published last week by the energy research shop Cleanview.

Ninety percent of those projects were announced in 2025, which Cleanview said indicates that data center developers are growing impatient with large-load interconnection queues that can stretch up to seven years in some regions.

Of the behind-the-meter assets Cleanview could identify through permits or purchase orders, about 75% use natural gas as a fuel, and “virtually none of the developers planned to build renewables in the short term,” Cleanview founder Michael Thomas wrote in the analysis. While buyers of the largest gas turbine models generally face multiyear backlogs, data centers can procure smaller machines — such as mobile generators, reciprocating engines and aeroderivative turbines — within months as they race to power up, Thomas wrote.

“Data centers are trying to get through utility [interconnection] queues quickly … and being able to show that you can island during peak times, that you’re not going to put a lot of stress on the grid, will get you through the queue faster,” NEMA’s Hughes said.

Data center developers and operators are adding gas-fired generation to reduce the amount of interconnection capacity they require and build in redundancy once they’re hooked up to the grid, Hughes said.

But data centers increasingly value energy storage as a behind-the-meter asset because it provides additional redundancy, it can help optimize power quality to protect sensitive electronics and it can pair with zero-emissions generation to advance technology companies’ sustainability goals, Hughes said. 

On Monday, energy management provider Energy Vault said it would purchase 1.5 GWh of energy storage from Peak Energy and co-develop a “dedicated energy storage architecture designed specifically for AI Neoclouds and AI-first data center operators” with the sodium-ion battery technology company.

Industry analysts see data center companies willing to pay a premium for energy storage and other behind-the-meter assets amid growing public concern around large loads’ impacts on residents’ electric bills, too.

“The ability to avoid much of the political backlash around data center-electric affordability and protracted interconnection timelines is the appeal of [behind-the-meter assets], albeit at elevated price points,” Julien Dumoulin-Smith, a power sector analyst with Jefferies, wrote in a Monday investor note. 

Battery energy storage “is an increasingly critical part of the data center infrastructure,” Dumoulin-Smith added.

Last month, NEMA released voluntary standards for energy storage systems and microgrids on data center campuses. Hughes said NEMA wants to bring some order to what’s now a largely proprietary design process, with each major data center developer referencing its own internal standards. Competing standards can raise uncertainty during the engineering and design phases of a project, slowing procurement and increasing up-front costs, he said. 

“We see a lot of benefit in … starting to standardize around how to deploy storage and microgrids because then you get safer, more efficient data centers,” Hughes said.

NEMA is working with ASHRAE and the Pacific Northwest National Laboratory on a more comprehensive guidebook for data center design, Hughes said, calling it “a one-stop shop for data center developers and owners.” It’s slated for release in early summer.

The guidelines should be useful for utilities in data center hot spots, too, he said.

“[They] provide a common technical framework, which may help compress review cycles and reduce the associated burdens on resource planning departments,” Hughes said.