TVA approves Elon Musk’s controversial data centre plan for more power

The Tennessee Valley Authority (TVA) Board of Directors has approved a controversial plan to supply 150 megawatts (MW) of power to a South Memphis data centre run by xAI, a company founded by Elon Musk.

The plans to bring the data centre to Memphis pitted the the local utility, Memphis Light, Gas & Water (MLGW) against its regulator, the city council earlier this summer. The xAI facility powers X’s – formerly known as Twitter – AI chatbot, ‘Grok,’ and recently began operations.

Initially, the company planned to use 150 MW of electricity, but recently Musk has said he plans to double the facility’s computing power by the end of 2024, and it has been reported that the facility’s energy use will also double, according to the Southern Environmental Law Center.

“We are alarmed that the TVA Board rubberstamped xAI’s request for power without studying the impact it will have on local communities,” Amanda Garcia, senior attorney at the Southern Environmental Law Center, said. “Last year, TVA questioned power reliability and proposed a new dirty gas plant in South Memphis, and today Board members expressed concern about the impact large industrial energy users have on power bills across the Tennessee Valley. TVA should be prioritizing families over data centres like xAI.”

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The site, an industrial park, originally only had access to 8 MW of power from a nearby substation. MLGW upgraded its capacity to 50 MW over the summer. The site’s need for additional power triggered a request to TVA, as approval from the TVA Board is required for industrial customers using more than 100 MW of power.

“Part of TVA’s core mission is to work with partners to bring investment and jobs to communities across our region. In every case, we carefully review the details of each company’s proposal and the associated electricity demand needs,” TVA said in a statement. “These partnerships include maximizing demand response opportunities, which support system flexibility when peak demand gets high. We appreciate MLGW’s partnership.”

Doug McGowen, CEO of municipally-owned Memphis Light, Gas & Water shared the plans at a somewhat contentious city council meeting in July. McGowen described the prospect of the data centre as a potential “win for the city,” given that the data centre would occupy a vacant industrial park facility and support the buildout of new infrastructure.

McGowen told council members that the xAI data centre would not strain the grid or impact reliability for local customers. The added 150 MW load is still well within MLGW’s peak load forecasts, and the utility can buy additional power from the Tennessee Valley Authority. The facility is also likely to participate in a demand response program, cutting power usage during times of grid strain.

Council members said they were “disheartened” by the plan, primarily due to their level of involvement in the arrangement. Several said they had received numerous concerns from the public about the plan, which had been reported by local media but not previously shared with the city council.

Originally published by Sean Wolfe on power-grid.com