Fabs Are No Longer Alone in the Queue when it comes to power

Semiconductor fabs remain some of the largest industrial power users in Arizona, but they increasingly share the grid-development pipeline with another class of very large load: data centers.

Few utilities see that shift more clearly than Salt River Project (SRP). One of the largest public power utilities in the US, SRP supplies electricity and water to much of the Phoenix metropolitan area, at the heart of one of the country’s fastest-growing semiconductor hubs. Metro Phoenix attracted $114 billion in manufacturing investment between 2021 and 2024.

Asked about the biggest challenge in serving large customers, Leah Harrison, Senior Manager of Sustainability Policy and Programs at SRP, pointed not to a single technical constraint but to pace. “The scale and the speed is our biggest challenge right now,” she said. SRP has experienced rapid growth before, but today’s growth is also being driven by data centers, and that is changing the environment in which semiconductor projects secure power.

Large Loads Are Now Assessed in Clusters

SRP’s new cluster study process aims to give large customers more transparent communication and defined milestones, with SRP and its customers working in partnership on go/no-go decisions.

Customers can sign up a couple of times a year to join the next cluster. SRP then assesses what each needs: whether new transmission or distribution capacity is required, whether a customer needs a dedicated substation or can connect to existing infrastructure, and whether wider network upgrades or new generation are needed.

For fabs, that means upgrades are assessed as part of a cluster rather than in isolation, and location on the system helps determine cost. Cost allocation for shared infrastructure is worked through in the same process, Harrison said the cluster study determines “how those costs break down and what would be covered by what entity.”

Forecast Quality Matters More as Lead Times Grow

The quality of information a customer provides directly affects how accurately the utility can plan around the required capacity, location and timing. This is increasingly important as lead times lengthen for equipment such as transformers and for siting new transmission lines.

Phased information is particularly useful, Harrison explained. For example: “If a customer can share that they are going to need this capacity in three years but know they are going to expand out in eight, that really helps utilities plan.” SRP’s integrated system plan looks 10 to 15 years ahead, uses scenario-based planning and is updated roughly every three years, so a credible phased forecast can feed into long-term generation and system planning rather than being treated only as a near-term connection request.

For facilities teams, that means planning power needs, expansion phases and connection timing early. That is easier said than done. Tools rarely draw their full rated power, so fabs struggle to predict their own load and rely on safety margins instead. Expansion plans are less certain still, and announced projects are often delayed or cancelled. A utility wants firm numbers a decade out; a fab may not have them for years.

The Demand Curve Is Flattening

A more structural change is taking place in the shape of demand. Phoenix’s system has historically been heavily air-conditioning driven, creating strong seasonal and time-of-day peaks. But as large industrial and other major customers account for a greater share of demand, that profile is changing.

“It’s not seasonal, it is pretty steady in a lot of cases,” Harrison said, requiring what she described as “a different mode of operating”.

Large loads can also create challenges when they disappear suddenly. “If you do have a large load that drops off suddenly, that has an impact on the system,” Harrison said, something the utility must plan for and respond to.

SRP is also exploring ways for large customers to provide more flexibility. Harrison said it is working with several customers on demand response, load shifting and other grid-support arrangements, with some large customers already participating in custom demand response programmes. She expects this area to become more important over time.

The practical constraints are already clear. Production risk can be a concern, Harrison said, and discussions include how much notice customers receive when an event is called, whether equipment can be shut down safely, and whether production can instead be rescheduled. The aim is to minimise risk on both sides while retaining a benefit for each.

Renewables

Renewables and energy storage add another layer to the supply and resilience equation.

SRP is adding more batteries to its system, which Harrison said help extend the use of solar generation and give the utility greater flexibility. Hydroelectric generation is also useful because it is flexible and fast to respond, while wind is more difficult to control because generation depends on when the resource is available.

The wider issue is resource adequacy. When SRP adds a resource, Harrison said it considers its effective load-carrying capacity and whether that resource will actually be available when the grid needs it most.

That requires modelling future conditions across a wide range of weather scenarios. SRP looks at “every hour of every day” to assess how different resources are likely to perform and what generation mix may be required from a reliability perspective.

Customers can also participate in programmes that provide a dedicated renewable component to their electricity supply. SRP provides the associated carbon reporting, allowing customers to use that information towards their sustainability targets.