What does AI do in a smart grid, and why is it becoming essential?

AI helps grid operators make better decisions by rapidly processing huge volumes of data from sensors, smart meters, weather forecasts and operational systems. In practical terms, it improves load forecasting, spots patterns humans and traditional models can miss, and supports real-time control so the grid can respond to sudden changes in demand or generation. It is becoming essential because the electricity system is changing quickly: renewables add variability, extreme weather is more common, and new large loads such as AI data centres can appear and shift at speed. AI enables operators to move from reacting after the fact to preparing in advance, improving reliability while unlocking efficiency savings.

How does AI improve load forecasting compared with traditional forecasting models?

Traditional forecasting generally relies on mathematical models tuned using historic demand curves and seasonal patterns. That works well on “normal” days, but it can struggle when something unfamiliar happens and there is no relevant historical reference, such as unusual weather or a sudden shift in how people use electricity. AI models learn from complex, multi-source data and can adapt as conditions change, making them stronger at recognising and predicting atypical behaviour. The goal is not to dismiss legacy models, but to reduce the growing gap between forecast and reality on the days when errors are most costly, helping operators run the system more efficiently and avoid serious disruptions.

Can AI help prevent blackouts and improve grid reliability?

Yes, but it does so by strengthening preparedness rather than acting as a magic switch. More accurate, faster forecasting supports better scheduling of generation, storage and flexibility, and helps operators anticipate stress on the network before it becomes critical. AI can also support dynamic grid management by analysing conditions in near real time and recommending actions that keep frequency and supply–demand balance stable. Importantly, utilities treat this carefully because the consequences of mistakes are severe. AI works best as part of a broader resilience toolkit alongside established forecasting, market signals and experienced operational oversight, so decisions remain robust even when the system behaves in unexpected ways.

What can we learn from Hydro-Québec’s use of AI for load forecasting?

Hydro-Québec provides a clear example of how AI is adopted safely and pragmatically. After a proof of concept using a neural network on a single substation, the utility invested in years of research before deploying deep neural networks into production. It now uses AI for short-term forecasting within a 36-hour window, hourly forecasts 10–12 days ahead using meteorologists’ forecasts, and even longer outlooks based on “historic normal” weather values. Crucially, it runs AI alongside legacy models to compare outputs and flag significant discrepancies for human review. During a heatwave, one legacy model needed major corrections while the AI model successfully anticipated an unusual demand pattern, illustrating where AI can add the most value.

How can AI data centres support grid flexibility rather than simply adding demand?

AI data centres can be a difficult load to predict, particularly during model training, which can consume substantial power. However, they can also become a flexible resource if their workloads are orchestrated in response to grid conditions. Trials such as National Grid’s work with Emerald.AI explore “smart mediation”, where software observes data centre workloads, identifies which tasks are non-critical, and adjusts computing activity to shape electricity demand. This can include ramping down by a defined number of megawatts, holding reductions for an agreed period, and ramping back up gradually to avoid “snapback” that can destabilise the grid. Done well, it creates a more symbiotic relationship between digital growth and system reliability.

Power Technology

B&W selects Siemens Energy turbines for 1GW data centre power project

The companies agreed on a limited notice to proceed and expect to finalise a full contract in Q1 2026.

Babcock & Wilcox (B&W) has chosen Siemens Energy to supply steam turbine generator sets for a power project supporting a data centre run by US-based Applied Digital.

The partnership enables B&W to secure turbine equipment for its plan to deliver 1GW of power to the facility by the end of 2028.

The companies have agreed on a limited notice to proceed, with the comprehensive contract expected in the first quarter of 2026 (Q1 2026).

Earlier, B&W signed a limited notice to proceed with Applied Digital for the development and installation of four natural gas-fired power plants.

Each plant will have a capacity of 300MW and will include boilers and associated steam turbines.

Plans also include an ongoing contract for parts and services to support the facility after commercial operations commence.

B&W chairman and CEO Kenneth Young said: “This arrangement brings together two companies with long histories of innovation and leadership in the power generation industry.

“Leveraging Siemens Energy’s advanced turbine technology alongside B&W’s proven boiler systems positions us to meet critical schedule milestones and deliver reliable power by the end of 2028.”

To meet project timelines, the facilities will use gas-fired boilers that generate steam to drive the turbines, providing dispatchable power output.

B&W has implemented similar boiler solutions at various utility and industrial sites globally. The company aims to apply this experience to deliver energy infrastructure for AI and other data centres.

Siemens Energy steam turbine and generators senior vice-president Tobias Panse said: “By pairing our steam turbine systems with B&W’s established boiler technology, we can deliver a straightforward, cohesive setup for large‑scale power, a configuration well-suited to the continuous demand profile of modern AI facilities.”

In October 2025, Xcel Energy purchased ten large gas turbines and related generation equipment from Siemens Energy for two planned power plants in its south-west service territory. The two facilities are expected to add 2.08GW of dispatchable generation capacity, providing flexible, on-demand power during peak periods and changing market conditions.