This report extends previous analyses of the benefits of data center flexibility by adopting a
modeling framework that looks at the economics of capacity investments over the long time
frame typically considered by utilities in their planning (i.e., a decade or more). Broadly, the
findings suggest that flexible demand response offers the potential to significantly reduce the
amount of new capacity needed to meet rapidly growing electricity demand from data cen-
ters over the next 5 to 10 years. Without flexibility, the additional electricity may largely be
provided by new gas units; with flexibility, the capacity mix shifts more toward renewables.
Only limited temporal flexibility is needed to achieve an appreciable share of the potential
benefits. Flexibility can feasibly reduce system costs by tens of billions of dollars over the
next decade and lower electricity prices for both data centers and retail customers when
compared to a situation where data centers do not engage in much demand response. Specif-
ic findings in this report’s modeling should be viewed as illustrative of broad trends and as a
call for more information and analysis.