The energy sector is facing significant change as demand for electricity soars, driven by the rapid growth of data centers and digital infrastructure. Businesses using in-house generation, reducing consumption, or contracting a third-party resource to manage power needs are not new concepts. What is new, however, is the scale and importance of companies installing their own behind-the-meter generation.
The term, bring your own capacity (BYOC) takes this concept a step further through grid-accredited capacity, not just on-site generation. This approach, often targeting hyperscale datacenters and large tech companies, is driven by grid constraints and the need to avoid long interconnection delays.
Although substantial new grid capacity is projected in the coming years, the current infrastructure is insufficient to meet the immediate surge in demand. As a result, BYOC is being adopted as a novel strategy to ensure reliable power for new data centers. However, the increased adoption of BYOC is raising concerns about grid planning and equity.
In September 2025, Voltus launched a BYOC solution using distributed energy resources (DERs)and virtual power plants (VPPs) to help data centers rapidly secure capacity. By aggregating flexible loads already present on the grid, Voltus can deliver accredited capacity to new datacenters. This model intends to bypass the wait times associated with traditional grid expansion, allowing data centers to accelerate expansion.
The BYOC solution requires the developer to fund, install, and manage their on-site power generation. Since this approach is costly, it favors well-resourced companies. Still, the VPPs are helping meet demand without adding pressure to the already strained grid.
In 2025, the Department of Energy forecasted that deploying 80 GW to 160 GW of VPP capacity by 2030 could meet 10% to 20% of peak electric demand. By aggregating DERs such as rooftop solar and residential batteries, VPPs provide a stable, flexible solution that can meet rising demand from artificial intelligence (AI) data centers and address the supply shortfall caused by retiring coal-fired power plants. In addition to the environmental benefits, the Department of Energy (DOE) estimates that VPPs could reduce grid costs by up to $10 billion per year because they are mainly used during peaking, which is costlier than base load.
BYOC solutions are a creative way to help satisfy AI’s insatiable appetite for computing power, but they don’t address the present-day limitations of the grid. Creating a more resilient, equitable, and sustainable grid will require creative regional planning and revamped policies.