How CIOs can build energy-resilient IT infrastructure

Converging threats to IT ops

Several converging threats are emerging that affect IT energy costs.

The triple threat

Three forces now simultaneously pressure IT energy planning. They are the following:

• AI power demand surge. U.S. electricity consumption climbed from 0.1% annual growth between 2005 and 2019 to 1.7% per year since 2020, with the commercial sector growing at 2.6%, according to data from the U.S. Energy Information Administration (EIA).
• Oil price volatility. Natural gas accounts for roughly 40% of U.S. electricity generation, so global commodity price spikes translate into higher data center electricity rates, according to EIA.
• Geopolitical supply disruption. The Strait of Hormuz closure, which began on February 28, disrupted roughly 20% of global oil supply, underscoring how quickly geopolitical events translate into electricity cost pressure.

Quantifying the scale

Data centers consumed 4.4% of total U.S. electricity in 2023 and are projected to reach between 6.7% and 12% by 2028, according to a Department of Energy report produced by Lawrence Berkeley National Laboratory.

In Virginia, where data center concentration is highest, that share reached 26% of the state's total electricity supply in 2023, according to the Electric Power Research Institute. The cost is spreading beyond data center operators.

Data centers drove an estimated $9.3 billion increase in the 2025-26 capacity market charge, according to Monitoring Analytics, the independent market monitor for PJM Interconnection, which is a grid operator serving 13 mid-Atlantic and Midwestern states. This cost was absorbed, in part, by residential ratepayers across the region.

The strategic shift

The pressure is forcing a strategic reframe: Energy is no longer a cost to be optimized but a risk to be governed. Now, energy resilience belongs alongside cybersecurity and financial risk in enterprise risk frameworks, said Samir Datt, global lead for technology strategy and architecture at Protiviti.

"This mismatch between infrastructure development timelines and energy needs is a critical challenge for ensuring reliable operations," he said.

How energy volatility directly affects IT budgets

The mismatch between demand and grid capacity has a direct financial consequence for IT budgets, which grows as global energy prices swing.

The cost link

Data center electricity costs are exposed to global energy markets more than most IT leaders realize. Arif Gasilov, a partner at Gasilov Group who tracks utility resource planning and rate case proceedings, has explored the connection.

"Natural gas generation accounts for about 40% of U.S. electricity," he said. "So, when global energy commodity prices move, electricity rates follow -- sometimes within the same billing cycle, depending on how the utility's fuel cost adjustment mechanism works."

Behind the meter

Grid interconnection timelines that stretch to four or more years have pushed companies toward on-site natural gas as a faster path to reliable power.

Oracle's response is illustrative. The company contracted for 2.3 gigawatts of modular on-site natural gas power from VoltaGrid in October 2025 to serve its AI data centers in Texas, bypassing grid queues entirely.

Roughly 30% of planned new data center capacity now includes on-site generation, a shift Datt described as "power-first development."

The sustainability tension

On-site natural gas solves the reliability problem but creates a direct conflict with net-zero commitments. Companies that have pledged to become carbon neutral are now adding fossil fuel dependency as a practical necessity during grid expansion. This tension is reshaping how the industry talks about sustainability.

The resolution is architectural, according to Datt. His recommended hybrid approach includes the following:

• Renewable generation.
• Battery and flywheel storage.
• Gas-fired backup.
• Intelligent microgrid controls that optimize across cost, emissions and reliability in real time.

The geopolitical risk layer

The geopolitical situation, as it continues to evolve, represents a primary risk layer of energy costs. The Hormuz disruption is a visible geopolitical risk for IT infrastructure, but it's not the only one.

The energy shock

The International Energy Agency (IEA) described the Strait of Hormuz disruption as the largest supply disruption in the history of the global oil market, with crude flows falling from roughly 20 million barrels per day to a trickle. For data center operators on variable-rate commercial tariffs, the effect on electricity costs is direct.

The supply chain exposure

Energy infrastructure carries a separate geopolitical exposure that predates the current conflict. According to Wood Mackenzie, 80% of U.S. power transformers are sourced from imports, with lead times already stretched before recent trade disruptions began.

Semiconductor and AI hardware supply chains face a different pressure. China accounts for roughly 60% of global rare earth mining production and approximately 90% of processing and refining, according to the IEA. Export controls on rare earth elements, expanded in stages through 2025, now apply to sectors including semiconductors, energy systems and AI data centers.

The Hormuz crisis adds a further dimension: Gulf region helium, a critical input for semiconductor fabrication, has been constrained by the conflict.

The national security shift

On March 18, the U.S. Department of Energy's Office of Cybersecurity, Energy Security and Emergency Response published its first-ever formal strategic plan. The five-year roadmap focuses on hardening grid infrastructure against cyber and physical threats and improving incident response capabilities, reflecting how geopolitical risk in IT strategy has converged with energy planning at the federal level.

Marissa Hummon, CTO at Utilidata, has tracked the same shift from the operator side.

"Governments are treating compute capacity the way they once treated steel or oil, and that changes the calculus for operators in real ways," she said.

What CIOs are doing now

IT leaders are taking a range of actions to build energy-resilient IT infrastructure.

Power-first siting

Energy resilience has become critical in site selection. Utility feed diversity, grid interconnection queue position, local renewable capacity and geopolitical risk profile must all be assessed before a project moves forward.

Nic Bustamante, chief data center officer at Exowatt, framed the practical question that now precedes any siting decision.

"The organizations adapting fastest stopped asking, 'Where should we build?' and started asking, 'Where can we actually get power?'" he said.

Contract restructuring

Fixed-rate contracts designed for a flat-load electricity market no longer reflect how data centers consume power.

Datt recommended a portfolio approach, which includes the following:

• Long-term renewable power purchase agreements.
• Variable-rate exposure to capture negative pricing during renewable overproduction.
• Interruptible supply agreements, where curtailment during grid stress earns lower rates.

On-site generation and microgrids

Microgrids have moved from aspirational to near essential for any facility that cannot afford grid dependency.

"The capability to disconnect from an unstable grid and operate independently is no longer a luxury feature," Datt said. "It is a baseline requirement for mission-critical operations."

Regional resilience planning

Geopolitical instability has pushed many CIOs to build redundancy across regions before it becomes urgent.

"Our first priority related to instability in the geopolitical area has been ensuring the depth of resiliency to our infrastructure based on region, through reserving capacity, planning failover paths and scenario testing," Logan said.

Energy market risk in continuity planning

Organizations on variable-rate commercial tariffs are directly exposed to commodity price shocks. Those with fixed-price contracts or behind-the-meter generation are insulated from the worst of it.

To solve this issue, organizations can incorporate energy procurement risk into continuity planning the same way they model supply chain disruption, Gasilov said.

Close the accountability gap

Energy consumption from AI and computing workloads scales without any single group bearing full accountability for the cost. IT enables access, departments pay for licensing, facilities teams pay the electric bill and sustainability reports on emissions, but no one owns the full picture.

"Fragmented ownership makes it harder to manage energy as a strategic risk rather than a facilities expense," Gasilov said.

Know your exposure

The organizations making the most progress on energy resilience share one starting point: a clear-eyed inventory of every vulnerability in their power supply chain, from utility feed diversity to contract structure to geopolitical risk profile.

"You cannot build resilience against a threat you haven't characterized," Datt said.

Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He has pulled Token Ring, configured NetWare and been known to compile his own Linux kernel. He consults with industry and media organizations on technology issues.