Californian utility Pacific Gas and Electric Company (PG&E) has partnered with transmission infrastructure firm Smart Wires on a new project aiming to enhance grid reliability and support the growth of data center energy consumption in San Jose, California.

The partnership will see Smart Wires deploy its Smart Valve system, an advanced power flow control (APFC) technology, to mitigate thermal overloads, redirect power flow, and increase available capacity at PG&E’s Los Esteros electric substation.

The project is expected to boost capacity at the substation by more than 100MW. It is located in close proximity to several new data centers under development in the Alviso community of San Jose. Microsoft and Arcadis are both developing data centers in the local area.

The project is expected to be completed in late 2025, and according to the partners, it will play a crucial role in reinforcing critical infrastructure required to keep the data centers operating.

"As the demand for data centers skyrockets, ensuring a reliable and efficient grid is more important than ever," said Joanna Lohkamp, CEO of Smart Wires. "Our work with PG&E demonstrates the significant impact of our SmartValve technology, dynamically redirecting power from overloaded to underutilized lines. This approach addresses current capacity constraints and optimizes existing infrastructure for the massive energy needs of data centers while also offering a scalable solution for future grid enhancements."

The project was influenced by the growth of data center capacity within San Jose, with the Smart Wires solution seen as a crucial bridge to allow for the construction of a new transmission line, slated for completion in 2032.

Wholesale energy provider the California Independent System Operator ultimately identified Smart Wires APFC system as the “most effective, reliable, and timely approach.”

"Working with Smart Wires allows PG&E to efficiently address projected capacity needs while maintaining high reliability for our customers," said Chad Dupuis, principal electrical engineer, PG&E. "This collaboration highlights our commitment to deploying innovative technologies that enhance our grid's flexibility, security, and resilience."

Following the completion of the new transmission line, the APFC system will remain to “dynamically balance power flows across the network.”

Smart Wires was founded in 2010 and is headquartered in Durham, North Carolina. It has completed several projects with utilities across the US, including, Central Hudson Gas & Electric, National Grid Electricity Transmission, and ISA Transelca.

In January, it successfully raised $65 million to scale its commercial operations and support utilities in meeting growing energy demand from the data center sector. The funding includes new investments from BP Energy Partners alongside contributions from Keystone Group.

PG&E is California's primary electricity provider. Earlier this week, the utility reported a significant increase in the amount of data center capacity seeking connection to the grid. The utility revealed that it expects new data centers to require approximately 8.7GW of power over the next ten years. This represents a marked increase from the end of 2024, when the utility projected that it would require 5.5GW of electricity.