US Grid Constraints: Towards 40GW+ of Behind-the-Meter Datacenter by 2028?

https://newsletter.semianalysis.com/p/us-grid-constraints-towards-40gw

by felixdoerp • 24 days ago

36 79 24 days ago

newsletter.semianalysis.com

alex_duf3• 24 days ago

What an absolute ecological disaster. If bubble there is, now would be a great time for it to pop.

trhway4• 24 days ago

Alternatively the crisis can be used to accelerate right development - quickly build up solar farms and transmission lines. Both of these can be done quickly if there were a political will. Yet, that will is missing.

So, we're talking 40GW. Lets see what China does:

https://energyandcleanair.org/china-energy-and-emissions-tre...

"In the first two months of 2026, China added:

32.5 gigawatts (GW) of solar power capacity, down 18% from last year. 11 GW of wind power capacity, up 19% from last year. 20 GW of thermal power capacity, up 414% from last year. 1.2 GW of hydro power capacity, down 36% from last year. 1.2 GW of nuclear power capacity. "

Edit: to the proponents of nuclear - i think nuclear is very damaging to society as it promotes corrupt crony-government capitalism instead of market forces.

PunchyHamster• 24 days ago

solar farms are worst kind of power source for constant loads like datacenters running AI training

clarionbell• 24 days ago

I like how balanced their energy mix is. It is very obvious that China is optimizing for capacity and availability. There isn't really a push for clean energy sources for political, or climate, reasons. They are deployed when it makes sense, backed up by robust coal and nuclear sources.

In Europe, we approach energy generation as a political, or climate problem. We are building solar and wind power sources, not to make energy cheaper, or to make grid more resilient, but to fulfill an ideological goal.

The results are, not great, to be honest. The energy prices have increased substantially, and are now driving our chemical industry bankrupt.

Edit: I do not dispute the climate change. I am only highlighting impacts of current policy.

spacington2• 24 days ago

Yeah and the richest person on the planet with full vertical integration (with partner) Elon musk and Tesla aka solar roof and power wall wants to sell DC in space and hasn't fixed any use of gas turbine for Colossus 1&2.

Without enforcement it will happen continuously with snail pace

cloudie78• 24 days ago

Right off the top of my head, to power a 500MW Datacenter we need:

2.2-2.5 GWdc solar capacity which at 600W/panel amounts to 14-17sq mi plus additional 8-12GWh of storage to deal with nighttime, two-three days of cloud cover is not going to work with these numbers.

Ballpark 5-7BN$

Nuclear otoh, 1GW continuous - gives constant power, badly managed first of a kind (or first one after decades) build will be at around 10-15BN and that’ll cover two 500MW data centres.

There’s also the second/third degree order effects nuclear power stations have of creating jobs and industrial manufacturing demand. To run a nuclear power station you need to employ 1000 people (engineers plus support staff) - that’s a small town’s worth of adults. So you’ll need a town with a school, hospitals, stores - those need staffing as well.

Unfortunately building nuclear is not something that’s currently a feasible path as it requires patient capital and long term vision and planning.

So gas turbines it is at around ~1BN$

stouset2• 24 days ago

If we build a terawatt of green energy capacity then turn around and immediately use it for datacenters rather than to replace fossil fuel generation, we haven’t gained anything. If anything we’ve lost out.

leonidasrup7• 24 days ago

Proponents of solar power always like to equate 1 GW of solar power capacity with 1 GW of wind power capacity or 1 GW of thermal power capacity, ignoring capacity factors, ignoring need for reliable backup.

Sometimes they ignore the transportation costs, as for example: capital costs for transporting 1 GW of electricity over 1,000 km using High Voltage Direct Current (HVDC) technology costs more then the 1 GW peak solar power plant attached to the power line.

China builds everything solar, coal, wind, hydro, nuclear. So if you want follow the example of China, then you have to, like China, build everything and don't just pick one part of Chinas energy strategy.

Also I would not present China as an example of market capitalism, they have a very strong government capitalism. Probably the strongest government capitalism in the world.

marcyb5st3• 24 days ago

And especially terrible for the communities that have to live with gas turbines or other local power generators as neighbors. Noise and air pollution constantly [1].

But fuck them, they are poor people so we don't care about them /s .

Additionally, people against data centers are accused of being paid by China [2]

[1] https://www.theguardian.com/environment/2026/feb/13/elon-mus... [2] https://fortune.com/2026/06/10/kevin-oleary-trump-administra...

trhway4• 24 days ago

you can't put an ADU, yet, you can put in 200MW generating capacity.

everfrustrated5• 24 days ago

It wasn't long ago that every city had a coal power station right in the center of it. Things aren't nearly as bad as you suggest.

polski-g3• 24 days ago

If their property is damaged they can sue. We have a system for this.

logicchains2• 24 days ago

By that logic almost any kind of economic development is an ecological disaster because it uses power.

everfrustrated5• 24 days ago

Welcome to European thought

alex_duf3• 24 days ago

Economic development is great and I'm all for it, but it shouldn't be done at any cost. I quite like our atmosphere, ideally with less than 400ppm of CO2. We're finally seeing signs of economic development decoupling from primary energy consumption, there are positive signs.

I find that it's just a shame to be so close to energy abundance - through renewables - to only be set back by the installation of "temporary" gas turbines. The economic incentive is so great that delaying the datacenters in order to power them cleanly isn't even considered: there's no incentive to do so. This may sound a little alarmist, but if it's GW of capacity in 2028, it's TW in the mid 30s.

I'd much rather live in a heavily compute-constrained world for the next 5 years or so than in a world that keeps increasing its gas consumption.

There's just no way to force our incentive to align with preserving our climate, and it's making me extremely depressed.

By your logic we shouldn't question any development, at any cost, including if it contributes to making our world uninhabitable for billions of people within our life's timescale?

rapsey8• 24 days ago

This is a defeatist EU attitude that leads to the worse outcomes. Expensive power and a failing economy.

There is money now for a huge investment boom, which is what is happening in the US and China. With EU failing completely.

logicchains2• 24 days ago

There is money now for a huge investment boom

Not in western Europe, because they spent almost all their excess economic output over the past few decades on welfare/transfer payments.

Tade03• 24 days ago

As an (eastern) European this is to me a greater concern than the Russian invasion in terms of availability of gas for the winter, considering how so many of those places run on gas turbines.

Putin only has a certain amount of the resource on tap and sells it to someone eventually. Meanwhile data centers will eat up whatever you throw at them at any price, especially that in principle they don't need to be connected to the grid, so I imagine setting up their power supply must take months at the longest.

rapsey8• 24 days ago

The US has incredible gas reserves. Much more that can be exported with ships.

felixdoerp• 24 days ago

I am interested to see how this plays out and what will happen to potentially stranded assets. Not even talking about outdated chips but all these gas turbines. I appreciate what this push can do to the built out of grids etc.

ReptileMan• 24 days ago

Developing world will soak them in a heartbeat. Unreliable grid is one of the problems they have that slow their industrialization and development pace. If you are foreign investor - LNG terminal + turbines may be more expensive, but if you bypass some of the bribes and incompetence it may be worth it.

Humorist2290• 24 days ago

Interesting analysis. In it they say

  Worse, the burden [generating energy] increasingly falls on the buyer [data center developers]

I don't believe this is worse, but appropriate. The grid is a shared resource, used by enterprise and individuals. If some class of consumers demand an outsized share of that resource, they should pay an outsized share of its maintenance and development. I don't see that happening.

It's as if trucking companies flooded the highways with so many trucks that people couldn't commute to work anymore.

ZeroGravitas4• 24 days ago

When the first wave of these datacenter stories came out, the utilities complained that they couldn't finance the work because the data centers refused to commit to paying for them over the longer term, leaving other ratepayers on the hook for the investment.

This seems to further confirm that, though now the data centers are being portrayed as the victims in this.

The sentence immediately following your quote:

securing grid-connected power now often requires developers to post substantial letters of credit, security deposits, or sign take-or-pay commitments to fund the generation built to serve their load.

The question is, if they couldn't commit to paying the utility, how can they finance building their own independant grid equivalent? Did they find some other sucker to take on the risk?

htrp• 24 days ago

venture startups (nuclear) and alternative energy public equities

parineum• 24 days ago

The grid is a shared resource, used by enterprise and individuals. If some class of consumers demand an outsized share of that resource, they should pay an outsized share of its maintenance and development. I don't see that happening.

That makes sense up until you realize that the data centers aren't just burning watts for fun. They're providing a service that is in extremely high demand to a very high amount of those other electricity customers.

It's as if trucking companies flooded the highways with so many trucks that people couldn't commute to work anymore.

And those trucks are delivering products to the stores those commuters shop at.

usrnm• 24 days ago

And we have a perfect instrument to express this relationship: money. If the service is really important to people they will pay money for it, and the companies can pay some of that money to utility providers. The economy works as intended, everyone is happy. Absolutely no need to invent subsidies or move the burden onto consumers

cucumber37328423• 24 days ago

It's not "worse" per-say in that the buyer is crunching the numbers and deciding to go with on-prem generation for a lot of their jiggling electrons.

But holy shit is something broken if that sort of approach is more economically effective (middle of nowhere Alaska not withstanding) than having the people who not only specialize in pipes for jiggling electrons, but have all sorts of preferable treatment from regulators and expertise in financing these sorts of things, just enlarge the size of the pipe to your door.

Furthermore, the grid wants to be as big as it can for basically all the same inflow/outflow smoothy reasons a bank or an insurer wants to be. Something is very, very broken here if big, highly financed corporate interests are saying "no I'm not gonna get all my power from the grid" and the grid is saying "actually this is fine". They should be jumping at the chance to essentially have someone else at least partly subsidize their improvements.

Everyone wants to whine about future volatility, will the data centers be around to pay for what they ordered, etc, etc. But the energy industry has a long, long, long track record of financing this risk away. Oil and related energy infra has been boom and busting for over a century.

30yr ago it would have been unfathomable that anyone without an extremely niche case would go where the energy is rather than just ordering up power from the grid.

psd17• 24 days ago

Not sure how you calibrate your "niche" scale, but foundries and aluminium smelting plants have commonly been sited near generators in Britain. I suppose that transmission losses matter at the GW scale; and also that a national grid is a complex system, with phase slump being a cause of failure even with sufficient generation capacity.

Every DC I've visited - probably ten - has on-site generators, for redundancy. To a certain type of mind, that's capital going to waste. I can imagine a bean-counter desire to sweat that plant.

I agree that today's economics is very broken, but co-siting generation and consumption is probably not a symptom.

Aside: Language is whatever people use, but, "per se" is Latin for "in itself". "Per-say" is an eggcorn.

leonidasrup7• 24 days ago

In the past major industrial electricity consumption facilities (like aluminum smelters) have been build near big power plants. Or dedicated power plants have been build to power major industrial electricity consumption facilities.

For example:

PS5 Combined Cycle Power Plant for Aluminium Bahrain (ALBA)

https://www.idom.com/en/project/ps5-combined-cycle-power-pla...

India

https://nalcoindia.com/business/operation/captive-power-plan...

Tiwai Point Aluminium Smelter, New Zealand

https://en.wikipedia.org/wiki/Tiwai_Point_Aluminium_Smelter

vitally3643• 23 days ago

It's as if trucking companies flooded the highways with so many trucks that people couldn't commute to work anymore.

Funnily, that's precisely what happened to America's rail network. Enterprise demanded unlimited right of way to the point that it's laughable to even consider transit by rail these days.

It's going exactly as well as you'd imagine. I expect our power infrastructure is going to be treated exactly the same as our rail infrastructure: legacy public assets to be exploited indefinitely[0] for free[1] profit, and never invested in until failure becomes an existential threat[2]

[0] until next quarter

[1] losses are the public's problem

[2] unless the government bails you out

mono442• 24 days ago

why are they burning gas when supposedly renewables are the cheapest option?

leonidasrup7• 24 days ago

"data centres operate 24/7 with an industry standard of “five-9s” reliability—99.999% uptime, equivalent to less than 5.3 minutes of downtime per year. This level of reliability requires access to a stable and highly reliable source of electricity."

https://www.oxfordeconomics.com/resource/the-rising-challeng...

Many kinds of renewables are day/night, weather dependent, you don't get this level of reliability without a fossil fuel backup. If you already need to build a dedicated gas power plant to power your data center, then the decision to invest in an additional renewables power plant depends on the costs of the natural gas. (Additional capital expenses of the renewables power plant vs reduction in consumption of the natural gas).

US Grid Constraints: Towards 40GW+ of Behind-the-Meter Datacenter by 2028?

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