Pairing Power Projects With Data Centers: A Guide for Energy Developers

Data center load is now a major source of new electricity demand. A DOE-commissioned Lawrence Berkeley National Laboratory report found data center load growth had tripled over the past decade and projected it to double or triple again by 2028.⁵ The grid is slow to absorb it. In Berkeley Lab’s 2025 queue study, the typical project built in 2024 took 55 months from interconnection request to commercial operation, up from 36 months for projects built in 2015.⁶ Only 13% of the capacity that requested interconnection from 2000 to 2019 had reached commercial operation by the end of 2024; 77% had withdrawn.⁶

For an independent power producer, that gap is the opportunity. A developer with an operating plant, an executed interconnection agreement, or a site that can host new generation near transmission has something a data center developer cannot buy quickly. Berkeley Lab counted 408 GW of capacity with a draft or executed interconnection agreement that had not yet reached operation.⁶ The queue eased somewhat in 2025, to 2,061 GW actively seeking interconnection, a 10% drop, but timelines remained long.¹¹ Our guide to power timelines and queues covers the load side of that wait.

Most deals fall into one of three structures, and each answers differently the questions that matter to a developer: who regulates the sale, whether the load uses the transmission system, and how quickly the load can ramp.

The Talen and Amazon deal at the Susquehanna nuclear plant moved from the first structure to the second. Under the restructured agreement, Talen sells up to 1,920 MW through 2042 as a retail supplier while PPL Electric Utilities handles transmission and delivery, a structure Talen says does not require FERC approval.¹ Constellation’s 20-year agreement with Microsoft for the restarted 835 MW Crane Clean Energy Center (formerly Three Mile Island Unit 1) is a grid-connected PPA from the start: Microsoft buys the output to match its PJM data center consumption with carbon-free energy.¹² The third structure is newer. In December 2025, Alphabet agreed to acquire Intersect, a developer of co-located data center and power projects, for about $4.75 billion in cash and assumed debt, a bet on building generation and campuses together.²

For the trade-offs from the load’s side, see behind-the-meter vs. front-of-the-meter power and co-locating data centers with power plants.

Co-location became a federal issue in November 2024, when an amended interconnection service agreement for Susquehanna sought to raise the co-located load there from 300 MW to 480 MW. Two utilities objected that the arrangement would give the data center preference over the grid, and FERC rejected the amendment; it affirmed that position in April 2025, and the plant’s owners appealed to the Fifth Circuit.⁷

On December 18, 2025, FERC found PJM’s tariff unjust and unreasonable because it lacked clear, consistent terms for co-located generation and load, and ordered reforms.³ The order created three transmission service options as alternatives to network service: interim non-firm service while upgrades are built, firm contract demand service for loads that can hold their grid withdrawals to a set level using on-site generation, and a non-firm contract demand service.⁸ FERC also directed PJM to explain how generators can use provisional interconnection service, request service below nameplate capacity and use surplus interconnection service for new generation serving co-located load, and found PJM’s behind-the-meter generation rules in need of revision.⁸

The practical effect for developers is more options, not fewer obligations. A contract demand arrangement lets a project size transmission service to the load’s net withdrawals, but the load and generator must actually hold to those limits, which shapes how much on-site battery storage or backup generation the site needs.⁸

Texas took a different route. Senate Bill 6, passed in June 2025, gave the PUCT and ERCOT new tools for large loads, including a review of net metering arrangements in which a load of 75 MW or more pairs with existing generation.⁹ ERCOT describes the concern as generation being pulled out of the supply that serves everyone else.⁹

The review applies to existing generation. New generation built alongside a large load does not need to file the net metering notice, and units that registered with a co-located load at energization are exempt, as are units majority-owned as of January 1, 2025 by the load customer’s parent.⁴ In July 2026, the PUCT approved the first application under the law, in Docket No. 59220, and held that emergency curtailment of a co-located data center is not capped at the capacity of the paired generator.¹⁵ That point matters to anyone underwriting a co-located Texas deal: the load cannot assume its own plant shields it in a grid emergency. Separately, on September 18, 2026, the PUCT adopted its SB 6 large-load interconnection rule for single-site loads of 75 MW or more in ERCOT, with a flat $100,000 study fee and $50,000 per MW of financial security posted before interconnection studies.¹⁶ Our guide to Texas SB 6 covers the law’s other large-load provisions.

Data center buyers rarely take full output on day one. Campuses fill in phases, and the Talen and Amazon agreement makes that explicit: deliveries are scheduled to ramp over years, depending on how fast AWS builds.¹ Developers should model offtake against a ramp schedule and decide who takes the unsold energy and capacity in the early years.

Terms that carry the most risk

• Term and extension rights: 20-year terms appear in major nuclear deals, and the Talen agreement runs through 2042.¹¹²
• Ramp and minimum take: who pays if the campus fills more slowly than planned.
• Shape and firmness: whether the product is unit-contingent output, a fixed shape, or firm supply backed by storage or gas.
• Curtailment and emergency rules: how grid-operator curtailment is shared, especially in ERCOT after the first SB 6 order.¹⁵
• Credit support and assignment: the buyer is often a project entity, not the parent company.

Our guide to power purchase agreements for data centers goes deeper on contract structures.

Many new pairings combine resources: solar or wind for energy, batteries for shaping, and gas for firm capacity, all sized to the campus. Gas is where the bottleneck shows. Entering the first quarter of 2026, GE Vernova had roughly 10 GW of 2029 gas turbine production still available, and about 20% of the 100 GW it had under contract was tied directly to data center load.¹⁰ Berkeley Lab also recorded active natural gas capacity in interconnection queues rising 72% in 2024, to 136 GW.⁶ A developer with turbine slots, a gas lateral route and air permits in hand has a real advantage; see gas turbines vs. reciprocating engines.

A hybrid site also has to work as a data center site, which is where power developers are most often surprised. The campus needs large, flat, buildable acreage outside floodplains, water or a dry-cooling plan, diverse fiber routes, and zoning that allows both uses. A parcel that is excellent for a solar project can fail on fiber or on the county’s appetite for data centers.

1. 01Inventory what you can offer: operating units, interconnection agreements, surplus capacity, land and turbine or transformer positions.
2. 02Pick the structure first, then the counterparty: behind the meter, grid PPA or new-build park each has different regulators and timelines.⁴⁸
3. 03Check the market’s current rules: the PJM compliance outcome and FERC’s large-load proceedings, or SB 6 notice, study and interconnection requirements in ERCOT.⁹¹³
4. 04Screen the land for data center use, not just generation: acreage, flood, water, fiber and zoning.
5. 05Model the ramp and the unsold early-year output before agreeing to price.¹
6. 06Talk to the utility early; even a co-located load usually needs its cooperation. Our utility guide shows what they look for.

If you have a site where generation and a campus might fit together, you can get a site reviewed against the full set of data center criteria.