December 26, 2025

Market overview (North America | 26 Dec 2025 UTC)

AI-led capacity demand continues to pull data centre strategy closer to power development and grid execution risk. This week’s news reinforces three converging trends: (i) hyperscalers seeking vertical integration into generation and energy platforms, (ii) multi‑GW campus announcements accelerating the “power-first” site selection dynamic, and (iii) rising regulatory scrutiny and community pushback focused on rate impacts, emissions, and water.

Notable headline items include Alphabet/Google’s move to secure a dedicated power-development platform via the planned acquisition of Intersect, continued multi‑GW build signals from AWS and Vantage, and state-level policy shifts (Texas, Louisiana, Michigan) that could reshape who pays for new infrastructure and how quickly it can be approved.

Risks and watchpoints (near-term)

Power delivery and interconnection remain the binding constraint

• Large-load schedules (often 9–12 months for data centres) remain misaligned with generation lead times (~2.5–3 years), elevating stranded-capacity and curtailment risk (see cost-allocation discussion in Who should pay for electricity for new data centers).
• US interconnection queues remain a macro bottleneck, cited at nearly 2,300 GW stuck in queues (per the energy transition roundup in 2025 energy transition: breakthroughs, gridlock and supply risks).

Regulatory and litigation risk is rising around emissions, ratepayer impacts, and EJ

• Permitting appeals can materially delay “power-to-campus” projects, illustrated by the challenge to a proposed 4.4 GW gas plant intended to supply a planned 3,200‑acre data centre campus (see Pa. environmental groups appeal permit for 4.4 GW gas plant).
• Rate impact and cost socialisation risk is explicit in Louisiana’s fast-track approach where large customers may pay half of new plant costs, leaving the remainder potentially to regular customers (see Louisiana adopts fast-track power approvals for data centers).

Thermal/emissions backlash vs. reliability upside

• Reliability upside: delayed retirements and profitable peakers can reduce near-term capacity shortfalls.
• Downside: ESG/EJ pressure increases as fossil units stay online; Reuters found about 60% of PJM retirements postponed/cancelled, including multiple peakers (see Data centers revive polluting peaker power plants across U.S.).

Policy whiplash and grant cancellations add financing uncertainty

• Federal rollbacks and cancellation of funding/grants introduce variability into project economics and timelines (see Trump, AI’s thirst and Mayor Johnson’s stalled environmental ordinance and the broader clean-energy policy recap in US clean energy faces policy whiplash and mixed outcomes).

Key deals and capital commitments

Hyperscaler power vertical integration

• Alphabet agreed to acquire a clean energy developer to deepen control over power supply for Google data centres: in Alphabet to buy Intersect Power for $4.75 billion Alphabet will buy Intersect for $4.75B (cash plus existing debt). The transaction is intended to secure more electricity for Google’s data centres and includes Intersect’s development platform and team; other customer-contracted grid assets in Texas and California are excluded.
• Timing/structure detail: the acquisition is expected to close in H1 2026, with Intersect operating separately under CEO Sheldon Kimber while partnering with Google (see Alphabet to acquire Intersect for $4.75B to boost data centers).

Multi‑GW campus momentum (execution now the differentiator)

• Vantage / Oracle–OpenAI (Stargate): Vantage broke ground on its Lighthouse campus in Port Washington, Wisconsin—a four‑data‑centre development targeting 902 MW of IT capacity and driven by a $15B investment (see Vantage breaks ground on Lighthouse data center campus). The first phase is an $8B build led by Whiting‑Turner, The Weitz, Michels, and a Turner–McCarthy JV, expected by 2028.
• AWS: AWS announced a $15B, approximately 2.4 GW data centre expansion in Northern Indiana, alongside new “AWS AI Factories” (AWS-managed hyperscale AI compute inside enterprise/government facilities) and the Fastnet subsea cable (Maryland–County Cork) targeted for 2028 (see AWS accelerates AI infrastructure with AI Factories, Indiana, Fastnet).

Site acquisitions and contracted capacity (mid-market capacity build)

• Cipher Mining: in Cipher acquires 200 MW HPC-ready data center site in Ohio, Cipher acquired a 200 MW, 195‑acre “HPC-ready” site in Ohio with secured AEP Ohio capacity and PJM interconnection, scheduled to energize Q4 2027. This is Cipher’s first site outside Texas and brings its total development pipeline to 3.4 GW across eight sites.
• Nscale / WhiteFiber: in Nscale commits $865M for 10-year, 40 MW at WhiteFiber NC-1, Nscale will invest $865M for a 10‑year colocation contract for 40 MW at WhiteFiber’s NC‑1 facility (Madison, North Carolina), with staged payments starting April 2026. WhiteFiber has invested $150M and is seeking lenders to fund buildout.

Power and grid / interconnection highlights

Reliability response: peakers and delayed retirements

• PJM supply tightness appears to be prolonging the life of higher‑emitting units. Reuters reporting cited in Data centers revive polluting peaker power plants across U.S. indicates ~60% of oil/gas/coal plants slated for retirement in PJM postponed/cancelled plans this year, including 11 peakers with delayed/cancelled retirements since Jan 13.

New tools and approaches to manage grid stability at AI loads

• ORNL / UT GridEdge: ORNL and UT develop real-time Universal GridEdge Analyzer describes a device that measures high‑speed voltage/current waveforms and securely streams them for real‑time analysis; utilities in Hawaii and Texas are using it to study power electronics behavior, including stability and backup‑power events at AI data centres.

Grid build cost and capacity strategies

• RMI frames a cost-containment agenda for the coming capex cycle: US strategies to expand the grid while lowering costs highlights three strategies—deploying new clean technologies, accelerating delivery, and maximizing existing grid capacity—against a backdrop of planned $1.4T of US grid investments by 2030.
• Demand-side mitigation as a partial “release valve”: AnnDyl finds $50M residential upgrades offset 10% data center peak estimates a 200‑MW data centre could offset ~10% of peak load by investing $50M in residential efficiency upgrades, yielding ~$3M/year in customer savings (modeled in Ohio/PJM).

Policy and regulatory developments (North America)

Texas: large-load framework pushes onsite/dispatchable planning

• Texas SB 6 reshapes power strategy for large data centers notes SB 6 (effective 2025) creates a framework for loads over 75 MW and signals that large customers in ERCOT “must bring their own power” as peak demand is projected to rise >65% by 2031—supportive for onsite dispatchable, microgrid, and contracted generation strategies, but potentially increasing upfront capex and complexity.

Louisiana: accelerated approvals, but explicit ratepayer allocation risk

• The Louisiana Public Service Commission voted 4–1 to create a “lightning speed” approval pathway that can shorten power plant regulatory timelines to as little as eight months, while suspending competitive bidding and some consumer protections (see Louisiana adopts fast-track power approvals for data centers). Under this rule, large customers would pay half the cost of new plants, with the remainder potentially borne by regular utility customers—raising political and regulatory durability questions.

Michigan: legislative push to rein in incentives and resource impacts

• Michigan lawmakers introduce bills to rein in data center growth reports bills to repeal data centre tax breaks, ban NDAs for officials, limit water use, and rescind a $100M state grant for a U‑M/LANL data centre. The same item notes the MPSC approved DTE contracts for a $7B Oracle and OpenAI data centre in Saline Township.

Federal (EPA): clearer permitting resources, NSR rule revisions pending

• The EPA launched a consolidated resource page: EPA launches Clean Air Act data center resource page. The agency also flagged anticipated NSR rule revisions—proposed in early 2026 and expected to be finalized by fall 2026—to clarify “commencement of construction” under the Clean Air Act (potentially material for projects sequencing early works vs. major equipment commitments).

What to watch (next 2–8 weeks)

• Deal progression and integration implications from Alphabet to buy Intersect Power for $4.75 billion, including which assets are excluded and how the platform is used to accelerate power-to-data-centre delivery.
• Execution risk on large campus schedules (Vantage Wisconsin by 2028; AWS Indiana scale-out) and associated grid/turbine/transformer bottlenecks (see Vantage breaks ground on Lighthouse data center campus and AWS accelerates AI infrastructure with AI Factories, Indiana, Fastnet).
• Litigation/regulatory timeline for the proposed 4.4 GW Homer City gas plant and implications for similarly structured “plant-to-campus” strategies (see Pa. environmental groups appeal permit for 4.4 GW gas plant).
• Louisiana’s fast-track rule durability and whether cost allocation triggers consumer/political backlash (see Louisiana adopts fast-track power approvals for data centers).
• Texas SB 6 compliance pathways (onsite dispatchable, microgrids, hybrid contracts) for loads >75 MW (see Texas SB 6 reshapes power strategy for large data centers).
• Continued PJM retirement delays/peaker economics and the resulting ESG/EJ headwinds for data-centre-related load growth (see Data centers revive polluting peaker power plants across U.S.).