US Data Center Briefing · January 18, 2026

January 18, 2026

PJM proposals shift new-build funding toward data centres EPA air-permit enforcement risk for portable/temporary turbines Onsite generation scrutiny at xAI Memphis (turbines, NOx impacts) Nuclear PPAs/SMR offtake re-emerge for AI load growth Local permitting and community pushback in Michigan for large campuses

Top news (3)

PJM market redesign aimed at making hyperscale load pay for new generation: The White House plus 13 governors urged PJM to run an auction offering 15-year contracts so data centre operators fund new power plants, and to extend a wholesale payment cap through mid-2028. PJM also floated emergency curtailment mechanisms for large users and faster interconnection proposals (US urges PJM to make data centers fund new power plants).
EPA tightens air-permitting expectations for “portable/temporary” gas turbines: The EPA clarified that methane gas turbines— even if temporary/portable—require air permits, raising regulatory risk for data centre buildouts using trailer-mounted generation. This is directly linked to scrutiny at xAI’s Memphis site (EPA rules xAI Memphis data centre used illegal power).
Nuclear resurfaces as a credible supply option for AI-driven demand growth: At an IAEA convening, tech and nuclear stakeholders discussed scaling nuclear amid projected electricity demand growth of >10,000 TWh by 2035. Recent examples cited include Microsoft’s 20-year PPA to restart Three Mile Island Unit One and Google’s agreement to buy energy from multiple SMRs targeting operation by 2030 (AI drives renewed push for expanded nuclear power capacity).

Key deals & projects (by region)

United States

xAI (Memphis, TN) – “Colossus” data centre build and onsite generation
- EPA ruled xAI operated up to 35 unpermitted methane gas turbines at its Memphis Colossus data centre; EPA clarified that portable/temporary turbines require air permits (EPA rules xAI Memphis data centre used illegal power).
- Site details disclosed in the story:
  - Colossus 1 load:150 MW
  - Delivery speed: built in 122 days (2024)
  - Expansion: references to Colossus 2 and MACROHARDRR, which “may need up to 2 GW”
Michigan – community and regulatory pushback around large campuses
- DTE Energy accepted commission conditions to power a proposed 1.4 GW OpenAI and Oracle data centre in Saline Township, while Michigan AG Dana Nessel and others requested a rehearing of the approval (Michigan communities debate rapid expansion of large data centers).
- Multiple municipalities cited as debating/pausing/opposing large data centre projects over energy, water, zoning, and community concerns: Lyon Township, Saginaw, Lansing, Van Buren Township, Allen Park (Michigan communities debate rapid expansion of large data centers).

Global (nuclear contracting examples referenced)

Microsoft – nuclear-backed supply: cited as signing a 20-year PPA to restart Three Mile Island Unit One (AI drives renewed push for expanded nuclear power capacity).
Google – SMR offtake: cited as agreeing to buy energy from multiple SMRs with an aim for operation by 2030 (AI drives renewed push for expanded nuclear power capacity).

India

System demand and buildout context relevant to data centre power planning:
- Record peak demand:242.49 GW (FY 2025–26)
- Total installed capacity:509.743 GW (as of 30 Nov 2025)
- Non-fossil share:51%, stated as meeting India’s NDC target five years early (India hits record 242.49 GW demand, boosts renewables share).

Power, grid & interconnection highlights

PJM (US): capacity procurement, curtailment risk, and interconnection acceleration

Policymaker proposal:
- A requested PJM auction for 15-year contracts designed so data centres fund new power plants (US urges PJM to make data centers fund new power plants).
- Request to extend a wholesale payment cap through mid-2028 (US urges PJM to make data centers fund new power plants).
PJM response concepts flagged:
- A formula to cut power to large grid users (including data centres) during emergencies
- Proposals to fast-track interconnection (US urges PJM to make data centers fund new power plants).

Michigan (US): utility service conditions for hyperscale load

DTE Energy accepted commission conditions to serve a proposed 1.4 GW campus for OpenAI and Oracle in Saline Township, but the approval is being challenged via a rehearing request (Michigan communities debate rapid expansion of large data centers).

India: transmission capex and grid expansion

Inter-state transmission projects approved:₹38,849 crore
Transmission added:6,511 circuit km
Additional power-system actions cited: commissioning Parbati-II (800 MW) and approval of Tato-II (700 MW) (India hits record 242.49 GW demand, boosts renewables share).

Policy & regulation

United States: air permitting for onsite generation at data centres

EPA determination affecting “behind-the-meter”/temporary generation tactics:
- EPA ruled xAI ran up to 35 unpermitted methane gas turbines at its Memphis data centre, reinforcing that portable/temporary turbines require air permits (EPA rules xAI Memphis data centre used illegal power).
- EPA estimated up to 296 tons of NOx reductions annually by 2032 under the clarified approach (EPA rules xAI Memphis data centre used illegal power).
- The ruling followed an NAACP lawsuit and advocacy by SELC (EPA rules xAI Memphis data centre used illegal power).

Austria (EU): critical infrastructure resilience framework

Austria published a national risk analysis and the Austrian Resilience Strategy (ÖSRKE) (Jan 2026), implementing the Resilience Kritischer Einrichtungen Gesetz (RKEG) adopted in Oct 2025 (Austria publishes national risk analysis and resilience strategy).
Described as a binding, BMI-led framework to protect vital services—explicitly including digital infrastructure—against natural hazards, prolonged power outages, sabotage and hybrid threats (Austria publishes national risk analysis and resilience strategy).

United States (local): permitting and community constraints

Michigan municipalities are actively debating/pausing/opposing large data centre proposals due to energy, water, zoning, and community concerns—a reminder that entitlement timelines can be as material as interconnection timelines (Michigan communities debate rapid expansion of large data centers).

2-line wrap

Policy and market design are tightening around hyperscale load—both via who pays for new generation (PJM) and how onsite turbines are permitted (EPA).
At the same time, the supply conversation is widening, with nuclear (large and SMR) increasingly positioned as an option for AI-driven demand growth.