Data center demand is moving from forecast to friction. It’s showing up in plant deals, turbine backlogs, utility spending, and customer bills. This issue: PJM’s first real capacity tug-of-war with hyperscalers, China’s overstated power advantage, a $1.4T utility buildout, and the supply chain quietly setting the pace of everything.
The Lede
CAPACITY MARKETS
PJM Monitor Warns Gas Plants Could Exit Market for Data Centers
PJM’s market monitor is pushing FERC to block a 1,267 MW gas plant deal, arguing the buyer could redirect those plants away from PJM’s capacity market to serve co-located data centers.
Assets: 677 MW (IL) + 590 MW (OH)
Buyer tied to a data center + energy campus redevelopment
Concern: capacity pulled from PJM → tighter supply → higher prices
This comes as PJM tightens rapidly under data center pressure. Nationally, more than 780 GW of data center projects have been announced against a grid with ~760 GW of peak load. Most of that won’t get built, but even partial realization is enough to strain capacity markets.
ERCOT modeling gives a preview: adding 10 GW of large load without sufficient transmission can push prices up ~34% and drive congestion costs up nearly 5x.
GridTake
The old model assumed generation served the market. The new one is testing whether generation can be pulled out of it. If large loads can secure dedicated capacity, the shared system gets tighter and more expensive by default.
Things to Read
New York Times — America’s Grid Is Not Ready for What’s Coming
A wide-angle look at the grid finally making its way into mainstream coverage. Long, but useful for how the story is being framed publicly.The Economist — Global Energy Markets Are on the Verge of a Crisis
A reminder that electricity markets don’t operate in isolation. Fuel constraints and geopolitics still sit underneath everything.Commonwealth Fusion Systems — First Fusion Company Files to Connect to PJM
Filed to connect to PJM. Fusion isn’t commercial, but it’s entering the same queues as everyone else. That shift matters.Fortune — Americans Are Starting to Turn on Data Centers
Public sentiment around data centers is evolving. Jobs still win, but rising electricity costs are starting to register.Washington Post — The AI Boom Is Reviving Nuclear Ambitions
A nuclear plus AI narrative that captures both the ambition and the friction. The timelines remain the quiet issue.Times of India — New Fuel Cell Turns Coal Directly Into Electricity
Experimental coal-to-electricity fuel cell. Interesting concept, early-stage reality.Yahoo Tech — AI Systems Are Advancing Faster Than Expected
Another look at AI acceleration. Worth reading alongside the power demand conversation it implies.Herald Review — Want Lower Electricity Prices? Build More Power
A simple thesis that keeps resurfacing. If supply doesn’t scale, prices will.
Major Stories
GLOBAL COMPETITION
Oxford: China’s Data Center Power Advantage Is Narrower Than It Looks
A new Oxford Institute report finds China’s edge in AI infrastructure is real, but mostly about execution speed, not superior energy economics.
Data center demand: ~200 TWh (2023) → 300–600 TWh by 2030
~11 million racks deployed (up from 3M in 2019)
Power prices: competitive with U.S., not dramatically cheaper
Western relocation policies cut costs just 4–12%
The constraints are familiar: fragmented regional grids, limited long-distance transmission, and difficulty moving renewable power from interior regions to coastal demand centers.
GridTake - China builds faster. The U.S. allocates more efficiently. Both systems are hitting limits, just in different places. The advantage will go to whoever solves their bottleneck first.
TAX POLICY
Republicans Move to Extend Clean Energy Credits
A new House bill would extend key credits including 45Y (production) and 48E (investment), reversing accelerated phaseouts.
$34.8B in clean energy investments canceled in 2025
Developers citing policy uncertainty as a primary risk
Low probability near-term, but politically alive
The argument is straightforward: shorten the policy runway and projects stall. The counterargument is less discussed: extending incentives continues to tilt investment toward intermittent generation.
GridTake - This keeps capital flowing where policy points it. The issue is that the system’s binding constraint right now is firm capacity, not incremental solar output.
UTILITY FINANCE
Utilities Plan $1.4 Trillion in Grid Investment
A PowerLines report finds U.S. utilities are planning $1.4 trillion in capex through 2030.
Spending up 21% year-over-year
$31B in rate increases requested in 2025 alone
Electricity bills up ~40% since 2021
Nearly half of spend going to transmission and distribution
Data centers are a major driver. 32 of 51 utilities explicitly cite large-load growth, with some forecasts doubling in just a few years. AEP, for example, now expects 56 GW of load by 2030, with nearly 90% tied to data centers.
GridTake - This is the largest coordinated grid buildout in decades. The question isn’t whether investment is needed. It’s whether the structure ensures it’s disciplined, or simply passed through.
POWER PRICING
EIA: Electricity Prices Up 9% Year Over Year
U.S. electricity prices rose to 14.36¢/kWh in February, up 9% from last year. Hot spots:
Virginia: +26.3%
Ohio: +21.9%
Pennsylvania: +19.5%
All sectors saw increases, led by transportation (+23.6%). Demand rose across most states, while generation shifted modestly toward natural gas.
This is showing up most clearly in regions absorbing new load, particularly data centers and electrification growth.
GridTake - Load growth is no longer a theoretical tailwind. It’s landing unevenly, and prices are adjusting in real time where the system is least prepared.
SUPPLY CHAIN
Gas Turbine Backlog Hits 100 GW as Demand Surges
GE Vernova’s turbine backlog has reached 100 GW, reflecting a surge in demand for dispatchable generation.
Up from 83 GW last quarter
Prices rising 10–20%
Lead times extending into multiple years
Gas remains the fastest scalable firm resource, but the supply chain is now a constraint in itself.
GridTake - The industry spent a decade underbuilding firm capacity. Now everyone wants it at once. The constraint has moved from policy to hardware.
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Quick Signals
Capacity is becoming bilateral — Large loads are starting to secure supply directly
Announcements ≠ buildout — 780 GW of data centers will be filtered by power and interconnection
China’s edge is speed — The U.S. advantage remains in markets, not execution
Capex is accelerating fast — $1.4T doesn’t stay invisible on bills
Price spikes are regional first — Load-heavy states are feeling it early
Gas is constrained too — Turbines are now a gating factor
Transmission still decides outcomes — Without it, price signals do the balancing
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