Infrastructure Intelligence No. 01: The Data Center Business Is Becoming the Power Business
Updated: Sep 29
Energy. Power. Development. Capital.
September 2, 2026 | Issue No. 01
THE WEEK IN INFRASTRUCTURE
The convergence of digital infrastructure and energy infrastructure continues to accelerate.
This week's developments reinforce a fundamental shift underway across the U.S. infrastructure market: access to land and capital alone is no longer enough to make a major data center, industrial or energy project viable. Power availability, interconnection strategy, generation, transmission capacity, equipment procurement and increasingly supply-chain security are determining where projects can actually be built and how quickly they can reach operation.
That reality moved further into federal policy this week with Executive Order 14421, which declared a national emergency related to threats involving foreign-sourced equipment in the U.S. bulk-power system. The order explicitly connects grid security to rapidly expanding electricity demand from data centers, artificial intelligence, advanced manufacturing and defense production.
For developers, the competitive advantage is increasingly becoming speed-to-power, coupled with certainty of execution.
01 | THE LEAD
The Data Center Business Is Becoming the Power Business
The race to build AI infrastructure is creating an increasingly direct relationship between data center development and energy development.
NVIDIA and Cloverleaf Infrastructure recently announced a strategic partnership focused on advancing data center infrastructure in the United States. Cloverleaf's model is particularly notable because the company develops the power, land and supporting infrastructure required for large computing campuses.
Elsewhere, developers continue advancing concepts that combine large-scale data center campuses with dedicated energy infrastructure, including natural gas generation, battery storage and potentially advanced nuclear power.
Different projects are pursuing different architectures, but the underlying development trend is increasingly clear.
The traditional sequence of identifying a data center site and subsequently determining how to serve its electrical load becomes increasingly difficult as loads move into the hundreds of megawatts and ultimately gigawatts.
Developers are instead being forced to evaluate land, generation, transmission, interconnection, fuel availability, storage and equipment procurement as components of a single infrastructure strategy.
Developer Takeaway
For large-load development, "power available" and "power developable" are becoming two very different things.
A site near transmission infrastructure does not necessarily have access to the capacity required to serve it.
The strongest development opportunities will increasingly be those with multiple credible pathways to power: utility service, transmission access, behind-the-meter generation, energy storage and potentially dedicated generation assets.
Energy feasibility therefore needs to move much earlier in the development process.
02 | POLICY & GRID SECURITY
EO 14421: Grid Security Moves Into the Development Equation
President Trump signed Executive Order 14421 on August 26, declaring a national emergency related to foreign involvement in equipment used within the U.S. bulk-power system.
The order identifies two interconnected concerns: potential cybersecurity vulnerabilities associated with certain foreign-produced electrical equipment and the broader national-security risk created by dependence on foreign sources for critical grid components.
Importantly for infrastructure developers, the Administration directly connects the urgency of grid security to rapidly growing electricity demand from data centers, artificial intelligence, advanced manufacturing and defense production.
EO 14421 gives the Secretary of Energy authority to prohibit or restrict certain acquisitions, imports, transfers and installations of bulk-power system electric equipment when foreign involvement creates an unacceptable national-security risk. It also provides authority for mitigation involving certain equipment already installed within the U.S. power system.
The order further directs the Department of Energy toward establishing criteria for identifying pre-qualified equipment and vendors and calls for federal procurement policies favoring domestically produced bulk-power equipment.
Implementation now becomes critical. The Secretary of Energy is directed to issue rules or regulations implementing portions of the order within 120 days.
Developer Takeaway
EO 14421 potentially moves electrical-equipment provenance from a procurement consideration into a development consideration.
For developers of data centers, generation facilities, substations and other major electrical infrastructure, diligence may increasingly need to address not only: Can we procure the equipment? But also: Where was it manufactured, who controls its supply chain, will it satisfy emerging federal requirements, and can compliant equipment be delivered within the project's required schedule?
That distinction could become particularly important for transformers, switchgear, control systems and other critical electrical infrastructure.
03 | POWER & GRID
ERCOT's Large-Load Challenge Comes Into Focus
Texas continues to provide one of the clearest examples of the collision between extraordinary load growth and grid development.
ERCOT's evolving framework for large-load interconnection reflects the scale of the challenge. Its new Batch Zero process evaluates qualifying large-load requests of 75 MW or greater together, allowing ERCOT to assess available capacity, system impacts and required transmission improvements across competing projects.
This represents an important shift.
That process is currently paused. On August 3, Governor Greg Abbott directed the Public Utility Commission of Texas and ERCOT to conduct a comprehensive verification and audit of data center projects moving through interconnection before additional projects advance. ERCOT subsequently missed its August 7 deadline to notify service providers of Batch Zero classifications and sought a good-cause exception from the PUCT.
ERCOT has indicated the verification will take several months but fewer than nine, and is targeting completion of the audit by December 10. Until it concludes, Batch Zero timelines should be treated as unsettled.
For developers, transmission proximity alone is increasingly an inadequate measure of site viability.
A location can appear electrically attractive on a map while facing substantial limitations from existing system loading, competing interconnection requests, required transmission upgrades or generation availability.
Developer Takeaway
For Texas data center and industrial developers, interconnection is becoming a development discipline of its own.
Early-stage diligence increasingly needs to understand:
available system capacity
competing large-load requests
transmission upgrades
generation availability
interconnection study requirements
energization timing
the commercial consequences of waiting for utility service
These considerations can materially affect land value and development strategy before substantial capital is committed to a site.
FERC Pushes Grid Operators on Large Loads
The federal regulatory framework is evolving as well.
FERC has directed the six regional transmission organizations and independent system operators under its jurisdiction to address how data centers, advanced manufacturing facilities and other large electrical loads connect to the transmission system.
The rapid emergence of multi-hundred-megawatt and gigawatt-scale loads is forcing grid operators and regulators to confront processes that historically were not designed around loads of this magnitude or development velocity.
Questions surrounding cost allocation, generation co-location, transmission service and responsibility for system upgrades are therefore becoming increasingly important to project development.
Developer Takeaway
Large-load developers should expect interconnection rules to remain fluid.
Site selection and project underwriting should account for regulatory risk, study requirements, potential system upgrades and changing cost-allocation rules rather than assuming today's interconnection framework will remain unchanged throughout development.
04 | DATA CENTER / MISSION CRITICAL
Power Self-Sufficiency Is Becoming a Development Advantage
A significant policy and commercial trend is emerging around a basic question: Who should pay for the infrastructure required to serve extremely large electrical loads?
Utilities and policymakers increasingly face pressure to ensure that existing ratepayers are not required to subsidize generation and transmission infrastructure constructed primarily to serve new hyperscale data centers.
That is creating greater interest in dedicated generation, bring-your-own-power strategies, energy storage and hybrid utility and behind-the-meter architectures.
For developers, this changes the definition of a power strategy.
The question is no longer simply whether the utility can ultimately provide service. It is whether a project can demonstrate a credible, financeable and executable pathway to its required power within the development schedule.
Developer Takeaway
Large-load developers increasingly need to answer three questions early: Where will the power come from? Who will pay for the infrastructure required to deliver it? When can that infrastructure actually be operational?
Projects capable of answering those questions early may have a significant advantage in utility negotiations, financing, permitting and ultimately speed-to-market.
05 | ENERGY INFRASTRUCTURE
Battery Storage Moves Deeper Into Mission-Critical Power
Battery energy storage continues moving beyond its traditional role alongside renewable generation.
For mission-critical infrastructure, BESS can potentially perform several functions within the same energy architecture: resilience, peak management, grid services, backup support and integration with on-site generation.
The continuing expansion of data center loads is making this flexibility increasingly valuable.
Storage alone generally cannot solve the sustained energy requirements of a hyperscale campus. But when combined with utility service and dedicated generation, it can become an important component of a more resilient and flexible power architecture.
Developer Takeaway
The relevant question is increasingly not simply whether a project should include storage. It is what role storage should perform within the project's overall energy architecture.
Generation, storage, utility service and backup power should increasingly be evaluated as an integrated system rather than as independent equipment decisions.
06 | EQUIPMENT & SUPPLY CHAIN
The Equipment Bottleneck Is Becoming a Development Constraint
Power availability isn't only a grid problem. It is also an equipment problem.
As developers pursue new generation and transmission infrastructure to support rapidly growing electrical demand, transformers, turbines, switchgear, generators and other critical equipment can become part of the project's critical path.
This becomes particularly important when developers consider behind-the-meter generation as a strategy for accelerating energization.
A technically feasible generation solution does little to improve speed-to-power if critical equipment cannot be manufactured and delivered within the development schedule.
EO 14421 potentially adds another dimension to this challenge by increasing scrutiny of the origin and security of equipment entering the U.S. bulk-power system.
Developer Takeaway
Procurement strategy is becoming development strategy.
Developers evaluating dedicated generation and major electrical infrastructure should understand equipment availability, manufacturing origin and procurement timing at the same stage they evaluate interconnection, gas supply, permitting and financing.
In today's market, equipment strategy can influence project schedule almost as much as engineering.
07 | CAPITAL & DEAL FLOW
Development Certainty Is Becoming Part of the Capital Stack
The extraordinary capital requirements associated with AI and digital infrastructure are creating increasingly complex financing structures.
Data center development now frequently requires capital not only for the computing campus itself, but also for substations, transmission improvements, dedicated generation, storage, cooling infrastructure and other supporting systems.
As a result, investors and lenders increasingly need confidence in more than tenant demand or projected computing requirements. They need confidence that the infrastructure can actually be delivered.
Power availability, permitting, interconnection schedules, equipment procurement and construction execution can therefore become material financing considerations.
Developer Takeaway
Capital remains available for compelling infrastructure opportunities. But increasingly, development certainty is itself becoming part of the capital stack.
A project with a credible pathway through land, power, permitting, interconnection, procurement and construction may command a fundamentally different risk profile than an otherwise attractive site that has not resolved those questions.
08 | THE INTERCONNECTION DESK
ERCOT
Batch Zero represents an important new framework for evaluating qualifying large loads of 75 MW and greater. Developers should closely watch how available capacity, competing requests and transmission-upgrade responsibility emerge through the process. The process is currently suspended pending the state-directed data center audit, with ERCOT targeting completion by December 10.
PJM
Rapid load growth continues to drive consideration of new approaches for bringing generation onto the system and serving major new loads. The interaction between generation interconnection and large-load development remains particularly important.
FERC
Large-load interconnection has become a national regulatory issue. Federal proceedings involving regional grid operators could materially influence how data centers and other major loads obtain transmission service and how associated infrastructure costs are allocated.
09 | ON OUR RADAR
EO 14421 Implementation
The Executive Order itself is only the beginning. DOE implementation, vendor qualification standards and the treatment of specific equipment categories could have meaningful implications for infrastructure procurement.
Bring Your Own Power
Expect more data center developments to combine utility service with dedicated generation, storage and other behind-the-meter resources.
Transmission Before Transformation
The AI infrastructure boom ultimately depends upon physical electrical infrastructure. Transmission and substation capacity may increasingly determine which announced campuses become operating assets.
Equipment Becomes Strategy
Transformers, turbines, switchgear and other long-lead equipment are moving upstream in the development process. Developers that understand procurement early may gain months, or potentially years, over projects that wait until final engineering to address equipment availability.
THE INTERFACE VIEW
The infrastructure market is undergoing a fundamental convergence.
Energy projects are becoming digital-infrastructure projects. Data center projects are becoming energy projects.
At the same time, grid security and equipment supply chains are becoming development considerations rather than downstream procurement issues.
All three trends point toward the same conclusion. The next generation of infrastructure development will require earlier integration of land, power, interconnection, engineering, procurement, capital and execution.
The competitive question is no longer simply: Where can we build?
It is: Where can we build, power, finance and execute with certainty?
That distinction is increasingly likely to separate projects that are announced from projects that actually get built.
Interface Holdings and Development Firm
Building the Future of Infrastructure Through Strategy, Capital, and Integration.
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