Infrastructure Intelligence No. 05: Capacity Is Becoming Development Strategy

Energy. Power. Development. Capital. | September 29, 2026 | Issue No. 05

THE WEEK IN INFRASTRUCTURE

For much of the past year, the infrastructure market has treated power as something developers either have or do not have.

That view is beginning to look too simple.

This week, the U.S. Department of Energy selected 31 transmission projects across 26 states that it expects could unlock more than 23 GW of additional electricity capacity, largely by getting more capability from infrastructure that already exists. The projects would reconductor or rebuild more than 1,500 miles of transmission and deploy Grid-Enhancing Technologies across nearly 21,000 miles.

At the same time, California ISO advanced a draft framework designed to allow certain large loads to connect under flexible interim service while broader transmission solutions are developed. AI customers are directly backing purchases of generation, BESS and electrical equipment before long-term power agreements are finalized. And new development financing structures are being built specifically to support interconnection deposits, utility obligations and equipment collateral.

The emerging lesson is important:

Power capacity is not always a fixed number. Increasingly, it can be engineered, financed and developed.

01 | THE LEAD

The Fastest New Megawatt May Already Be on the Grid

On September 24, DOE announced its intention to help fund 31 grid-improvement projects across 26 states through the Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades initiative, or SPARK.

The total investment is expected to reach approximately $5.25 billion, including $1.9 billion of federal funding and $3.35 billion of recipient cost share. DOE expects the selected projects to make more than 23 GW of additional electricity capacity available.

What makes SPARK particularly relevant to developers is how that capacity is being created.

Rather than relying primarily on entirely new transmission corridors, the program emphasizes replacing existing conductors with higher-capacity technology, deploying advanced transmission systems and using existing rights-of-way more effectively.

One of the program's topic areas is directed specifically at transmission that facilitates new large loads. These are selections, not awards: no funding has yet been awarded, and DOE expects formal awards between October 2026 and January 2027.

That changes the way transmission capacity should be evaluated.

A constrained line today may not remain constrained if reconductoring, dynamic line ratings or other advanced transmission technologies are already funded and moving toward construction.

Developer Takeaway

Site diligence should increasingly examine where transmission capacity is going, not simply where it exists today.

Developers evaluating hyperscale campuses, industrial facilities or generation projects should understand the utility's transmission plan, reconductoring program, Grid-Enhancing Technology deployment, planned substation work and regional reliability upgrades.

A parcel adjacent to a constrained corridor may look unattractive based on today's system.

The same site could look very different if 1 GW of incremental transfer capability is already moving through engineering and procurement.

Transmission-upgrade intelligence is becoming site-selection intelligence.

03 | POWER & GRID

CAISO Moves Flexible Interconnection Closer to the Tariff

The California ISO milestone flagged in Issue No. 04 has arrived. On September 24, CAISO published its draft final Large Loads Initiative proposal and draft tariff language. Both are drafts: neither has been approved by CAISO's Board, and nothing has been filed with FERC.

The proposal addresses large-load visibility, new technical standards, cost-shift protections, co-located facilities and electrically proximate loads. Most importantly for developers, it retains a framework for Flexible Interim Load Interconnection, or FILI, intended to expedite large-load interconnection.

CAISO says the draft final proposal now includes additional detail around FILI operating requirements and the relationship between load-interconnection studies and the transmission-planning process. A permanent flexible-load interconnection option and proximate load and generation arrangements have been deferred to later stakeholder processes.

The draft proposal is scheduled for stakeholder discussion on October 1, the draft tariff language for a separate meeting on October 19, and comments are due October 15. CAISO currently anticipates taking the initiative to its Board of Governors on October 28.

Developer Takeaway

A flexible service arrangement can potentially create an entirely different path to energization.

But "flexible power" only becomes valuable when the operating conditions are clearly understood.

Developers need to know how much load can be curtailed, how frequently, for how long, what telemetry and control systems are required and what infrastructure ultimately converts interim service into firm service.

That makes flexibility a design and underwriting issue, not simply a utility-contract issue.

The question is no longer only, "When can we receive 300 MW?" It may also be, "What service can we receive before the complete 300 MW system is ready?"

04 | DATA CENTER / MISSION CRITICAL

Samsung Puts $1 Billion Behind the Integrated AI Infrastructure Model

On September 29, Samsung Electronics and five Samsung affiliates announced a combined $1 billion investment in Helix Digital Infrastructure.

Samsung Electronics is contributing $500 million, with Samsung C&T, Samsung SDS, Samsung SDI, Samsung Life Insurance and Samsung Fire & Marine Insurance providing the balance.

Helix was launched by KKR in June with more than $10 billion of initial long-duration committed capital, alongside founding investors including the Kuwait Investment Authority, NVIDIA and Vistra. Former AWS CEO Adam Selipsky leads the company.

What distinguishes the platform is its scope.

Helix is designed to coordinate hyperscale data-center development, generation, transmission and distribution infrastructure, and fiber connectivity within a single AI-infrastructure platform. Samsung's own businesses add semiconductor technology, EPC capability, data-center design and operations, cooling systems, UPS equipment and battery technology to that ecosystem.

That is a meaningful signal about where AI infrastructure development is heading.

The market is beginning to place significant institutional capital behind the idea that compute cannot be developed independently from the physical infrastructure supporting it.

Developer Takeaway

The competitive unit is increasingly becoming the infrastructure platform, not merely the data-center building.

Land, power, generation, substations, transmission, fiber, cooling, equipment procurement and capital all have to arrive on compatible schedules.

That creates opportunity for firms capable of coordinating multiple disciplines across the development lifecycle.

The industry is moving away from:

Find land → build facility → obtain power.

It is moving toward:

Control the infrastructure stack → deliver compute.

05 | ENERGY INFRASTRUCTURE

Behind-the-Meter Power Moves Toward Portfolio Scale

AB Energy USA said September 28 that it has now secured approximately 2 GW of U.S. data-center power projects across five onsite developments in Texas and Oklahoma.

The projects use AB's modular ECOMAX systems with INNIO Jenbacher gas engines. Some are also expected to incorporate battery storage, while AB's architecture can use engine waste heat through absorption chillers to produce chilled water for data-center cooling.

The significance is less about one equipment vendor than the scale of the deployment model.

Behind-the-meter generation is no longer appearing only as a temporary bridge while a utility connection is completed.

Developers are increasingly evaluating onsite generation as a repeatable component of the permanent campus power architecture.

That requires treating the power plant as part of the development itself: fuel supply, air permitting, emissions controls, BESS integration, switchgear, transformers, controls, noise, cooling and O&M must all be incorporated into the site plan.

The Supply Chain Is Moving Ahead of the PPA

Atlas Energy Solutions provided another indication of how early that process is beginning.

On September 25, Atlas disclosed agreements with what it described as a leading frontier AI lab to reimburse costs associated with purchasing long-lead equipment for specific data-center power projects.

One agreement covers balance-of-plant equipment including electrical distribution systems, emissions controls and BESS. Another backs an incremental 283 MW of Caterpillar generation equipment for the initial power ramp of a separate data-center project. Atlas also disclosed a separate purchase for 328 MW of generating capacity for 2027 deliveries.

The long-term PPAs for those projects have not yet been executed, according to Atlas.

But the customer is already supporting equipment procurement.

Developer Takeaway

That sequence is worth watching closely.

In a market constrained by generator availability, transformers, switchgear and electrical equipment, waiting for every project agreement to be completed before reserving equipment can create its own development risk.

For sufficiently credible projects, equipment reservation is becoming a pre-NTP development activity.

The future critical path may increasingly begin at the factory rather than the construction site.

06 | EQUIPMENT & SUPPLY CHAIN

Electrical Infrastructure Starts Moving From Engineered-to-Order to Configured-to-Order

Schneider Electric unveiled a software-defined medium-voltage switchgear architecture on September 28 aimed specifically at high-density data-center applications.

The company's approach separates more of the protection, metering and control functionality from customized physical hardware, allowing standardized equipment to be configured through software. Schneider says its comparison testing showed up to 3× faster ordering and manufacturing and up to 2× faster commissioning and onsite acceptance testing than conventional engineered-to-order systems. The architecture is operating in a pilot at a live Equinix colocation facility, according to Schneider. Pilots are expected to run through 2027, with broad availability expected in 2028.

Those performance figures are Schneider's own, and broader deployment will determine how much schedule compression can actually be achieved across the market.

But the direction matters.

Developer Takeaway

Electrical procurement remains one of the largest schedule risks in power-intensive development.

Anything that moves equipment from bespoke engineering toward standardized, configurable architectures has the potential to reduce engineering cycles, procurement uncertainty and commissioning time.

AI may be driving extraordinary electricity demand.

It is also forcing the electrical equipment industry to rethink how fast infrastructure itself can be manufactured and deployed.

07 | CAPITAL & DEAL FLOW

Development Capital Is Following the Interconnection Deposit

Hut 8 announced September 28 that it closed a $1.07 billion four-year senior secured revolving credit facility.

The most interesting feature may not be the headline amount.

The facility includes a $1.07 billion letter-of-credit sublimit specifically capable of supporting development collateral, including interconnection deposits and obligations to utilities and equipment vendors.

That allows Hut 8 to avoid tying up the same amount of cash while projects move through development. The facility sits alongside $7.5 billion of non-recourse project financing, previously announced, for its River Bend and Beacon Point AI data-center campuses.

The theme is not limited to the United States.

On September 24, VIRTUS Data Centres announced a £2.45 billion financing package, including a £1.2 billion green capex facility with term and revolving components, to support expansion across the UK and Europe, including its planned 78 MW Saunderton campus.

Developer Takeaway

Infrastructure capital is moving upstream.

Interconnection deposits, utility security, generator deposits, transformers, switchgear and site-development obligations can consume hundreds of millions of dollars before conventional construction financing is fully available.

Platforms capable of carrying those obligations without immobilizing cash have a significant execution advantage.

The capital stack increasingly needs a dedicated layer for development liquidity, followed later by project-level construction and permanent financing.

Power development is becoming balance-sheet intensive long before the first building goes vertical.

08 | THE INTERCONNECTION DESK

PJM

PJM's proposed Large Load Registry and Interim Resource Adequacy Service remain pending before FERC and have not been approved.

On September 23, PJM filed another answer in Docket ER26-3515 and asked FERC to accept the related tariff and Reliability Assurance Agreement changes effective no later than October 12. That is the date PJM has requested, not one FERC has set.

If approved, the registry would provide PJM with more detailed information on large-load locations, megawatt requirements and whether new customers are bringing new supply. PJM says the underlying registry tool is expected to be ready January 1, 2027, with aggregated public information expected beginning in March 2027. IRAS is intended to establish one framework for large loads bringing their own supply and an alternative service structure for loads that do not.

The significance is straightforward:

Resource adequacy is becoming part of load-interconnection eligibility.

ERCOT

Texas is expanding large-load scrutiny further down the demand curve. The State and Community Impact RFI, introduced in Issue No. 03 and followed in Issue No. 04, now has a route in for smaller projects.

ERCOT announced September 24 an intake process through which newly substantiated data-center projects of 25 MW to less than 75 MW may voluntarily request participation. ERCOT issues the RFI to such a project only once it asks. Requests are due October 5, with responses due October 12.

The broader RFI applies to developers of data centers of at least 25 MW pursuing ERCOT interconnection and asks about grid dependence, onsite generation, water use, cooling, incentives, ownership and community impacts. ERCOT plans to publish a report, in collaboration with the PUCT, on or before December 10.

This indicates that the definition of a strategically significant large load is becoming smaller.

A 40 MW development may not be hyperscale.

But it is large enough to attract state-level infrastructure scrutiny.

CAISO

CAISO's October 1 Large Loads Initiative meeting now becomes one of the most important near-term interconnection events to watch.

Its draft framework connects three issues that have often been treated separately: speed to power, cost responsibility and operational flexibility.

How those concepts ultimately appear in tariff language could influence large-load frameworks well beyond California.

09 | ON OUR RADAR

PJM's Co-Located Load Workshop, September 30

PJM is holding a Co-Located Load Order Workshop on September 30. The treatment of generation located with large loads remains an important issue as developers pursue increasingly complex arrangements involving onsite generation, existing plants and grid service.

CAISO, October 1 and October 19

The first stakeholder discussion following publication of CAISO's draft final Large Loads Initiative will provide an early indication of industry reaction to FILI, cost allocation and the proposed technical requirements. Formal comments follow on October 15, a separate meeting on the draft tariff language on October 19, and Board consideration is currently scheduled for October 28.

ERCOT, October 5 and October 12

Texas developers should watch the approaching Community Impact RFI deadlines. The process is increasingly linking power development to water, cooling, ownership and local infrastructure impacts, issues that are likely to move earlier into site diligence.

SPARK Awards

DOE currently expects final awards for the SPARK transmission selections between October 2026 and January 2027. As those projects advance, their specific locations, utility sponsors and implementation schedules should become increasingly relevant to data-center and industrial siting strategies.

THE INTERFACE VIEW

Over the first five issues of Infrastructure Intelligence, the market has revealed a consistent progression.

The data-center business is becoming the power business. Interconnection readiness is becoming development readiness. Electrical behavior is becoming part of development responsibility. Flexibility is becoming infrastructure.

This week adds another principle:

Capacity optimization is becoming development strategy.

The infrastructure industry has spent enormous effort asking where new generation can be built.

That remains essential.

But another question is becoming equally important:

How much more capacity can be extracted from the infrastructure already in place?

A transmission corridor may carry more power after reconductoring.

An existing grid connection may support earlier energization through flexible service.

An AI campus may reduce its utility requirement by integrating onsite generation and storage.

A project schedule may move forward because equipment was reserved before financial close.

A developer may preserve hundreds of millions of dollars of liquidity by financing interconnection collateral rather than posting cash.

None of these approaches creates power from nothing.

What they do is convert existing infrastructure, engineering flexibility, equipment access and capital capacity into executable megawatts.

That is a different way of thinking about development.

Power is not simply a commodity waiting at the edge of a property.

Increasingly, it is something that has to be assembled through:

Grid + Generation + Interconnection + Equipment + Capital + Flexibility + Execution.

The most valuable sites may not always be the sites that can show the largest number of available megawatts today.

They may be the sites where a credible team can demonstrate the clearest path to usable megawatts tomorrow.

That distinction is becoming one of the most important competitive advantages in infrastructure development.

Interface Holdings and Development Firm

Building the Future of Infrastructure Through Strategy, Capital, and Integration.