Do creative power deals really accelerate development?

In the competitive field of artificial intelligence, major tech companies are straying from conventional norms of infrastructure development. Google has taken a leap in developing infrastructure by acquiring Intersect Power, while Microsoft plans to revive a nuclear plant at Three Mile Island. Amazon has been engaged in navigating regulatory obstacles to establish a direct link to the Susquehanna plant in Pennsylvania.

Despite these efforts, a fundamental rule of infrastructure remains unaltered by the AI boom – the resistance from local communities. The surge towards behind-the-meter electricity generation and energy parks is confronting a substantial obstacle in the form of community objections. Data Center Watch reported a higher number of project delays or cancellations in a single quarter compared to the prior two years combined.

Between March and June of the previous year, investments worth $98 billion were halted across 11 states. In 2025, plans for data centers in several states, including a notable withdrawal by Google in Indiana, were retracted due to concerns from local residents regarding utility costs, water accessibility, and landscape alterations.

Helen Kou, head of U.S. power research and analysis at BloombergNEF, emphasized that these delays negate the intended benefits of accelerating the pace of power distribution. A significant rise in overall data center capacity has been observed, but the development timeframe for data centers has not decreased significantly. Community issues, such as permitting and interconnection constraints, emerge as the primary hindrance to speed-to-power.

While BNEF’s data analysis presents a broad perspective on nationwide trends, localized community obstacles persist. Even if companies manage to bring their co-located or behind-the-meter electricity generation online, they still face challenges from local communities.

Nick Chaset, CEO of Octopus Energy U.S., highlighted an emerging opportunity for small-scale solutions, such as aggregated residential flexibility, to address these challenges. Octopus Energy has been exploring the bring-your-own-capacity framework to subsidize residential flexibility, solar, and battery storage for ratepayers affected by data centers. This approach, successfully implemented in the UK, could potentially alleviate local concerns about power costs and facilitate the development of data centers in the U.S.

In the face of escalating energy costs nationwide and the realization by data center developers that merely owning the generation equipment does not resolve the underlying issues, innovative solutions are required. Betraying the traditional norms of infrastructure development, tech companies and energy providers are reassessing their strategies to overcome the growing barriers posed by local communities in the era of the artificial intelligence boom.