Power, Place & Policy: The New Rules of Data Center Development

Data center development is entering a new phase as surging demand for AI infrastructure collides with power constraints, evolving regulatory requirements, and increasing community scrutiny. Developers are navigating a more complex landscape in which access to power, local permitting, site selection, and community engagement can be just as important as capital availability.

In this webinar, Kristopher Kirkwood and Joshua Rudin join Alison Ellz of Heatmap Pro to examine the key drivers reshaping data center development. Building on introductory remarks from Tom Burton about the growing demand for power and the evolving data center landscape, the speakers discuss grid interconnection challenges, on-site generation strategies, local opposition, community benefits agreements, and emerging markets for future growth.

Key takeaways include: 

1. Power constraints remain a primary challenge for data center development. While demand for AI infrastructure continues to accelerate and capital remains readily available, access to power has become the primary bottleneck. Lengthening interconnection queues, multi-year wait times, and grid capacity constraints are forcing developers to rethink how and where projects are brought online.
2. On-site generation is playing an important role in addressing power availability challenges. Developers are pursuing behind-the-meter power strategies, particularly natural gas-fired generation, to bypass interconnection delays and accelerate “speed to power.” At the same time, battery storage, solar-plus-storage systems, and other technologies are being incorporated into project designs, while small modular reactors are viewed as a longer-term opportunity rather than a near-term solution.
3. Data center development requires a broader approach to site selection and permitting. Access to power remains critical, but developers must also evaluate utility relationships, zoning requirements, water availability, fiber connectivity, and local regulatory frameworks before committing to a site. Early coordination with utilities, local counsel, and permitting authorities is an important step as development timelines and approval processes grow more complex.
4. Community engagement has become a critical factor in project success. Data centers are receiving greater public scrutiny than in previous development cycles, and community opposition can significantly influence project outcomes. Community benefits agreements, local infrastructure investments, workforce commitments, and transparent communication about project impacts are becoming important tools for addressing concerns and securing local support.
5. Power strategy, regulatory requirements, and local acceptance are becoming more closely linked development considerations. Developers must now balance growing energy demands, evolving regulatory requirements, cost allocation rules, environmental considerations, and community expectations. As development expands beyond traditional markets and into emerging regions, success will depend on aligning these factors early in the planning process rather than treating them as separate challenges.

For questions about the content of this webinar, contact the speakers or your regular Mintz attorney.

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