Behind-the-Meter Power Demand — Is It Real?

I. A Small Number of Data Centres Have Genuinely Cut the Cord

"Off-grid" and "self-generating" have become loose terms in the data centre press, so it is worth being precise about what has actually been built. A true off-grid, or "island-moded", data centre runs entirely on its own generation with no utility interconnection at all. By that standard the completed list is short.

The clearest example is Pure Data Centres Group's facility in west Dublin, completed in March 2026 running entirely on an on-site gas-fired microgrid — described by its operator as the first fully self-generated data centre of its kind in Europe and a template for a planned 110 megawatts of capacity. In the United States, the largest genuinely operating behind-the-meter load belongs to xAI's Colossus 1 and 2 campuses outside Memphis, which by mid-2026 had grown to roughly 1.5 gigawatts of operating gas turbine capacity, much of it added as temporary mobile units. Across the country, independent tracking by Cleanview puts total operating behind-the-meter generation for data centres at approximately 2 gigawatts across only four projects as of mid-2026, expected to reach 2.8 to 3.2 gigawatts by year end.

Set against that, roughly 90 gigawatts of behind-the-meter generation for data centres has been announced nationally, and other trackers including Rabobank put the wider proposed figure above 130 gigawatts once solar, wind and battery co-location are included. The ratio of announced to operating capacity is currently somewhere between 30 and 65 to one. This is not a sign the trend is overstated so much as a sign it is early. Behind-the-meter gas projects still take 18 to 36 months to permit and build even when they bypass the interconnection queue entirely, and permitting risk is real: one of the Stargate campuses in New Mexico lost its planned gas pipeline to a state regulatory block earlier this year — a reminder that avoiding the grid does not mean avoiding regulation.

II. The Approved and Under-Construction Pipeline Is Much Larger, and Mostly Gas

Move one step back from completed projects to those approved or actively under construction, and the numbers grow quickly. The US Department of Energy's own compilation puts total data centre capacity currently under construction at approximately 36.6 gigawatts, with a further 201.5 gigawatts in planning. A separate property-level census by MMCG counted 162 US data centre buildings under construction and 328 proposed or in final planning as of June 2026, against 1,259 already standing — a pipeline already sized at close to twice today's installed base.

Gas dominates the fuel mix of what is actually being built behind the meter, accounting for over 80 per cent of the proposed pipeline according to Rabobank, and roughly 75 per cent of behind-the-meter capacity currently in service. The planned natural gas capacity queued for interconnection nationally between 2026 and 2030 has roughly tripled in little more than a year, from 23.8 gigawatts at the start of 2025 to 64 gigawatts by early 2026. The single largest behind-the-meter project under construction anywhere in the country — the 4.4 gigawatt Homer City Generating Station on the site of a retired Pennsylvania coal plant — illustrates the scale individual projects have reached. Texas, freed from the multi-state coordination burden of PJM, has attracted the largest concentration of behind-the-meter investment, with an estimated 38 gigawatts in development against roughly 356 gigawatts of data centre interconnection requests already lodged with ERCOT.

Solar, wind and battery combinations account for a smaller but non-trivial share — roughly 22 gigawatts of the colocated pipeline by Rabobank's count — reflecting their lower up-front cost and faster deployment timeline even though they cannot match gas for dispatchable, round-the-clock baseload. Alphabet's US$4.75 billion acquisition of Intersect Power, which closed in March 2026 and included an already-under-construction co-located data centre and power campus in Haskell County, Texas, is the clearest signal that hyperscalers now see owning generation — not just contracting for it — as core infrastructure strategy rather than an emergency workaround.

III. Nvidia's Move Into Power Development

The Wall Street Journal reported in the past week that Nvidia is close to finalising an investment worth several hundred million dollars in Cloverleaf Infrastructure, a power development company that secures utility agreements guaranteeing data centre developers grid access before they break ground. Founded in 2024 with an initial US$300 million raised from energy investors NGP and Sandbrook Capital, Cloverleaf has sold projects representing more than 7 gigawatts of powered land — including Wisconsin sites destined for Oracle and OpenAI — and holds a further pipeline exceeding 10 gigawatts.

This is not an isolated move. Nvidia has also committed US$1.5 billion — with a further tranche expected at IPO — to SB Energy, the SoftBank-backed developer building an 8 gigawatt, US$4.2 billion campus for OpenAI in Pike County, Ohio, and separately joined KKR, the Kuwait Investment Authority and Vistra Energy in forming Helix Investments to build and finance further AI infrastructure. Taken together, these are Nvidia's third and fourth known infrastructure power investments in a compressed period. The commercial logic is straightforward: Nvidia's chip revenue is only realised once the data centre housing those chips has power, so an equity stake in the businesses that secure or build that power is a direct hedge against the single constraint most likely to slow its own growth. The more contestable question — now being asked openly by equity analysts — is what this means for how Nvidia's own balance sheet and reported returns should be read, given the chipmaker is increasingly financing the very demand that buys its products.

IV. Rising Power Prices Are Already Reaching Industries That Have Nothing to Do With AI

The behind-the-meter build-out exists because the alternative — waiting in the ordinary grid interconnection queue — now typically takes five to ten years in major hubs. But the capacity that has not yet been built off-grid is still showing up on everyone else's electricity bill. PJM's capacity auction price rose from US$28.92 per megawatt-day for the 2024/25 delivery year to US$269.92 for 2025/26 and US$329.17 for 2026/27 — an increase of more than 1,000 per cent in two years, driven primarily by data centre load growth.

Manufacturers are often caught in the same electricity rate class as data centres and are absorbing a disproportionate share of the increase. Belden Brick, a 141-year-old manufacturer in Sugarcreek, Ohio, saw its monthly capacity charge rise from US$1,600 to US$12,000 in a single year — part of a broader pattern in which industrial electricity prices in Pennsylvania and Ohio rose 31 per cent and 26 per cent respectively in the twelve months to December 2025, against 7 per cent nationally for industrial users. Reuters attributed the gap directly to the concentration of data centre growth in those two states. Manufacturing trade groups are now lobbying FERC to be exempted from proposed rules that would apply transmission charges even to electricity manufacturers generate for themselves on-site, arguing the rules were written with data centres in mind and are catching factories in the same net.

The pressure is not confined to industrial users or to states with heavy data centre concentration. Utilities requested US$9.4 billion in rate increases from state regulators in the first quarter of 2026 alone, following a record US$31 billion sought across all of 2025 — more than double 2024's US$15 billion. Investor-owned utility capital spending plans through 2030 have risen 27 per cent over the past year to US$1.4 trillion. The Rhodium Group notes a further second-order effect: the surge in demand for gas turbines has pushed their price for projects coming online in 2030 to US$2,000 to US$2,500 per kilowatt, roughly double the price for capacity delivered this year or next — a cost increase that falls on all future grid-connected generation, not only the capacity built for data centres.

V. Outside AI, Industry Is Quietly Reaching the Same Conclusion

The economics pushing hyperscalers behind the meter are now visible to any electricity-intensive business watching its own capacity charges climb, and the response looks similar even though the scale is smaller. Bloom Energy reports industrial customers including Conagra, Ferrari and Quanta Computer among adopters of on-site fuel cell power, while Walmart operates more than 40 fuel cell installations across its stores and distribution centres in California, supplying 60 to 75 per cent of those facilities' electrical load. In the chemical sector, Honeywell cut annual utility costs by roughly 30 per cent at its own plant in Lugoj, Romania, after adding a microgrid combining solar, battery storage and backup generation, and Covestro is commissioning a heat battery at its Brunsbüttel site in Germany designed to supply 10 per cent of the facility's steam from stored renewable energy by the end of 2026.

In the United States specifically, manufacturers in Ohio and neighbouring states are increasingly turning to high-efficiency fuel cells as a hedge against PJM capacity price volatility, valuing their ability to provide continuous baseload power independent of grid conditions. More broadly, commercial and industrial energy service providers report growing adoption of an Energy-as-a-Service model, in which a third party builds and owns an on-site microgrid at a hospital, manufacturing plant, distribution centre or hospitality property under a long-term contract with a fixed, modest annual price escalator — shifting both the capital cost and the utility rate risk off the customer's own balance sheet.