Why AI Data Centers Make Existing Power Plants More Valuable
As AI accelerates electricity demand, utilities and investors are paying a growing premium for existing generation that can reach the grid faster than new projects.
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AI-driven data centers are dramatically increasing electricity demand, making existing power plants more valuable than new ones because they can deliver power years faster. Regulators and investors face long delays building and connecting new generation due to permitting bottlenecks, equipment shortages, and interconnection backlogs, while the market increasingly pays premium prices for operating plants that are already grid-connected and can be energized quickly. Data center developers are adopting strategies like behind-the-meter generation and bringing their own power supplies to avoid waiting for new infrastructure. This shift has made gas-fired generation especially attractive to investors seeking dispatchable capacity with rapid energization, though transaction activity has slowed as high-quality power plants become scarcer.
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