Some of the newest capacity in PJM this week won't need a turbine, a cooling tower or a queue position. It's batteries and flexible demand at homes and businesses, and Google has it under contract until 2040. Provided it actually shows up on the hottest afternoon in August. That's the question. This is The Data Center Daily, Friday, October 23rd. Coming up after Google's virtual power plant: Nvidia pays its suppliers in advance for capacity that doesn't exist yet, Bernstein says nearly two-thirds of announced data center capacity won't get built, and a Pennsylvania county tells a developer to put down the shovels.
Maeve Allsup, reporting for Latitude Media:
While the specifics of the deal aren’t public, Guernsey confirmed that Google signed a contract that extends through 2040, and that it will offset load from multiple data centers in PJM.
Google and Voltus announced this Thursday. It expands a bring-your-own-capacity arrangement that started with a 100 megawatt target in June. The new tranche is 1,070 megawatts. Voltus CEO Dana Guernsey says the first 100 megawatts has already been fulfilled and was over-subscribed. We covered Voltus's 225 million dollar raise on October 9th; this is where that money is headed. Why the 2040 term matters: PJM's capacity auction buys three years out. Guernsey says the critics of phase one asked why it only ran three years. A fourteen-year offtake is what lets a commercial building owner finance a battery without taking merchant risk. And batteries are the story inside the story. Guernsey wouldn't say how much of the gigawatt is storage, only that it will be, quote, a chunk. Per Canary Media, Voltus says this is on top of what it already bids into PJM's market, with no fossil backup generators. Now the gaps. No price, no timeline, and Google hasn't said which data centers this offsets. Signed contract, sure. But it's a contract for a gigawatt nobody has built yet. Canary notes PJM forecasts 30 to 34 gigawatts of new large-load demand by the early 2030s. Utility Dive reports demand response revenue in PJM rose 240 percent from 2024 to 2025, to 523.6 million dollars, with emergency demand response 88 percent of it. And FERC rejected PJM's own bring-your-own-new-capacity rules earlier this month. So Google is doing by contract what the tariff couldn't. Better than a peaker. I'll believe it after the first emergency call.
Jeremy Fielding, writing in Tech Times:
Taken together, the agreements form an escalating set of capacity targets: substrates expanding 2.5 times over the next three years, advanced packaging in South Korea growing more than 300 percent by the end of 2028, total semiconductor testing capacity doubling from calendar-year 2026 to calendar-year 2027, and optical-engine production targeting a 15-fold increase by mid-2027.
This came Wednesday at GTC Berlin. Six suppliers: Amkor, IBIDEN, King Yuan Electronics, Samsung Electro-Mechanics, SPIL and Unimicron. Jensen Huang's framing on stage: "Demand is extraordinary. Capacity is the constraint." The number with a signature on it is King Yuan. A 1.1 billion dollar capacity reservation advance, signed October 13th, to build US test capacity through its subsidiary AeternZ. High-volume production targeted for April 2027, and the advance gets drawn down against testing services. Nvidia is prepaying for burn-in rigs. Burn-in is the quiet bottleneck. AI GPUs draw so much power under test that air-cooled equipment can't hold them, so KYEC's edge is liquid-cooled burn-in. Amkor's commitments now total roughly 3 billion dollars across the US and South Korea. And the catch Tech Times flags: SPIL's optical engines go into co-packaged optics switches, which compete with the GPUs for the same 2.5D and 3D packaging capacity. This deal doesn't fix that. For buildout planning, watch the dates. Singapore testing targets February 2027, substrates run into mid-2028, and CFO Colette Kress has said the supply gap persists through the fiscal year ending early 2028. None of this adds a chip this year.
Alistair Barr, in Business Insider's AI Insider newsletter:
Bernstein Research analyzed thousands of planned US data centers and concluded that only about 35% of the announced capacity is likely to get built. That's roughly 170 gigawatts of data center capacity out of a total of almost 500 gigawatts.
Bragawatts. That's the headline's word, and I'm stealing it. Futurism, summarizing the Financial Times, says RegLayer data shows 47 large data center projects have fallen through this year, amid local opposition, high interest rates and shaky bond markets. One unnamed executive told the FT, "It's much harder today to finance a data center." And Wall Street noticed. Barron's says data center landlords got hit Thursday in a selloff driven by fears of excessive AI infrastructure spending. And per the Futurism piece, CoreWeave stock is down more than 27 percent over the past month. So how does a grid operator tell real load from bragawatts? Modo Energy looked at Texas on Wednesday. A one gigawatt connection needs at least 50 million dollars of security at the interconnection agreement stage, against 30 to 40 billion to build the campus. Modo's conclusion: that security is too small to show which projects are real. If the deposit is a rounding error on the capex, the queue fills with options dressed up as projects. Then the wires get sized to the brag, and ratepayers hold the stranded asset. One caution: Bernstein's 35 percent is a model of feasibility, not a list of cancellations. The 47 failed projects are the hard count.
PennLive, reporting from Allenwood in central Pennsylvania:
In an Oct. 16 letter made public Wednesday, the commissioners told PNK Group it had not received the required approvals before starting work.
Union County ordered PNK Group, a New York City developer planning three data centers at the Great Stream Commons business park, to stop building the substation that would serve them. PNK has 30 days to confirm in writing that non-protective work has stopped, or the county says it could seek legal action. Here's the twist. PNK got a building permit from Gregg Township. But the county used to own the park and sold the parcels with deed covenants, and those covenants are what PNK is accused of violating. Read your deed before you pour the substation pad. The county denied the substation request on October 6th for lack of information, saying it can't review one piece of what PNK calls a unified campus. It suggested PNK wait for Gregg Township's zoning vote on where data centers can go, expected next month. Meanwhile the utility side keeps moving. PPL picked a preferred route for a 6.8 mile, 230 kV line from the Elimsport area, over state game lands and Bureau of Prisons property. PNK pays all of it, though there's no cost estimate yet. Construction late 2027, done by end of 2029, pending the state Public Utility Commission. PPL says the line gets re-evaluated if the campus is dropped, and it holds a public session Wednesday, October 28th. For developers, the lesson is sequencing: a township permit didn't cover the county's deed covenants.
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Before the weekend, what we're tracking: whether Google names the data centers behind its 1,070 megawatts, KYEC's US test site as it heads for April 2027, and that PPL meeting on Wednesday. Our next episode is Monday, October 26th. The Data Center Daily is a Lantern Podcast. Thanks for spending part of your Friday with us.