Data center developers are buying their own substations and batteries to get past local opposition

Residents' worries about power availability and local rate hikes are among the biggest objections opponents raise. In some regions, data centers are already being blamed for rising electricity rates ^[2]. The grid payments are aimed at that objection. Developers who contribute to transmission upgrades, or buy transformers, substations and other power electronics, do it to keep the extra cost off ratepayers ^[4].

I think the battery deals are the better-engineered answer. Some developers have paid for entire battery energy storage systems that benefit both the grid and their own data centers ^[3]. One purchase then counts toward the facility's power plan and gives the utility storage it did not pay for ^[1].

Permitting and system operator approval are unlikely without a clear plan for adding new power resources, typically funded by the developer, according to the Data Center Knowledge report ^[10]. That plan can draw on wind, solar, batteries, geothermal, gas or nuclear. It often combines several, assembled with power plant developers, EPC contractors and utilities ^[11]. "Any project proposal should also include a power generation solution, or you are probably wasting your time," Diane Sullivan, chief development officer of Hecate Energy, said at Data Center World Power in Dallas ^[12][1]. Hecate develops utility-scale energy parks ^[6], so her rule for data center developers also describes demand for what her own company builds.

Sullivan's other point was about timing. "In the past, developers would sometimes obtain permits before informing the public about a data center project, which is a terrible idea," she said ^[7]. "We must become open and be fully transparent about our plans" ^[8]. The report says quiet development may have worked for smaller projects with little effect on the local grid. AI data centers are now too large for it ^[9].

Community support adds a way to fail that a sound project plan does not prevent. "You could have a perfectly executable project that's real, it's commercial, and has well-allocated risk, but the community shows up and doesn't want you there," said Dado Slezak, executive vice president of energy capital and strategy at QTS Data Centers ^[14]. He cited an agreement QTS reached on a project in Iowa as an example of making the benefits concrete for residents ^[15].

These are practitioners' tips from a conference stage. They transfer to a given site only if the local objection is mostly about power and rates. Opponents also complain about water and noise, and some government bodies have imposed bans or moratoria ^[17]. A developer-funded battery does not answer a water or noise complaint. The report does not attach a dollar figure to any battery, transformer or substation purchase, so the size of this budget line cannot be read from it.