Lofty Projections for Data Center Buildout Constrained by Power, Energy and Legal Considerations; IPPs Benefit From PPAs With Hyperscalers; Natural Gas Demand Supported Until 2030s

Credit Research: William Hong Legal Analysis: Eleanor Moreau   Key Takeaways   Global electricity consumption from data centers alone is widely expected to rapidly proliferate in the next decade. One estimate from the International Energy Agency projects 945 terawatt-hours by 2030 at its base case, which is more than double the amount recorded in 2024. Much of this expected global demand growth is concentrated in the United States, as the IEA projects domestic consumption in 2030 to exceed global consumption in 2024. The primary driver for these lofty projections is the nearly half a trillion dollars announced in capex for 2026 alone by three of the largest hyperscalers – Amazon, Google and Meta. Much of this expected domestic demand growth is concentrated in the ERCOT (Texas) and PJM Interconnection (primarily Virginia and Pennsylvania) grid regions. The U.S. Energy Information Administration projected electricity demand in the ERCOT region to grow by 14% in 2026 and electricity demand in the PJM region to grow by 4% in 2026 as a result of data center demand. To put these growth figures in appropriate context, the United States reported an average nationwide annual growth in electricity demand of 0.8% between 2020 and 2024.  [...]