At the 2026 World Services Group Americas Regional Meeting in Seattle, we unpacked the real dynamics shaping energy and data center co-development—from grid constraints and Battery Energy Storage System (BESS) permitting to global expansion and the rise of community engagement as a project-critical discipline.

For roughly two decades, U.S. utilities enjoyed slow, predictable load growth. Then cloud computing and AI arrived at scale, creating a demand inflection point the industry hadn’t seen in a generation. Add to that a nationwide push to electrify vehicles, buildings, and heavy industry, and the result is a grid under compounding strain.

That pressure shaped a panel discussion titled “Exploring the Intersection Between Energy and Data Center Development,” where moderators Sara Sayles (Energy Subgroup Leader, Schwabe) and Brendan Crowley (Real Estate and Natural Resources Department Head, Schwabe) led a candid discussion with Matt Chambliss, EVP of Commercial Strategy and Energy at Aligned Data Centers, and Alex Spaulding, Counsel at Jupiter Power.

What emerged was a practical, myth-busting, and strategically rich conversation. Here are the takeaways that matter most.

1. Data Centers Have Evolved, and Old Assumptions No Longer Apply

A persistent misconception is that data centers are massive water consumers. That was once true. Modern hyperscale and colocation facilities have moved almost entirely to closed loop cooling systems, dramatically reducing water usage or eliminating water usage for operational cooling entirely. Similarly, the assumption that data centers will overwhelm local grids indefinitely misunderstands the timeline: there will be sufficient power available long-term, but near-term grid capacity in high-demand corridors is the real bottleneck. Understanding this distinction is critical for developers, investors, and the communities hosting these projects.

2. Battery Storage Is Scalable—and Rarely Catches Fire

Skepticism about BESS often centers on two concerns: that they cannot scale to meet industrial demand, and that they pose significant fire risk. Both claims deserve scrutiny. BESS technology has matured considerably, and projects are now being deployed at the 30-megawatt-plus range. On safety, modern lithium-ion battery installations are continuously monitored with sophisticated suppression systems. Fires are rare, and the risk profile is not materially different from other industrial infrastructure.

3. The Aligned-PGE-Hillsboro Project Is a Blueprint Worth Studying

One of the most concrete examples discussed was Aligned Data Centers’ co-development with Portland General Electric (PGE) and energy storage specialist Calibrant Energy in Hillsboro, Oregon. Aligned committed to deploying a 31-megawatt/62-megawatt-hour BESS across the street from its Hillsboro data center campus. In exchange, PGE—using AI-powered grid planning software from startup Gridcare—was able to bring forward new data center load that would otherwise have waited years for traditional transmission upgrades.

As Aligned’s Chief Technology Officer Michael Welch noted publicly, PGE modeled these scenarios “with a high degree of accuracy” to ensure flexibility commitments would actually resolve grid constraints. The project is now widely regarded as a first-of-its-kind example of data center flexibility translating from theory into practice.

4. Behind-the-Meter Batteries, PPAs, and Build-Transfer Models Are Reshaping Partnerships

The panel explored how data center operators and battery storage developers are structuring new commercial relationships. Three models are gaining traction:

• Behind-the-meter BESS: Battery assets sited on or adjacent to data center campuses, reducing peak demand and enabling faster grid interconnection
• Power purchase agreements (PPAs): Long-term offtake structures that provide revenue certainty for storage developers while reducing energy costs for data centers
• Build-transfer models: Developers construct and commission a BESS asset before transferring ownership to the data center operator, limiting the operator’s development risk

Each model carries distinct legal, tax, and regulatory implications—and the right structure depends heavily on the project’s location, utility relationship, and financing constraints.

5. Interconnection Timelines Remain the Single Biggest Bottleneck

Five-plus years. That is the realistic interconnection timeline for large-scale projects in many U.S. markets. The panel was direct: interconnection queues are clogged, studies take too long, and the process is not designed for the pace that AI infrastructure demands. Equipment procurement lead times compound the problem, with transformers and switchgear often requiring 18 to 36 months from order to delivery. Projects that fail to account for these timelines in their development schedules will face costly delays.

6. Community Engagement Is Now a Core Development Competency

The panel was emphatic on this point: community engagement is no longer a box to check. NIMBYism around BESS projects—fueled by fire concerns, visual impact, and distrust of large capital—has stalled or killed projects in jurisdictions across the country. The developers who succeed are those who show up early, communicate transparently, and demonstrate tangible local benefit, whether through tax revenue, workforce investment, or grid reliability improvements.

Being a “good grid citizen” was a phrase used with genuine conviction. It reflects a shift in how leading developers think about their social license to operate.

7. Governing Bodies Are Increasingly Overstepping and Legal Counsel Needs to Be Ready

Local and state governments have at times enacted moratoria on BESS projects, imposed permitting requirements that exceed their statutory authority, or attempted to regulate technology at a granular level that falls outside their jurisdiction. The panel flagged this as an emerging litigation risk. Developers need legal counsel who can identify when a governing body has overstepped and mount an effective challenge—or, better, engage proactively before a moratorium is passed.

8. Tariff Uncertainty Is Creating Real Equipment Sourcing Challenges

The current tariff environment is injecting significant uncertainty into equipment procurement. Solar panels, battery cells, and associated components are subject to a shifting landscape of import duties, which affects project economics and supply chain planning. Developers and their counsel need to stay current on tariff schedules, evaluate domestic sourcing alternatives, and build contractual protections against cost escalation into their procurement agreements.

9. Latin America Is the Next Frontier for Data Center Development

The panel touched on the cross-border dimension, noting that Latin America—particularly markets with growing digital infrastructure demand and available land—represents a significant near-term opportunity for data center development. However, the regulatory environment varies sharply by country, and land use, grid reliability, and permitting frameworks require careful local analysis. Structures that work in the U.S. may not translate cleanly.

10. Speed to Power Is the Defining Competitive Variable

Across every topic discussed, one theme was constant: time. The data center operators who can get power faster than their competitors win deals. That urgency is now filtering into every aspect of project development—site selection, utility negotiations, permitting strategy, and community engagement.

What This Means for Energy Developers, Utilities, and Operators

The intersection of energy and data center development is no longer a niche practice area. It sits at the center of infrastructure finance, real estate, environmental permitting, regulatory strategy, and cross-border transactions. The panel offered a rare view from practitioners actively building and financing these projects—and the message was clear: the complexity is real, the timelines are punishing, and the stakes are high.

For those navigating this space, the priorities are straightforward: engage early with utilities and communities. Understand the interconnection queue and equipment lead times before you underwrite a project. Know when a governing body has exceeded its authority. And build legal and commercial structures that can withstand a rapidly shifting regulatory and tariff environment.

The developers, investors, and advisors who get these fundamentals right have a good shot of being well-positioned as the buildout accelerates.

Want to diver deeper? Watch the full panel discussion.

Frequently Asked Questions

What Is a Behind-the-Meter BESS, and How Does It Benefit a Data Center?

A behind-the-meter battery energy storage system is a battery asset installed at or adjacent to a data center facility, on the customer’s side of the utility meter. By storing energy during off-peak periods and discharging during peak demand, the system reduces the data center’s peak load on the grid. This flexibility can enable the data center to interconnect to the grid faster and at lower cost, without waiting for traditional transmission upgrades.

Why Are Interconnection Timelines So Long for Data Centers and Battery Storage Projects?

Interconnection queues across the U.S. have grown significantly as electricity demand has increased. Utilities must study the impact of each new large load or generation source on their grid, a process that involves multiple sequential studies and can take five or more years. Equipment shortages—particularly for large transformers—compound these delays. Projects that do not plan for these timelines from the outset face significant schedule and cost risk.

How Are Moratoria on BESS Projects Typically Enacted, and Can They Be Challenged?

Moratoria are typically enacted at the county or municipal level, often in response to community opposition or fire safety concerns. However, local governments do not always have the legal authority to prohibit infrastructure that falls under state or federal jurisdiction. When a governing body exceeds its statutory authority, the moratorium may be subject to legal challenge. Engaging legal counsel early—before a moratorium is proposed—can be an effective risk mitigation strategy.

What Are the Key Legal Considerations for Data Center Development in Latin America?

Latin American markets vary considerably in their regulatory frameworks. Key legal considerations include land tenure and title integrity, grid reliability and interconnection rights, local permitting requirements, tax structure and incentives, and the enforceability of commercial agreements. Many U.S.-based developers retain local counsel with specific emphasis in in the target jurisdiction and conduct thorough due diligence before committing capital.

How Does Tariff Uncertainty Affect BESS Project Economics?

Import duties on battery cells, solar panels, and related equipment directly affect capital expenditure budgets. When tariff schedules shift—whether through executive action or trade negotiations—project economics can change materially after contracts have been signed. Many developers model multiple tariff scenarios during underwriting, explore domestic sourcing options where available, and negotiate contractual protections such as material cost escalation clauses or force majeure provisions tied to trade policy changes.

This article does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.