Co-Located Load and Race to Reshape the Grid
Lyle Larson is a partner in Balch & Bingham’s globally recognized Energy Practice. Lyle advises clients across the electricity industry, focusing on FERC litigation and compliance, utility asset transactions, smart grid and distributed resources, mergers and acquisitions, and RTO market design. Lyle is recognized as a global leader in the Electricity sector, ranked individually in the Chambers Global 2025 Guide.
The rapid expansion of digitalization and artificial intelligence (AI) is redrawing the map of the electric grid. Hyperscale data centers – deployed by companies like Amazon, Google, Microsoft, and Meta – are multiplying across the country, demanding unprecedented volumes of reliable electricity. By 2030, they are projected to consume nearly twelve percent of total U.S. electricity. These aren’t just corporate facilities. They are the computational engines behind AI training, national security infrastructure, and economic competitiveness.
Against this backdrop, global pressure is mounting. China has declared its ambition to become the world’s AI superpower by 2030, backing that claim with aggressive infrastructure investment. In response, the Trump 47 administration has made AI dominance a strategic priority. Power – both literal and geopolitical – is at the center of this contest.
But here lies the problem: data centers are fast. The grid is not. Hyperscalers can construct new facilities in eighteen to twenty-four months. Transmission infrastructure takes three to ten years – sometimes more. That timeline mismatch has become a defining challenge of energy deployment today.
And so, a new model has emerged: co-location. Rather than wait in the transmission queue or depend on grid upgrades, large loads are siting directly next to generation to bypass the delays associated with grid expansion.