GAI Data Center and Mission Critical Facilities team representatives Aaron Benedict, Arica DiTullio, PE, MS, and Bob Duero explore the advantages of data center development on the sites of decommissioned power plants and other industry. Utilizing such sites can help meet data centers’ land, electricity, infrastructure, water, and regulatory requirements with pre-existing connectivity, equipment, and zoning and permitting frameworks, accelerating project timelines to better meet client and market demands.
The U.S. data center market is experiencing rapid expansion fueled by the growing adoption of artificial intelligence (AI), cloud services, and digital infrastructure upgrades. In 2024, estimates place the U.S. data center market value at approximately $208 billion, with projections ranging from $309 billion by 2030 to more than $584 billion by 2032, depending on the source. This wide variability in forecasts reflects differing assumptions about AI adoption rates, energy infrastructure scalability, and regulatory impacts. While some analysts anticipate steady growth driven by enterprise cloud migration and hyperscale investments, others project more aggressive expansion tied to AI workloads and federal incentives. Despite these differences, there is broad consensus that the U.S. will remain the dominant force in the global data center landscape over the next decade.
U.S. Data Center Growth
The U.S. data center market is shaped by a dynamic mix of owners, operators, and developers. Among the top data center owners are major hyperscale cloud providers such as Microsoft, Google, and Meta, which collectively control a significant portion of the country’s total capacity. Leading data center operators include Equinix, Digital Realty, and CoreSite, all of which are known for their extensive colocation services and global interconnection platforms. On the development front, companies like QTS Realty Trust, STACK Infrastructure, Vantage Data Centers, and CyrusOne are at the forefront, building large-scale data center campuses to meet the growing demand for AI and cloud infrastructure. These players are driving innovation in energy efficiency, cooling technologies, and modular construction, helping position the U.S. as a global leader in next-generation data center infrastructure.
Geographically, the U.S. data center market is concentrated in several key regions, each with distinct drivers. Northern Virginia remains the largest and most mature data center hub in the world, benefiting from dense fiber infrastructure, proximity to federal agencies, and a well-established power grid. Atlanta, Georgia has recently surpassed northern Virginia in net absorption—a metric that measures the amount of newly occupied data center space minus vacated space—indicating stronger leasing activity and demand. This shift is driven by Atlanta’s lower land costs, favorable tax incentives, and strong regional connectivity. Silicon Valley and the Pacific Northwest continue to attract investment due to their proximity to major tech firms and innovation ecosystems, though rising costs and regulatory pressures are beginning to shift demand elsewhere. Emerging markets such as Charlotte, North Carolina, northern Louisiana, and Indiana are gaining traction due to available land, scalable power capacity, and more favorable permitting environments. These regions are increasingly attractive to hyperscale and colocation providers seeking alternatives to saturated primary markets.
How Decommissioned Power Plants Sites Facilitate Data Center Development
As discussed earlier, data center development in the U.S. faces critical constraints including the availability of sufficient power, land, and water, and a stringent regulatory environment, particularly at the state and local levels.
The federal government has acted to support data center development with the signing of Executive Order 14318 on July 23, 2025, which accelerates federal permitting and enables access to federal lands for large-scale data center infrastructure work. The order has had immediate and substantial impact, with over $90 billion in private capital pledged toward AI and energy infrastructure projects. Yet the persistent challenges of local and state regulatory requirements and power, water, and land availability see developers continuing to explore strategies that include the repurposing of decommissioned power plants as potential data center development sites.
These sites offer existing connections to high-voltage transmission lines and substations, built-in redundancy, and backup systems that can be adapted for data center reliability requirements. Some occupy expansive parcels of land with secure perimeters, ideal for hyperscale or modular data center campuses. Former power plant brownfield sites are often already zoned for heavy industrial use, reducing regulatory hurdles and community opposition.
Reusing existing power plant sites for data center development minimizes greenfield disruption and can qualify for environmental incentives or grants. Data centers can also bring jobs, tax revenue, and infrastructure investment to areas impacted by plant closures. According to recent data from the U.S. Energy Information Administration (EIA) and industry sources, approximately 120 coal-fired power plants in the U.S. are scheduled to shut down over the next five years.
Many of these retiring plants are considered viable candidates for conversion into data center campuses.
Developers are also exploring alternatives including leveraging natural gas and shale fields for data center development. These locations offer proximity to existing well infrastructure, enabling direct access to natural gas for on-site power generation. Depleted or underutilized wells can be repurposed for carbon injection, supporting carbon capture and storage initiatives. Existing roads, pipelines, and utility connections can reduce development time and cost, and local authorities are often experienced with energy-related permitting, which can streamline approvals. Co-locating with energy producers can create opportunities for shared infrastructure, joint ventures, or energy-as-a-service models. Waste heat from natural gas generation can be captured and reused for facility heating or other industrial processes.
Power Assessment
Determining the optimal power supply configuration for a site begins with a comprehensive assessment of facility requirements, project timeline and phasing, the local electric grid, fuel availability, and other critical factors. Many early data centers were simply tied into local electric utility grids due to the abundance of grid power. More recently, increased stress has been placed on the electric grid driven by the fast growth of data centers and high-technology hubs and other factors, forcing many data center facility owners to consider on-site power generation.
This significant rise in demand has put many local utilities and electric grid operators under considerable strain. Electric grid operators tasked with the coordination and monitoring of power grids can traverse large territories and include many power plants. PJM, the largest of the regional transmission organizations (RTOs), covers a staggering geography that includes 13 states and 65 million customers. Alongside its vast geographic coverage and the surge in new data centers, PJM is also managing the transition away from an aging fleet of coal-fired power plants. These plants historically provided baseload generation, with most now retired or planned for retirement. As such, these brownfield sites present a unique opportunity—not only due to their abundance, but also because of existing infrastructure that holds potential for reuse.
Another incentive for reusing brownfield plants is the power supply market. Baseload capacity auctions have shown sharp increases in energy pricing to avoid area blackouts — PJM saw an 800% jump in capacity auction pricing for 2025/2026, followed by another 22% increase for 2026/2027. This pricing provides a strong incentive to revamp brownfield power plants to meet facility power needs and sell power back to the local electric grid.
When selecting the optimal power mix for a data center facility, development project schedule is a critical element—both the overall schedule and the phasing of the project. As power demands for data centers continue to surge, it’s essential to account for increasingly long lead times for procuring key equipment. Delays in procuring turbines and electrical components can significantly impact the overall project schedule and even influence the choice of power source. Permitting timelines also play a major role. States like Ohio and Pennsylvania have taken steps to accelerate permitting in response to rapid industry growth.
Water Resource Availability
Data centers and high-technology hubs require large volumes of water for cooling the servers and any power-generation equipment. Because of this, former power plant sites make ideal data center development locations due to the existing electric and water infrastructure capable of supplying cooling water to the plant. Additionally, many brownfield power plants are located adjacent to natural water sources such as rivers that have been dammed and fitted with water intake systems to supply, circulate, and discharge water from the plant. Depending on the acreage of the data center or technology campus, a larger area of impermeable surface may result, and stormwater harvesting can be a viable solution to offset increased runoff.
Data center servers can use air or water as a medium for cooling. Using water is more efficient than air, with chillers and evaporative cooling towers being the most common historically. With evaporative cooling, water is lost through evaporation in the cooling tower as well as discharge/bleed, making a constant source of makeup water necessary. Modifying brownfield water systems provides a significant advantage over new systems by reducing greenfield construction and minimizing new impacts on the floodway and banks of the source water. Often, the existing water intake and pumphouse can be reused, with pumps replaced and electrical equipment upgraded.
Environmental, Zoning, & Permitting
Investigating the reuse of brownfield sites for data centers and high-technology hubs requires a thorough site assessment of environmental aspects, zoning, and permitting. Water consumption and discharge rates for data centers are often lower than those of formerly operational power plants, and water discharge can be typical for both. An existing zoning framework that is beneficial to data center development may already be in place, as brownfield sites often have preferable zoning for reuse. Along with local support for redeveloping the land to support job creation and provide economic stimulus, this favorable zoning may help with the permitting process and potentially speed up approvals. Additionally, there are other financial incentives not specifically discussed in this article that may benefit brownfield redevelopment, such as tax credits and brownfield grants.
There are several due diligence steps required when considering the environmental aspects of a brownfield site formerly occupied by a power plant. The site’s air quality attainment status and required air permits, water supply and discharge permits, and the condition of any existing landfills, impoundments, and environmental cleanup liabilities must be fully understood prior to design. Major permits —such as water allocation, obstruction/encroachment permits, National Pollutant Discharge Elimination System (NPDES) water discharge, and Title V of the Clean Air Act air permits — all need to be reviewed to understand what further steps would be required, aside from any other local regulations.
Title V Operating permits for air emissions are often the first to be terminated during the decommissioning of a power plant, leaving redevelopment to start anew. Title V permit needs are defined by air emissions and depend on the cooling systems to be used. Retired power plants may have existing water allocations for withdrawal and may also have useful studies that could support the process of obtaining new water supply permits. Securing approval for a new allocation is often easier when a larger one has recently been eliminated, rather than starting from scratch. Reviewing previous permits and comparing the former facility’s water withdrawal and consumption rates to those of the proposed facility can provide valuable insight.
If the brownfield site for potential data center development includes landfills and impoundments, it is beneficial to attempt to carve out these assets from the land acquisition as the original owner may have robust longstanding testing and reporting requirements associated with these, in addition to other environmental liabilities. A site’s applicability to being regulated by the ever-changing Coal Combustion Residuals Rule seems to greatly impact a developer’s pursuit of the site. Because this regulation is in flux, the liabilities cannot be fully known, which can deter suitability for development.
Finally, if development plans call for on-site power generation using another fuel source such as natural gas, the necessary permitting to bring the gas to the site via pipeline will need to be reviewed. In cases of development on a brownfield site previously powered by natural gas, the pipeline and permitting may already be in place.
Grid Connection
Sourcing power from the local utility is often preferred due to its high reliability and minimal infrastructure capital costs—the facility equipment is installed while the utility handles the electric grid connection. However, it’s essential for the engineers to assess the capabilities of the local electric grid infrastructure before proceeding. This power assessment typically begins with applying to the interconnection queue of the regional grid operator. The resulting electrical study evaluates the impact of supplying power to the facility and determines the feasibility of a grid tie-in. Based on the study, necessary infrastructure upgrades—such as power line routing and substation modifications—will be identified to support the connection.
Locating data centers at brownfield power plant sites offers a strategic advantage due to the presence of existing interconnection points and established physical infrastructure. In some cases, prior electrical studies and interconnection agreements with the regional grid operator may already be in place, streamlining the development process. While these studies often require updates, the timeline is typically shorter compared to initiating a project at a greenfield site. Beyond the inherent reliability of the grid, brownfield locations also present opportunities for facility owners seeking to procure clean energy through power purchase agreements or similar mechanisms.
Data center developers pursuing a grid-connected approach that utilizes green energy can benefit from a brownfield site’s existing interconnection with the grid and infrastructure while procuring green energy to meet energy demands. Google employed this approach at the former Widows Creek Fossil Plant in Alabama, using the existing interconnection point and sourcing solar energy to help power the data center.
In addition to direct electric grid connection, power source solutions may include:
- Behind-the-Meter Power
If the local grid cannot fully or partially support the facility within the required timeframe, on-site or “behind-the-meter” generation offers an alternative. This enables the facility to supply its own power directly, potentially eliminating the need to connect to the electric grid and bypassing many of the associated integration steps.
When selecting the appropriate power generation system, key factors such as reliability, fuel availability, environmental impact, and project timeline play critical roles in the decision-making process. Reliability is paramount for data centers, where even brief downtime can lead to substantial revenue loss. The Uptime Institute developed tier standards for data centers, with even the lowest tier requiring 99.67% uptime per year. Therefore, it is essential to select a power-generation solution that best provides continuous power delivery with adequate redundancy or emergency backup.
Availability of fuel supply for power equipment remains a crucial factor in planning. Regions like the Marcellus Shale, rich in natural gas reserves and supported by a robust local gas infrastructure, benefit from abundant fuel supplies and existing pipeline networks. Additionally, these areas have a large quantity of brownfield power plants for potential reuse.
- Renewable Energy Options
As renewable energy and sustainability take center stage in data center development, many operators are exploring greener power generation options. While power purchase agreements (PPAs) remain the primary vehicle for sourcing solar energy, a growing number of data center sites are now integrating on-site solar arrays paired with battery storage to directly supply their facilities. Key factors such as land availability, geographic suitability, and upfront capital investment heavily influence the feasibility and scale of solar deployment. Apple’s Reno, Nevada data center is planning another large expansion, coupling on-site solar with a PPA to supply renewable energy to the facility.
Nuclear energy has reemerged as a focal point in energy discussions, with its high reliability and adaptable power output. Much like the strategic reuse of retired brownfield coal facilities, decommissioned nuclear plants offer significant advantages—chief among them, existing infrastructure and prior clearance through the rigorous Nuclear Regulatory Commission (NRC) process. A notable example is the Three Mile Island nuclear facility, where Microsoft and Constellation Energy are planning to restart the plant, aiming to deliver 800+ MW to support a new data center. Given that licensing and permitting a new nuclear plant can span several years, repowering legacy sites presents a major scheduling advantage and a pragmatic path toward clean, large-scale power deployment.
- Bridge Power
A growing trend in data center development is the use of “bridge power”—on-site, behind-the-meter generation designed to fill the timing gap between facility commissioning and utility grid tie-in. This approach enables developers to begin operations in phases, such as launching with an initial 100 MW and scaling to 500 MW once utility access is secured. In some cases, bridge power can even supply a site’s full power demand while awaiting grid integration.
Natural gas or diesel generators offer a practical solution for short-term power needs due to their relatively quick procurement and installation timelines. For longer-term applications, more robust solutions —such as gas turbines and reciprocating engines, often paired with battery storage—provide greater efficiency and reliability. Additionally, microgrids that integrate multiple power sources, including renewables and conventional generation, offer a resilient and scalable approach to meeting diverse energy requirements across deployment stages.
Once the utility grid connection is established, developers have several strategic options for repurposing existing on-site power infrastructure. One approach is to transition these assets into backup or emergency power systems, providing resilience in the event of utility outages. Alternatively, the utility itself may act as an off-taker of this power output, leveraging the on-site generation to bolster the local grid.
Brownfield Advantage: A Head Start on Data Center Development
In today’s competitive environment, undertaking data center development on brownfield sites formerly occupied by power plants presents major advantages in meeting projects’ substantial land, water, electricity, and regulatory requirements. Offering industry-level power connectivity and water-supply solutions and covered by advantageous existing zoning/permitting frameworks, these sites help meet the challenges of equipment availability, strained core infrastructure systems, and laborious regulatory hurdles to accelerate project timelines, control project budgets, and deliver seamless data center services to market.
GAI Advantage: Extensive Experience, Targeted Expertise, Multidiscipline Support
GAI’s professionals have years of experience providing innovative, investment-maximizing, integrated infrastructure solutions for data center providers and developers, specializing in power integration, water resource planning and repurposing, and civil/land development services. Our center of excellence in Pittsburgh, Pennsylvania offers a strategic advantage, leveraging the region’s legacy in steel manufacturing and Marcellus Shale energy to support optimal siting, design, permitting, and engineering of data center projects.
With deep experience in brownfield power generation sites, high-voltage electrical interconnections, and water/wastewater infrastructure, we understand the constraints that often delay projects—allowing us to proactively mitigate risks and accelerate delivery. Our multidisciplinary approach supports seamless coordination across utilities, environmental compliance, and land development, helping clients scale infrastructure efficiently and reliably. Backed by a staff of multidiscipline professionals, GAI provides a single source for the full range of your unique project needs.
For more information about GAI’s end-to-end services for data center development, contact Data Center and Mission Critical Facilities team members:
Arica DiTullio, PE, MS412.399.5455
AVP and Engineering Director, Environmental Engineering, Power Generation
