Data centres are becoming power plants, and the cooling bill is arriving

The deal, first reported by the Financial Times and confirmed by JERA, pairs the Japanese utility with Dell for pre-built server racks and UK developer RHAELM for construction. Apollo is financing RHAELM. Operations are targeted for around 2028, and the partners want to repeat the model at other JERA sites, aiming at several gigawatts of AI capacity in the 2030s. JERA has not put its own number on that wider rollout; the $140bn figure comes from the FT's reporting.

"We can deliver a 400MW facility years ahead of a conventional grid-connected timeline," said Bradd Lewis, RHAELM's chief executive. JERA brings land and power, and says it generates about a third of Japan's electricity.

Power moves inside the fence

That logic is spreading. In Texas, administrative law judges at the Public Utilities Commission released a proposed decision on Wednesday on El Paso Electric's application to build a 366MW gas facility, the McCloud plant, to serve Meta's $10bn, 1-gigawatt data centre in northeast El Paso, according to Inside Climate News. The judges found the utility failed to adequately consider alternatives and did not issue a request for proposals, and recommended approval only on condition that El Paso Electric does not pass capital and operating costs to ratepayers. Without that condition, they recommend denial. The five PUCT commissioners have not scheduled a vote.

The McCloud plant would use 813 modular natural gas generators from Enchanted Rock, at an estimated cost of $499m, and would supply Meta exclusively for five years before connecting to the wider transmission system. Meta would carry the costs for those first five years.

Regulators are also watching the consequences. New Jersey's Department of Environmental Protection fined a Vineland AI data centre operator $1.07m, an enforcement action announced on Sept. 22, after the facility installed and operated 62 natural gas generators without required permits, Data Center Knowledge reported. The operator, identified as DataOne, disputed the determination regarding the temporary generators but said it would apply for air permits, according to the New Jersey Monitor.

"AI data centers are increasingly becoming power plants as well as computing facilities," Abhijit Sunil, senior analyst at Forrester, told Data Center Knowledge. "Taking pressure off the grid doesn't eliminate an environmental cost."

Cooling is now a construction problem

Power is only half of the physical build. A sponsored opinion piece in Data Center Dynamics by Bill Tierney of The ProLift Rigging Company argues that developers are increasingly taking on generation, storage and distribution themselves, because high-voltage transmission lines and substations can take years to develop and large transformers remain constrained by manufacturing lead times. The practical consequence is that power strategies have to be resolved in dimensions, weights, clearances, crane capacities and installation windows, not just megawatts.

Liquid cooling adds its own dependencies. In a Data Center Knowledge analysis published on Thursday, the argument is that N+1 redundancy on paper can collapse into a single failure domain when pumps, computer room air handlers, chillers and coolant distribution units share one supervisory controller, network switch, control power source or critical sensor. The machines can be mechanically redundant without being operationally independent. As coolant distribution units, variable-speed pumps, control valves, sensors and leak detection are added, the control and communication layers grow faster than the piping drawings do.

Heat, meanwhile, keeps eroding the economics of solar plants. pv magazine reported on Thursday that crystalline-silicon modules typically lose around 0.4% to 0.65% of performance for every 1C above 25C, and that active cooling remains a hard market case even after this summer's heat waves.

Who pays, and who is told

Hydro-Québec opened a hearing in Montreal on Thursday asking the Régie de l'énergie to approve a new rate for data centres above five megawatts that would raise energy prices to an average of 13 cents per kWh, against the 6.82 cents per kWh such facilities currently pay on average, the Globe and Mail reported. "The era of energy surpluses is now behind us," said Sarah Trabelsi, the utility's chief of costs and pricing. Hydro-Québec says data centres covered by the new rate consume 190MW at peak today and could reach 1,000MW by 2035. Google and environmental groups including Greenpeace are among the parties. The first part of the hearing runs to Oct. 9.

Transparency is being contested in Europe too. POLITICO reported on Wednesday that Lighthouse Reports filed a complaint under the Aarhus Convention accusing the European Commission of shielding data on how much energy and water individual data centres use. According to the Commission's own figures, Europe's data centres used 20.7 terawatt-hours of electricity and more than 8 million cubic metres of water in 2025, up 26% and 52% respectively on 2024, but the data is published only in aggregate.

In the United States, the Sierra Club said Ameren Missouri's long-range plan filed with state regulators would add 5,400MW of gas by 2032, an increase of 1,700MW, delay coal closures including two Labadie units by six years to 2042, and cut pre-2030 solar investment by 900MW. Ameren dropped its carbon dioxide reduction goal from the plan's promotional materials.

The demand side keeps growing. Bain and Company estimated in a report released on Tuesday that the AI industry must generate $6tn in annual revenue by 2031 to justify infrastructure spending that could reach $1.5tn a year, and that data centre sizes and costs are doubling roughly every 12 to 16 months. In China, SemiAnalysis estimates ByteDance accounts for roughly one-fifth of delivered data centre capacity, according to the South China Morning Post.

Supply is trying to catch up. Fervo Energy said on Thursday it had started selling electricity from its Cape Station enhanced geothermal plant to the grid on Sept. 30, one day ahead of schedule, with the first block built in 23 months and future blocks targeted at 18 months. Nebius signed a 50MW lease with AIB Data Centers for a site in the southeastern United States, with the first data hall due within 10 months.

Google, for its part, is testing whether any of this can leave the ground. Its Project Suncatcher satellite launched on Thursday aboard a SpaceX rocket, carrying four Tensor Processing Units and a kilowatt of solar power, and will fire the chip in 15-minute bursts to avoid straining power and thermal management, TechCrunch reported. A peer-reviewed version of Google's orbital data centre white paper appeared in Joule the same day. Travis Beals, the Google executive managing the project, said the company is looking at workloads five years out because the rockets needed to scale orbital data centres do not yet exist.