Regulators start saying no, and geothermal says yes
The week of Sept 21: North Carolina rejects a data center gas plant, Northern Virginia closes its doors, the EU adopts a data center rating scheme, Fervo delivers first geothermal power, and Nscale raises $3.4B ahead of its IPO.
Welcome to the first weekly rundown from Carbon Neutral Data Center. Every Monday we cover what changed in AI infrastructure power, carbon, policy, and capital, and what it means for the people building and buying it.
The big picture: regulators are no longer approving capacity on faith. Last week, one state rejected a gas plant built for data center demand it did not trust, the largest US data center market paused new applications, and federal regulators told grid operators to standardize what large loads must put up before utilities build for them. The developers who win the next phase will be the ones who can show firm demand, firm power, and a credible emissions plan.
Power and grid
North Carolina denies Duke's $584 million turbine. The Utilities Commission rejected a 255 MW gas unit, calling Duke's data center load forecast "insufficiently reliable." It is the clearest signal yet that speculative demand will not be rate-based. Utility Dive
Fervo delivers first power at Cape Station. The first 33 MW block of the first enhanced geothermal plant at utility scale is online in Utah, with about 900 MW planned in total. Google holds a 396 MW PPA. Fervo Energy
DOE awards $1.9 billion to upgrade existing lines. Thirty-one projects across 26 states are expected to unlock 23 GW of capacity through reconductoring and grid-enhancing technologies. DCD
Onsite gas keeps spreading. Woodway will build a 22-mile pipeline to an undisclosed data center with its own generation, targeting 2028. DCD
Policy
FERC stays out of ComEd's Joliet dispute, but sets a deadline. Grid operators must develop standard cost-recovery agreements for large loads by mid-November. The trigger: a 1.8 GW project that met its credit requirement with a $1 letter of credit. Utility Dive
Northern Virginia tightens. Loudoun County voted for a 12-month pause on new applications, and Prince William County cut its by-right data center zone from 9,700 to 3,500 acres. DCD
California signs seven data center bills. They cover grid cost allocation, monthly energy reporting to the state, and water use reporting. Utility Dive
Texas softens its interconnection fees. A flat $100,000 study fee replaces a proposed $50,000 per MW. ERCOT's queue audit, covering roughly 474 GW, continues through December. Utility Dive
Carbon and disclosure
The EU adopts a data center rating scheme. Sites above 500 kW will be graded on energy, water, waste heat reuse, onsite clean generation, and flexibility, with first labels in 2027. European Commission
Offset-based "neutral" claims are now banned for EU consumer products. The Empowering Consumers Directive took effect on September 27. We explain what it means for data center claims in this week's deep dive, What "carbon neutral" should mean for a data center in 2026.
Capital
Nscale raises $3.36 billion ahead of its IPO. Third Point led, with Nvidia committing $1 billion by mid-November. Nscale has 55 MW active against $103 billion of contracted value. DCD
Oracle sends Blue Owl a force majeure notice over Project Jupiter. The New Mexico campus lost its gas pipeline plan in July. Power risk is now financing risk. DCD
Applied Digital sites a $3.2 billion, 210 MW campus in Alabama. It includes a $270 million, 20-year community benefits commitment. DCD
Microsoft commits more than $10 billion to the Gulf by 2030, including a Kuwait cloud region with zero-water cooling. DCD
Debt gets pricier. Goldman Sachs expects hyperscaler debt issuance of $420 billion in 2027, with AI-related spreads about 37 basis points wider than investment grade overall. Daily Caller, citing Reuters
Tracker changes this week
- Added: Delta Forge 2 (Applied Digital, Alabama, 210 MW), PowerHouse Hillwood Joliet (Illinois, 1.8 GW), and Nscale's Monarch campus (West Virginia, up to 8 GW).
- Status change: Project Jupiter moved to "at risk" after the force majeure notice.
- New deals: Nscale ($3.36 billion) and Crusoe ($3.9 billion Series F, Sept 17).
One number
65%. Google's hourly carbon-free energy share in 2025, down from 66% the year before, in a year when it matched 100% of its annual electricity use with renewables. The difference between those two numbers is the subject of this week's deep dive.
New this week
We launched with three deep dives:
- What "carbon neutral" should mean for a data center in 2026
- The firm power gap: how AI data centers are actually getting electricity
- Your AI strategy has a carbon footprint. Here's how to measure and cut it.
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