North American Power, Utilities & Midstream Powering the Data Center Wave: McKinsey Fireside Chat Takeaways

Research evidence excerpt

North American Power, Utilities & Midstream Powering the Data Center Wave: McKinsey Fireside Chat Takeaways

-build / 25% leased capacity five years ago to closer to a

50/50 split, and McKinsey expects that more balanced ownership model to persist.

• Regulatory and community friction continues to rise, increasing the need for

structured tariffs and stronger credit support. The discussion repeatedly returned to

the risk of building ahead of demand, particularly as local disagreements, zoning

restrictions, and grassroots pushback increase in certain markets. Tax revenue and job

creation remain important counterweights, but permitting outcomes will likely grow

more case-specific. Utilities and regulators have started responding with large-load

tariffs, minimum demand guarantees, up-front payments, and stronger credit

requirements. The emerging model meaningfully de-risks development with long-term

offtake assurance and visibility into the true end user matter before utilities commit

capital on behalf of broader customer bases.

• Reliability and peak management have moved to the center of the debate, with

bridge power filling timing gaps. McKinsey highlighted growing peak-load concerns

as general electricity demand rises alongside data center load, particularly after efficiency

gains such as LED adoption have largely run their course. Recently, policy discussions

have wrestled with the possibility of data centers facing curtailment ahead of residential

customers during grid emergencies, underscoring the reliability lens now attached to

large-load growth. Behind-the-meter generation, off-grid systems, and bridge power

continue gaining traction as developers seek to avoid stranded GPUs while waiting on

interconnection, procurement, and utility timelines.