Trump and Data Center Electricity Supply

Today's post will likely show the shortcomings of this blog being a one-man show. The topic of this post could really benefit from extensive research that would require days or even weeks. I have had a couple of hours to devote to it. Therefore, this post won't be all that it could or should be. It is what it is. The topic in question was provoked by remarks made by cult leader, convicted felon, and failed President Donald Trump during his "60 Minutes" interview about which I wrote yesterday. In a discussion about AI and Nvidia chips, Trump, as he tends to do, suddenly changed topics and started to talk about electricity production, saying:

Right now we're winning it because we're producing electricity like never before by allowing the companies to make their own electricity, which was my idea, which nobody, frankly, had thought of.

These massive plants that are being built are building their own electric generating plants along with the plant itself. And that gives them all the electric they need without going to an old grid that's, you know, 150 years old. And-- they're makin' it-- themselves, and then they're selling back any excess electricity into the grid, so we benefit in all ways.

But most importantly, it allows the c-- the companies to go immediately forward. We're getting-- approvals done in two and three weeks. It used to take 20 years.

My default position is that nothing Trump says should be accepted as fact. To the contrary, my belief is that if Trump says something, it is likely to be false. With that bias in mind, I decided that I wanted to explore these remarks in more depth and determine how much, if any, was true.

In the first paragraph of his remarks, Trump asserts that "we're producing electricity like never before by allowing the companies to make their own electricity" and that this was his idea. Neither of these claims is true. It is true that the United States is producing record amounts of electricity. Much of that was the result of policies implemented during the administration of former President Joe Biden. Biden incentivized renewable energy projects, and the majority of new power capacity has come from renewable sources. According to the Federal Energy Regulatory Commission (FERC), 88% of new U.S. electrical generating capacity added during the first eight months of 2025 has come from solar and wind. In fact, solar energy has been the largest new source of electricity generation every month for two years. The growth of renewables is expected to continue despite impediments created by the Trump administration.

By way of background, the tremendous expansion of data centers spurred by AI investments has created huge new demand for electricity. Traditionally, a customer requiring large amounts of electricity is beholden to the local electrical utility to supply the power. Electrical utilities have a duty to serve all of their customers and, therefore, planning for a new project is extensive and must consider the ramifications for the entire electrical grid. A relatively small project such as installing high-powered commercial electric car chargers can often take a year or more because the utility must order and install new transformers, power lines, and other equipment, and ensure that the new installation does not negatively impact service to existing customers. A data center requiring many times that amount of power can take years of work by the local power company. The tech companies building data centers prioritize speed and are simply not willing to wait such lengths of time. Therefore, they have sought alternative arrangements.

One of the most common solutions is referred to as "co-location" in which power generation facilities and data centers are situated in close proximity to each other. The most common version of this has been for new data centers to be built near electrical generators. An alternative is for new generation facilities to be situated in close proximity to new data centers. While it is true that Trump has been encouraging the second version of co-location, there simply has not been time for any projects that he has influenced to come online. While some co-location projects that preceded Trump have entered production, they are far from being the leading sources of new electricity generation. The vast majority of new electricity capacity has come from utility investments and, as stated above, from renewable sources. Needless to say, no idea related to co-location was first thought of by Trump.

Two priorities drive electrical generation co-location for data centers. The first, of course, is the simple need for a stable source of electricity. The second is speed. As noted above, tech companies who are racing to be the leader in AI technologies don't want to wait for slow-moving legacy utilities to go through their normal processes. Co-locating is one way to speed up electrical connections. The companies are not too concerned with the details of how the electricity is produced, as long as it can be done quickly and at a reasonable cost. Microsoft, for instance, struck a deal last year to activate a nuclear reactor at the Three Mile Island site in Pennsylvania. Unit 2 at the site suffered a nuclear meltdown resulting in the most serious radiation leak in U.S. history in 1979. The Guardian reported that "Constellation closed the adjacent but unconnected Unit 1 reactor in 2019 for economic reasons, but will bring it back to life after signing a 20-year power purchase agreement to supply Microsoft’s energy-hungry data centers". In another example, Meta just signed an agreement with ENGIE North America to purchase 100% of the production from ENGIE’s new 600-megawatt (MW) Swenson Ranch Solar project. Meta has also agreed with the electrical utility Entergy to have three new gas-powered plants built especially to power a new data center in Louisiana.

What Trump says in his second paragraph above is not actually what is happening now, but rather what is likely to happen in the future. An executive order signed by Trump in July will speed up permitting and other bureaucratic issues around co-location projects. But it is still too early to start seeing such projects take off. What is happening is the creation of a new market in which companies capable of developing power generation facilities are competing with local utilities to build the co-located generators. Trump is also encouraging the new generators to be powered by coal, which, ironically, would generally slow down such projects. It is significantly faster to build solar powered generation facilities.

In my admittedly limited research, I did not find any evidence that permits for co-located power generation facilities have been provided in "two and three weeks" as Trump says in his third paragraph. In fact, I am not sure that the Trump administration has provided any such permits. Rather, as best I could tell, they are still in the rule-making process. It is not true that permits have previously normally taken 20 years to be provided.

One thing that I did discover is that the Department of Energy has identified 16 federally owned sites that it wants to make available for the construction of data centers and co-located power facilities. The idea is that companies would lease the sites and build the necessary infrastructure. This seems like an incredible intrusion by the federal government into the data center business.

The bottom line is that, as expected, nothing that Trump said is true. However, he is highlighting an important topic, and what he describes could be true in the future. Due to investments in AI, many new data centers are being built, and those facilities have massive demands for electricity. So much so that they are raising electricity prices for the rest of us. Obviously, the tech companies don't care if we have to pay more because of them, but they do care if they have to wait years for their electricity supply. Therefore, they are looking for better ways to obtain power, and Trump is attempting to assist them.

Trump appears to detest the environment and is actively encouraging as much environmental destruction as possible. He has created impediments to the most promising source of electricity generation: solar and wind projects. Instead, he is encouraging coal-fired plants. Because Trump is undermining environmental protections, these new facilities could become significant future sources of pollution. Moreover, new co-located power generation facilities are not as simple as they sound. There are a host of issues, such as whether or not they are connected to the electrical grid, and if so, what sort of services the local utility is supposed to provide. With many stakeholders, several of whom are at odds with each other, building new co-located generators may run into a number of hurdles. In the end, co-located facilities may take as long to get running as utility-supplied power took to supply in the past.