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On 2026-07-27 @duncancampbell says data centres are already building gigawatts of…

2026-07-27 · 15:04 UTC ·@duncancampbell ·2 min read

Brief

Duncan Campbell (@duncancampbell) argues that data-centre behind-the-meter and off-grid power—gigawatts of reciprocating engines and aeroderivative turbines—will migrate to the grid and supply the low-utilization, dispatchable reserve capacity needed for high-renewables systems. Financed by high-margin AI/compute, this path avoids costly, always-on CCGT builds and keeps downside risk with BTM/AI firms rather than ratepayers.

Why it matters

On 2026-07-27 @duncancampbell says data centres are already building gigawatts of behind-the-meter (BTM) power using reciprocating engines and aeroderivative gas turbines, deployed off-grid today as prime power.

Key details

  • Those BTM systems will likely connect to the grid over time and provide low-utilization, dispatchable reserve capacity (complementing high solar/wind/battery) because they are low-capex, high-opex units that run only when needed, unlike always-on CCGTs.
  • High-margin AI/compute customers are financing this capacity, so the build-out avoids ratepayer/taxpayer costs; if AI demand collapses, the financial downside falls on BTM/AI firms rather than utility ratepayers.
Source evidence

BTM and off-grid are not anti-grid. They’re exactly what the grid needs.

High-renewables grids require a source of well-funded, dispatchable reserve capacity. Solar and wind are intermittent, and batteries handle average daily fluctuations well, but not extreme events. Something that has puzzled the grid policy community for ages is: who will pay for, build, and maintain that low-utilization capacity? Until recently, we had no idea.

Today, we’re building gigawatts of “behind-the-meter” power for data centers. These are engines and turbines that typically wouldn’t be used for baseload operations. On the grid, big reciprocating engines and smaller aeroderivative gas turbines are used for peaking, essentially backup power, and renewables balancing. It’s only off-grid that they’re used for “prime power.”

While these engines and turbines are running baseload today to serve their data center customers, the vast majority of these systems will connect to the grid over time. Their customers want the grid, and their own financing works better when there is a grid connection. There’s no reason to avoid the grid once it gets its act together and actually offers to connect.

When they do connect, these BTM DCs will bring gigawatts of flexible backup power to the grid. And unlike the CCGTs many utilities are begging to build at astronomical costs, they won’t run all the time, polluting 24/7 and locking in long-term emissions. They’ll run only when they’re really needed because they’re low-capex, high-opex systems.

That’s exactly how the grid is designed to work, and a perfect complement to high solar/wind/battery systems.

The dispatchable reserve capacity we direly need to scale solar, wind, and batteries to high penetrations will have been paid for by high-margin compute. Not by ratepayers or taxpayers.

And if AI is a bust (imagine it’s a huge bubble and it all deflates) then those costs will be borne entirely by the BTM and AI companies. Compare that with a scenario where we massively upgrade the grid immediately to serve AI, and then all that demand goes poof. That would be a disaster for ratepayers who are all ready exasperated with high prices.

If you’ve been told BTM and off-grid power are anti-grid, ask what the alternative is and if its ever been shown to have momentum. So far, this is the most promising path to actually building gigawatts of dispatchable grid capacity without putting the cost, and the downside risk, on ratepayers.