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Utilities and Power for Data Centers Forum Brief

Building a Bridge between AI and Sustainable Energy for Powering Data Centers

There is an exponential growth in computational demands driven by artificial intelligence (AI) causing the current energy ecosystem to face significant challenges in grid capacity, infrastructure development, and sustainable technology integration.

In April 2025, KPMG LLP sponsored a Power & Utility Executive Share Forum with leading experts from utilities, data center developers, and construction companies to help tackle the unique challenges of powering the next generation of data center infrastructure.

Key themes

AI-Driven Energy Transformation

  • Unprecedented growth in data center energy demands
  • Challenges in grid capacity and infrastructure
  • Need for innovation, flexible energy solutions

Collaborative Innovation

  • Breaking down traditional industry silos
  • Creating mutually beneficial partnership models
  • Aligning technological advancement with sustainability goals

Challenges and Solutions to Explore

The Forum synthesized complex challenges facing the data center and energy infrastructure ecosystem. These critical and interconnected issues require a collaborative, innovative approach from utilities, data center developers, regulators, and technology providers.

Challenges

Examples

Potential Solutions

Grid Capacity Constraints: Insufficient transmission and generation infrastructure to meet rapidly growing data center demands.
  • 10-year average for transmission projects
  • Limited transmission capacity
  • Overwhelming interconnection requests
  • Advanced intake and queue management
  • Accelerate project timeliness
  • Explore interim off-grid options
Labor and Supply Chain Limitations: Critical workforce shortages and complex skill requirements across the industry.
  • 600,000 workforce gap
  • Complex skill requirements
  • Competing power & data center demand
  • Apprenticeship programs
  • Military/veteran recruitment
  • Prefabrication techniques
Technological Complexity and Load Variability: Unprecedented load profile changes with AI computing.
  • Millisecond-level load variations
  • 98% to 60-70% load factor shifts
  • AI computing challenges
  • Advanced energy management systems
  • Real-time load monitoring
  • Flexible grid integration models
Contractual and Financial Risk Management: Uncertainty in long-term load forecasting, risk allocation, and contract structures.
  • Long-term forecast uncertainty
  • Stranded asset potential
  • Insights gap between demand & supply
  • Hybrid pricing structures
  • Performance-based tariffs
  • Collaborate on risk models
Sustainable Energy Transition: Balancing renewable energy goals with infrastructure demands.
  • Conflicting corporate goals
  • Demand loads conflict renewable sources
  • Regulatory pressures
  • Comprehensive renewable roadmaps
  • Joint sustainability investments
  • Carbon offset programs
Community Engagement and Infrastructure Development: Addressing local concerns and demonstrating economic benefits.
  • Local infrastructure concerns
  • Limited job creation perception
  • Environmental impact fears
  • Transparent and proactive communication
  • Community benefit programs
  • Local workforce development

While significant insights were gained and potential solutions identified, substantial work remains. The forum highlighted the critical need for continued collaboration, innovative thinking, and adaptive strategies.

KPMG is committed to serving as a catalyst for industry transformation by facilitating cross-industry conversations, conducting research and developing innovative solutions.

KPMG helps develop an infrastructure and capital projects strategy, uncover funding opportunities, plan programs, and deliver and manage projects.

With the right combination of strategy, asset management, financial planning and data-enabled methodologies, organizations can deliver successful infrastructure programs.

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Meet our team

Learn how KPMG can help develop an infrastructure and capital projects strategy, uncover funding opportunities, plan programs, and deliver and manage projects.

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George Spakouris
Principal, Advisory, US Head - Infrastructure, Capital Project & Climate Advisory, KPMG US
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Reid Tucker
Principal, Capital Projects Advisory, KPMG US
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Clay Gilge
Practice Leader, Major Projects Advisory, KPMG US
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Frederick Morris
Managing Director, Infrastructure, Capital Projects, and Climate Advisory, KPMG US
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Image of George Spakouris
George Spakouris
Principal, Advisory, US Head - Infrastructure, Capital Project & Climate Advisory, KPMG US
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Image of Reid Tucker
Reid Tucker
Principal, Capital Projects Advisory, KPMG US
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Image of Clay Gilge
Clay Gilge
Practice Leader, Major Projects Advisory, KPMG US
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Image of Frederick Morris
Frederick Morris
Managing Director, Infrastructure, Capital Projects, and Climate Advisory, KPMG US
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