Speed vs. Process
The mismatch between data center construction and energy infrastructure timelines
Data Center Shell
Source: CRS Report R48762
Energy Infrastructure
Source: CRS Report R48762
A data center can be built in little more than a year. But the power plants, transmission lines, and pipelines needed to fuel it can take a decade or more. This timeline gap is one of the central challenges facing the industry and regulators.
The Infrastructure Timeline Problem
Each type of energy infrastructure faces its own permitting and construction hurdles. Here is the full spectrum:
Time to Permit and Build Energy Infrastructure
The FERC Interconnection Bottleneck
Mandatory First Step
Before any new power plant can connect to the grid, it must complete a FERC (Federal Energy Regulatory Commission) interconnection study. This determines grid impacts and costs. The queue is years long, and studies can take 2 to 3+ years on their own.
Source: CRS Report R48762, FERC Order No. 2023
FERC's interconnection queue has become a critical chokepoint. Data centers and renewable projects alike are waiting in a growing queue with no guaranteed timeline for their studies to even begin.
The Permit Maze: 7+ Federal Agencies
No Universal Permit
There is no single federal permit for energy infrastructure projects. Instead, developers must navigate case-by-case approvals from multiple agencies, each with different timelines and requirements.
Federal Agencies Involved
- FERC: Interconnection, cost allocation, transmission siting
- NRC: Nuclear licensing and relicensing
- Army Corps of Engineers: Section 404 wetland permits
- EPA: Air and water quality review
- DOI Agencies: BLM, National Park Service, Fish and Wildlife Service, Forest Service (land use, environmental review)
- DOE: Some fossil and nuclear facility reviews
Source: CRS Report R48762
State Permits Under Federal Law
In addition to federal agencies, developers must also secure state-level permits required by federal statute:
- NSR (New Source Review): Clean Air Act preapproval
- Title V Operating Permit: Clean Air Act ongoing compliance
- CWA Section 401 Certification: State water quality certification
- CWA Section 404 Permit: Wetland and water impact mitigation
- NPDES Permit: Wastewater discharge authorization
- Class VI Wells Permit: CO₂ injection (if applicable under SDWA)
- CZMA Consistency: Coastal Zone Management Act compliance (if applicable)
Source: CRS Report R48762
The FERC Backstop: Legal but Never Used
Dormant Authority
Federal law grants FERC "backstop" siting authority for interstate transmission lines, meaning FERC can approve lines over state objections if they serve the national interest. However, this power has never been used. The Department of Energy has also never designated any Federal Energy Corridors, further limiting its impact.
Source: CRS Report R48762
This unused authority highlights a broader challenge: even where federal law exists to accelerate permitting, regulatory and political constraints prevent its deployment.
The Co-location Debate
New FERC Review (Feb 2025)
FERC has opened a review of whether data centers should be allowed to co-locate with their own power generation or avoid connecting to the public transmission system. The concern is that developers may be sidestepping traditional utility infrastructure costs and grid reliability obligations.
Source: CRS Report R48762, FERC Feb 2025
If restrictions are tightened, data centers will face longer waiting times for grid connections. If they remain loose, utilities may struggle to recover costs. Either way, the rules are in flux.
How Developers Are Responding
Rather than waiting for traditional energy infrastructure, data center operators and tech companies are adopting workarounds:
Self-Supply & Behind-the-Meter
Build or contract for power plants directly on-site or on company land, avoiding grid interconnection delays.
Restart Retired Plants
Restart old nuclear or coal plants (e.g., Microsoft and Constellation acquiring Three Mile Island Unit 1 in Pennsylvania).
Locate Near Existing Generation
Build data centers close to existing power plants to minimize new transmission needs.
Long-Term PPAs
Sign 10+ year Power Purchase Agreements with renewable developers or utilities to lock in supply.
BYOG (Bring Your Own Generation)
Texas 2025 law allows large loads to build their own generation and bypass traditional utility planning.
Federal Land Sites
Develop on federal land (DOE has designated 4 sites) where permitting may be streamlined.
Permitting-Friendly States
Locate in states with faster permitting processes and fewer environmental review requirements.
State-Level Incentives
Leverage state tax credits, permitting fast-tracks, and economic development programs to accelerate approval.
Source: CRS Report R48762
The Core Problem
Data centers demand power on a timeline that modern permitting processes cannot match. Developers respond by circumventing traditional infrastructure, restarting old plants, or relocating to friendlier jurisdictions. In the process, communities bear unforeseen impacts, and the grid's stability and equitable cost-sharing are at risk.
Until permitting timelines for energy infrastructure are fundamentally reformed (or data center growth slows), this mismatch will remain a defining challenge for energy policy.