00:00:54 · Maya Barkin
[00:00:54] S2: Sure. So this article's core argument is that the 2027 data center pipeline is largely locked in, but that the 2028 is not because much of that capacity still needs approvals and permits in states where the midterms could bring pauses or tougher rules. So for 2027, there's roughly three quarters of the capacity that's due to come online for the top 20 states, and that's already under construction. So today's midterms, the results are not gonna stop it. So that's why we're still comfortable with the 50 plus gigawatt gigawatt global year we laid out a few weeks ago. And the election could change the rules around how data center campuses are built, but the 2027 pipeline has a big head start already. And 2028 is the... Actually, the year that that is important to watch, and we make that argument in our article. Our model has about 62 gigawatts of US additions that year, and most of it isn't under construction as opposed to 2027. So it's mostly sitting in states that are voting for a governor in the midterms. So you've got all these projects waiting on permits, power and construction schedules while policies are being negotiated and potentially rewritten. And so the single biggest risk, I would say, isn't like a single candidate, because in many cases, both parties and candidates want developers to accept stricter terms. In the case of Texas, for example, it's a freeze that already exists. So Texas stopped issuing TCEQ permits to data center projects at the end of September, on top of an ERCOT interconnection audit that started in August. And Texas alone is close to 30% of US additions in 2028. So a few months of lost time on that one state, on that one market could move the national number. But the real difference is whether the campuses, the projects can meet the terms and keep building, and we have to wait and see what the state does and who gets elected. So what's changed since September? So in September, we said that the moratoriums weren't actually killing the build outs, and that broad conclusion has held. In September, we looked at roughly 20 gigawatts sitting inside local restrictions, and we estimated that only about 1.5 gigawatts was actually delayed, and that's still true. And some of the two biggest things that have changed is first, Texas.
00:04:33 · Maya Barkin, Jordan Nanos
So as I said, at the end of September, Abbott imposed this freeze on TCEQ permits for Datacenter projects on top of the ERCOT interconnection queue audit that began in August. And that pulls on-site power into the hold. So in September, we thought that the bring your own power was the escape route, but it isn't anymore. And then another thing that has changed is that candidates have moved of the 20 nominees that we looked at in the top states in the... There 10 governors races and nine want a pause on new construction, and the other 11 want conditions. And the split is even... Is about even by party. [00:05:32] S1: Can you And [00:05:33] S2: I can talk a bit more about, like, the difference between pauses or moratoriums and conditions and what that would Yeah, think that be imply. [00:05:43] S1: Yeah, that'd be helpful. I've got on screen the table showing that this is bipartisan. There's Democrats and Republicans that are in favor pauses or conditions. So, maybe you can define what a pause is versus Yeah. A
00:05:43 · Jordan Nanos, Maya Barkin
[00:05:43] S1: Yeah, that'd be helpful. I've got on screen the table showing that this is bipartisan. There's Democrats and Republicans that are in favor pauses or conditions. So, maybe you can define what a pause is versus Yeah. A [00:05:56] S2: Sure. So, by pause, we essentially mean a moratorium, which is a halt on the processing and issuing of permits at different levels. It could be a building permit, an air permit, a zoning halt, for example. And the difference matters because it's the difference between a projects... Between a project that's more expensive and in the case of conditions and a projects... And a project that gets stuck because conditions make a project more expensive and a pause makes it... Can delay it. So if new conditions are put in place, a developer can fund the grid update, they can redesign the cooling, they can sign the community agreement, and they can keep going. It might be slightly slower and costlier, but it has a plan to approval. And we also saw a lot of that coming anyway, like the water use studies, developers offering household bill credits to cover the infrastructure that they add, also AWS and Google dropping NDAs and being more transparent in their process. But a pause is different because the work just can't proceed for projects that don't have all of the permits in hand.
00:07:40 · Jordan Nanos
[00:07:40] S1: Makes sense. I think this map tells the story here, right? Like, if we look at 2028, it's pretty clear that it's not everywhere in The US, but these are the big states where we're tracking the biggest additions of capacity in 2028, in most cases, where people have this in their backyard, for example. Can you talk about, you know, like maybe dig in on Texas specifically a bit and just say, what is the real difference between what's going on right now in 2027 versus what's going on in 2028 when you look at the difference between candidates like Greg Abbott and Gina Hinojosa here?
00:08:21 · Maya Barkin, Jordan Nanos
[00:08:21] S2: Sure. So in the map that you showed, so we looked at different scenarios. We looked at... This is the number one where the states where it's still a toss-up or it's not entirely clear who would win, this is the scenario where the pro moratorium candidate wins. And so you can see here that 30.3 gigawatts of planned twenty twenty eight capacity could potentially be at risk. Of course, that's not the capacity. We're not saying that this could be the capacity that's delayed. It's just the capacity that is exposed, the capacity that is planned for 2028 in those states. And then we looked at the second scenario, if scroll to the next map. Right. This is where the conditions only candidates would win. And here, the gigawatts of plant capacity that are exposed goes down to 5.7. And then looking at the polls, which is the third map... So this is the most likely scenario of what is to happen. We see that it's not that as dramatic as the first map shows because only 5.7 gigawatts of plan twenty twenty eight capacity is most likely to be at risk. [00:10:03] S1: Makes sense. So when we look at like the potential outcomes here, one thing that strikes me, Wayne, maybe I can bring you in on this, is like the bipartisan So, nature when you were looking into some of these local races or any of the local politics, I think I was particularly surprised to find that this doesn't cut across party lines about whether people are in favor of conditions versus a full on moratorium.
00:10:30 · Wayne Ma, Jordan Nanos
[00:10:30] S3: Right. You know, when I when I was, like, look researching this, right, I thought, oh, probably Democrats are all on one side. Maybe they wanna pause. Republicans just want conditions. But it turns out that's not the case at all. I mean, I think a part of it is just because there's such a huge anti data center backlash that it doesn't matter if you're Republican or Democrat, if you're an ordinary resident and the data center is being built by you, it's gonna upset you either way. Right? I mean, there's a lot of anxiety over AI taking people's jobs. There's lots of misinformation out there about how much water they use or how much electricity they use or whether they're gonna raise your your tax bills or your power bills. And so I think that this is something that both Democrats and Republicans have kinda, like, tapped into in their campaigns. And so, you know, what we're seeing is that it doesn't really matter if you're a Republican or Democrat. You know, some people... You know, it used to be that, you know, states wanted the economic development. They wanted the investment. Right? They had all these tax rebates and tax incentives to bring data centers in. And now it seems like all of that's kind of going away regardless of whether... What partner you are on. [00:11:33] S1: Makes sense. Exactly. Jeremie, what's your what's your take there? Oh, yeah. Sorry. My