• Madison Energy is developing more than 100 sites in its USD 2bn, 1 GW community-focused infrastructure initiative
• Sites are primarily storage and financed in partnership with AI companies in PJM

Madison Energy Infrastructure CEO and co-founder Richard Walsh said the company is looking to “turn the tables” on how distributed generation resources work with data centers.

In a recent interview with NPM, Walsh spoke about the company’s Community Infrastructure initiative, which targets 1 GW of developed projects by 2028 via USD 2bn in capital and partnerships with AI companies like EdgeConneX. Walsh said Madison Energy “starts with the community and works backwards.”

He said the initiative enters communities to prepare the grid for data centers to come to town “on the community’s terms,” then reporting to data center partners how many batteries can be supported on the local grid and then developing and operating those projects.

Madison Energy is developing more than 100 individual sites under the initiative — ranging from 5 MW to 20 MW, some of them front-of-meter and others behind-the-meter. He said that location “matters now more than ever, and that you can increase utilization of the grid by intelligently siting these batteries on the grid.”

Walsh said the projects acquired so far as part of the 1 GW goal are primarily battery energy storage, but some also have solar assets co-located with them. A majority of the projects financed in partnership with AI companies are in the PJM Interconnection territory.

NPM interconnection queue data is tracking seven pre-operational projects under development by Madison Energy in the PJM territory, including several in Virginia and Pennsylvania. In total, NPM is tracking 17 pre-operational projects across PJM, MISO and other ISO territories.

Under these data center partnerships, Madison Energy receives a capacity payment, which helps the company build the transmission and distribution upgrades necessary for the storage capacity and data center support. In turn, hyperscalers are able to report to utilities and RTOs that their capacity is supported through the storage assets.

“And so the beauty is then that battery can be used for other things, other applications that benefit the community if it’s a front-of-the-meter project, or that benefit the customer if it’s a behind-the-meter battery project that the hyperscaler is claiming accreditation from,” Walsh said.

As a result, he said some of the contracts executed so far in the 1 GW portfolio are achieved through bilateral contracts, while others are through Power Purchase Agreements (PPAs) with local utilities.

Walsh added that the PJM market has been of particular interest for storage contracts lately, though the recent decision with the Interim Resource Adequacy Service (IRAS) proposal has shaken that confidence.

On October 12, the Federal Energy Regulatory Commission (FERC) denied PJM’s IRAS proposal, which aimed to curtail large loads from hyperscalers when power systems are stressed in order to maintain reliability. Prior to FERC’s rejection, stakeholders voiced concerns about the curtailment mechanism’s design and the rules around Bring Your Own New Capacity.

“That brought some uncertainty because, originally, we thought we might be able to put a battery anywhere in PJM and give a hyperscaler credit anywhere in PJM for that battery,” Walsh said. “Obviously that was sort of shot down, I would say, with the IRAS ruling that PJM came out with, but … the power is with the states and the individual utilities, so we certainly like to go as local as possible there and work.”

If a new version of the IRAS proposal is approved, Walsh said Madison Energy remains interested in bilateral contracting with data center customers inside PJM.

As for the 1 GW Community Infrastructure Initiative, Madison Energy’s project pipeline is underway.

The first project from that portfolio could achieve operation by early 2027.

When announcing the USD 2bn initiative in September, the company said its operating portfolio is expected to surpass 1 GW later this fall and target another gigawatt by 2028, potentially doubling its footprint in two years.

Walsh said Madison Energy plans to continue to announce projects related to the initiative on a near-weekly basis going forward, as the company “remains bullish” in the storage market.

Last year, Madison Energy acquired NextEra Energy Resources’ distributed generation development platform. The transaction included operating solar and energy storage assets and a development pipeline spanning 25 states.

The company also acquired three projects from Carson Power in Illinois last month.