• Behind-the-meter projects face stranded-asset risk
• Early community engagement reduces delays

The market is repricing risk for data center assets as the industry prioritizes projects that bring their own power through behind-the-meter (BTM) solutions, said industry officials speaking at NPM’s DG and Data Center conference held on October 22 in New York City.

“The industry is looking at repricing risk,” said Don Dimitrievich, portfolio manager at Nuveen Energy Infrastructure Credit adding that evaluating assets based on needs is “healthy” for the market.

Dimitrievich said lenders are increasingly evaluating a borrower’s ability to bring their own power to projects as timely grid connected resources becomes increasingly difficult to access.

BTM solutions are providing new opportunities for distributed generation developers, though lenders are still trying to work through how to structure financing for these facilities as they carry their own risks.

“Stranded asset is a risk lenders are evaluating for behind-the-meter assets,” said Dimitrievich, referring to a powered asset that may become economically unusable or unprofitable before the end of its life span, leaving the borrower unable to repay its debt.

This is a relevant risk as projects are often built to power data centers with one tenant, so if a tenant leaves, there may not be an alternative offtake for the electricity.

BTM power solutions, though, are becoming almost standard when building digital infrastructure projects.

Daniel Feitelberg, co-founder of Adara Infrastruture, said that his company is building out co-located fuel cells at behind-the-meter projects alongside enterprise data centers between 25-50 MW in California to ensure these assets get sufficient power.

Early engagement

Colin O’Gallagher, founder of IFSX said that community engagement needs to be the first thing developers prioritize when building out behind-the-meter facilities for data center projects.

Syed Ahmed, Managing Director at Apterra Infrastructure Capital, agreed.

“We should be starting community engagement way before,” said Ahmed, adding that when done early, community engagement can reduce permitting, litigation and construction-delay costs.

Multiple panelists agreed that when done right, projects can run smoothly.

“We just worked on a CAD 10bn data center in Atlantic Canada for Anthropic which has a 2.2GW onshore wind project to power the project which worked well as they started off with successful community engagement,” said Dimitrievich, referring to EverWind Fuels’ 420 MW Point-Topper data center in Nova Scotia.

The project will begin with an initial 95 MW phase in late 2027, and EverWind said it will target a 325MW expansion by the end of 2028, subject to regulatory conditions, according to public reporting.