The new real estate in data center investing isn’t land, it’s electricity. Here’s why the smartest investors now secure power before they buy a single acre.
The inversion from land first to power first completly changes the capital allocation pecking order. Companies like Eaton are now upstream in the value chain rather than being ancillary vendors becuase electrical capacity has become the binding constraint on growth. The real insight here is recognizing that power rights are starting to behave like spectrum rights where scarcity creates optionality value independent of utilization rates. This framework explains why we're seeing hyperscalers willing to pay premiums for sites with energized connections even when the physical infrastructure is suboptimal.
Locating data centers in areas with hydro power has some strategic advantages, but there are significant risks to consider, especially regarding resource constraints, reliability, environmental impact, and community relations.
The inversion from land first to power first completly changes the capital allocation pecking order. Companies like Eaton are now upstream in the value chain rather than being ancillary vendors becuase electrical capacity has become the binding constraint on growth. The real insight here is recognizing that power rights are starting to behave like spectrum rights where scarcity creates optionality value independent of utilization rates. This framework explains why we're seeing hyperscalers willing to pay premiums for sites with energized connections even when the physical infrastructure is suboptimal.
I believe places with hydro power is a good strategic location for data Center
Locating data centers in areas with hydro power has some strategic advantages, but there are significant risks to consider, especially regarding resource constraints, reliability, environmental impact, and community relations.
Interesting. It's such a big game to figure the power out right now. Fun to watch it all unfold.