If I have half a billion burning a hole in my pocket, and in progress on a contract to build a data center, I would want the power agreement tied down before the land clearing took place, because I would be spending another half billion in operations over the next 7 years. Getting the local utility company to extend the grid to my selected location is a matter of 6 weeks of communications and the construction to lead off with the building of substation to the utility companies requirements.
The solar company or wind company that wants to sell my data center power and be backed up by the utility when the sun does not shine and the wind does not blow. The utility has a rate to provide this highly variable service, it is far in excess of the fixed rate that I expect to pay for my datacenter, as my customers in the data center are fine with 20cents/KWH and I am fine with 18cents/KWH daytime rates. My customers expect 10/KWH at night, Ill live with 9/KWH to pay for the power part of a data center. The solar and wind companies can offer me 16c/KWH daytime and perhaps just pass through 25c/KWH night time from the utility. Not one of these people have told me of the 10032c/KWH they are going to need to invest in storage.
This is exactly opposite the demand curve. The only thing I can offer as the DC operator is that 80-160 hours a year I would be willing to fire up both my A and B side generators and use a bit of my UPS lifetime to cut my load off the grid. The utility at least has to guarantee me that they will pay for the NG cost for the generators.
If I were building 10 data centers that could be turned on and off in 10 minutes, cheap unreliable power would be attractive, attractive enoght to hire weather forcasters 24/7/365 to tell me top up my 10 minutes of backup power at prime rates because it certain that the automation will flip the switch.
But I am building 2 data centers to finance the other 8 over the next 20 years, it is right there in my business plan. With a pair of small power plants within my grid operator footprint, I do not have to invest a ton in storage and THE COSTS ARE FIXED UP FRONT. My investors only risks are returns on AI vs inflation and interest rates. If someone is willing to produce a must deliver contract at anything under 15c/KWH and pro rate that with inflation as a data center, they have a customer of the datacenter and their tenates. The data center clients are free to have a contract with the utility and the solar wind to shut down compute for a fee/hr, those clients can offload to my competitor, I really cannot write a contract telling them they must.
I have to figure when I am contracting power for the 9th and 10th data center, the power provider has figured out how to make this deal profitable. The weathermen are already on payroll, so that is a fraction cheaper per region. Most importantly I have a standard contract to take to solar/wind provider, the nuclear competitor has figured out the downsides, the utility has gotten over dreams of windfall profits and the customer of the data center has figured a strait forward load shed agreement with both the DC operator, the utility and the provider.
Or a Power Plant operator can sign a fix rate contract with a data center to maintain 92% utilitzation of a stated max for 10 years with the rate specified at the time of signing. Any growth is on another contract, directly related to the cost of construction. Nuclear or NG, 10 year contract with a 10 year option for 99.99% power uptime is 3 pages of tables on a contract. Solar, Wind has to be able to offer the same known cost and that same 99.99 uptime.