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Data center site selection shifts as power constraints drive value
In PJM, capacity prices rose from $28.9 per megawatt-day for 2024-2025 to $329.2 for 2026-2027, underscoring how timing and delivery capacity matter more than land or fiber.
Commercial Observer says a data center site with land, fiber, permits and a ready customer can still be “nearly worthless” if electricity cannot be delivered when needed.
The outlet points to PJM, where capacity prices jumped from $28.92 per megawatt-day for 2024-2025 to $269.92 for 2025-2026, then climbed to $329.17 for 2026-2027.
As a result, developers are reframing site selection around grid deliverability, including where a substation is located, how much capacity is available, and when the first tranche of power can be energized.
Commercial Observer adds that the mismatch between AI deployment timelines, measured in months, and longer transmission, substation, and generation buildouts is pushing more energy-focused solutions into the development conversation, including behind-the-meter generation, co-generation, and direct energy partnerships.