"US Data Center Power Shortage: Rapid Delivery Is Key"

Gas Turbines Operational by 2028, SMRs After 2030
Spotlight on Power Generation Fuel Cells and Solar Facilities
Hana Securities: "Bloom Energy and LG Energy Solution to Benefit"

The power shortage in the United States is becoming increasingly severe. This is due to the rapid increase in the construction of data centers for artificial intelligence (AI). The development of power grids connecting existing power plants and data centers continues to be delayed. On September 17, Hana Securities emphasized in its report, "On-time, On-Site: Who Is Faster?" that, in the short term, attention should be paid to solid oxide fuel cells (SOFC) for power generation and solar power, both of which can meet tight delivery schedules.

Power Supply Is the Top Priority in the United States

Due to the electricity shortage, the Trump administration is even granting tax credits for coal used in power generation. The country is effectively mobilizing all available power resources. However, for gas turbines, the earliest delivery is expected in 2028, and small modular reactors (SMR) will only be commercially operational after 2030. As a result, the primary criterion for selecting a power source for data centers has become "fast delivery."

On-site power generation, which produces electricity directly within the data center premises, remains at a supplementary level. However, as the importance of fast delivery increases, the number of contract cases is rising. Notably, over the past year, on-site demand has surged, and Bloom Energy forecasts that by 2030, approximately 38% of data centers will adopt on-site power generation. The proportion of data centers relying solely on on-site power is also expected to reach 27% by 2030.

In addition to the advantage of fast delivery, on-site power generation does not require transmission line connections, making it free from power grid bottlenecks. Currently, the waiting time to connect to the power grid in Northern Virginia, the region with the highest concentration of data centers, is up to seven years.

Focus on Companies That Can Meet Fast Delivery

Under the Trump administration's OBBBA Act, fuel cells are now eligible for a 30% tax credit, and energy storage systems (ESS) have been excluded from early phase-out. Hana Securities analyzed, "Although fuel cells and solar power are still less competitive in terms of price compared to combined cycle gas turbines, the demand for fast delivery is overcoming their lack of economic viability."

Bloom Energy is the leading company in the development of solid oxide fuel cells (SOFC) for power generation in the United States. Since SOFCs use natural gas as fuel, rapid power supply is possible as long as gas infrastructure is in place. Bloom Energy has expanded its production capacity to 2GW in just three years and is signing contracts with data centers in quick succession.

First Solar is the only cadmium telluride (CdTe) solar module manufacturer, and the short construction period for solar power is likely to stand out amid the current power shortage. The exclusion of Chinese companies from the U.S. module market is also a positive side effect. Hana Securities stated, "ESS is benefiting from the trickle-down effect of solar power," and added, "In particular, we expect LG Energy Solution, which can produce batteries locally in the United States, to see expanded benefits."

In addition, Equinix, the largest data center colocation provider, is noteworthy for its strong bargaining power in bulk purchasing within the data center infrastructure sector. Colocation is a service that provides companies with space, power, cooling, security, and network connectivity within a data center so they can install and operate their own servers and network equipment. Equinix, in collaboration with Bloom Energy, is operating more than 100MW of SOFC facilities at 19 data centers.

This content was produced with the assistance of AI translation services.