Grid Capacity Realities and the Emerging Workarounds

Last week we outlined how Power Purchase Agreements and interconnection queues have become bottlenecks for hyperscale development. Clearing the queue, however, is only half the battle. Even with an executed interconnection agreement, many Canadian and U.S. regions cannot deliver the full contracted load during peak periods without years of new transmission or hundreds of millions in network upgrades.

Industry forecasts now place U.S. data center load growth at 30–50 GW by 2030, yet the marginal firm capacity available on existing transmission systems is measured in single-digit gigawatts in most organized markets. This gap—between approved interconnection rights and physically deliverable power—has quietly replaced the queue itself as the binding constraint on near-term expansion.

Operators have responded with a predictable hierarchy of solutions: first, secure behind-the-meter or co-located generation that never touches the constrained grid; second, build private wires or battery firming to eliminate curtailment risk; and third, relocate to the few remaining greenfield zones that still have surplus transfer capability.

The result is an accelerating bifurcation: campuses that achieve 99.999% firmness (independence) are proceeding on schedule, while traditional grid-dependent projects face indefinite delays and escalating upgrade bills.

This week, we’ll quantify the remaining firm capacity in each major market, rank the workarounds by speed and capital intensity, and highlight transactions that were not covered last month.

So without further ado, let’s dive into our newsletter on grid capacity realities and their impact on data center development.

1. The Power Firmness Problem: Available Capacity Does Not Equal Deliverable Capacity

Even when interconnection studies are approved, many regions cannot deliver the full requested load during peak hours without significant new transmission. Projections indicate data center load growth could add 30 GW to PJM (Mid-Atlantic US) by 2030, with similar pressures in other RTOs (such as Ontario’s IESO or Texas’ ERCOT).

Result: Approved interconnection rights often come with severe curtailment risk (10–40% of hours) unless the load funds multi-hundred-million-dollar network upgrades.

2. Current Workarounds Ranked by Adoption Speed

3. Notable 2025–2026 Transactions Not Covered Last Month

4. Regulatory and Market Signals to Watch

• FERC Order 2023-A (Nov 2025 clarification): Co-located generation + load projects may now file jointly in most RTOs, shaving 12–18 months off timelines.
• ERCOT NPRR 1239 (effective Jan 2026): Creates a new “Large Flexible Load” queue with readiness milestones; non-compliant projects forfeit deposits after 24 months.
• PJM Capacity Market reform (2025/26 auction): Controllable data center load with ≥95% firmness now eligible as capacity resource—creates new revenue stream for battery-backed campuses.

Conclusion

The gap between interconnection approvals and deliverable firm power will remain the binding constraint on Canadian and U.S. hyperscale growth through at least 2029. Operators that can internalize firmness—via co-location, private wire, or large-scale storage—are capturing the majority of near-term capacity.

For a confidential consultation or a complimentary opinion of value of your property please give us a call.

Until next week…

Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.

Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.

Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development

About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.

In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.

Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih