Jackson Walker energy development partner Matthew Penny was featured recently in a Law360 article on the surging data center demand that has initiated a “duel” between developers and power suppliers for limited electrical resources, such as specialized equipment and EPC capacity. This competition has led to severely extended project timelines and significantly higher costs due to supply chain bottlenecks.  

To counter this, developers are turning to creative procurement strategies like sourcing equipment from the “gray market” while prioritizing power interconnection over traditional site logistics. This environment is also prompting a shift in contractual frameworks, with suppliers demanding more favorable terms due to scarce resources.  

“Just having a reservation agreement is very valuable, because it’s so difficult to get on the queue,” said Penny. “For that matter, we have clients that have signed up to purchase equipment, and if their project doesn’t go forward, they’re going to turn around and sell the equipment.” 

Read the full analysis at Law360.