New Brattle Report Finds Community Energy Investments by Data Center Developers in Four Representative Cities Could Unlock More Than 1 GW of Generation Capacity and Lower Energy Costs
Prepared for the Natural Resources Defense Council
A new report prepared by The Brattle Group for the Natural Resources Defense Council (NRDC) finds that investments by large-scale data center developers (“hyperscalers”) in community-based energy programs could reduce generation scarcity and lower household energy bills.
The report, Hyperscaler Support for Community Energy Programs: Options and Impacts for Household Energy Investments, evaluates how distributed energy resources (DERs) – such as weatherization, heat pumps, community solar paired with storage, and residential demand response programs – could help meet rising electricity demand driven in part by rapid data center expansion.
The report analyzed programs across four metropolitan areas – Atlanta, Georgia; Memphis, Tennessee; Kansas City, Missouri; and Columbus, Ohio – and found that coordinated investment in customer-side energy resources an average of about a billion dollars per city could unlock approximately 1.4 GW of summer peak capacity and 1.2 GW of winter peak capacity while reducing household energy burdens and avoiding roughly 1.15 million metric tons of CO₂ emissions annually.
“Our analysis shows that community-based energy investments can provide meaningful resource adequacy benefits while directly supporting households through lower energy bills and improved energy affordability,” said Dr. Peter Fox-Penner, report coauthor and Principal at The Brattle Group. “There is considerable DER potential in these metropolitan areas in the portion of the supply curve not yet accessed by current programs. Accessing these resources would require just over 4.5 billion dollars of community investment by data center developers as well as collaboration with the local utility and other stakeholders.”
Key findings from the report include:
- Participating households could save approximately $50 to $1,175 annually on energy bills, depending on the measure deployed.
- Demand response programs represent one of the lowest-cost and most scalable opportunities due to the broad availability of air conditioning and smart thermostat technologies.
- Community solar plus storage provides the largest combined customer savings and firm capacity benefits, albeit at the highest cost to program fiscal supporters.
- Approximately 35–40% of eligible households across the studied regions are low-income, indicating strong potential to reduce energy burdens in underserved communities with appropriately targeted program design.
- Urban infill and higher-density housing strategies can further reduce energy demand, transportation emissions, and infrastructure costs.
The authors find that hyperscaler-funded programs based on three of the four options examined would exceed the cost of conventional supply-side resources on a gross capacity-cost basis, without accounting for the value of participant bill savings, emissions reductions, avoided infrastructure upgrades, or the faster deployment timelines associated with distributed resources. Because these programs are additive to current DER programs and markets, they may represent useful community investment opportunities for hyperscalers.
The report was authored by Dr. Fox-Penner, Energy Associate Dr. Cristina Crespo Montañés, Energy Specialist Paige Vincent, and former Energy Associate Noah Rauschkolb. The full report can be found below.
