“Bridge to power” and “bring your own capacity” aren’t just workarounds for data centers stuck in interconnection backlogs. They’re starting to look like a new market — and they’re reshaping distributed energy business models in the process.
Microgrid developers are becoming bridge-to-power providers. Virtual power plant and onsite generation companies are leaning into bring-your-own-capacity. Others are finding new ways to position demand flexibility, financing and bundled services — all to serve speed to power.
Even the language is changing. Several companies have told me they are moving away from the word microgrid in favor of terms like onsite energy. After all, these new, quick-to-build systems often aren’t micro-sized.
It’s not yet clear which models will be money-making. The market is still experimenting. A lot of spaghetti is hitting the wall to capture data center hunger for speed.
A market still finding shape
Three developments from the past week illustrate how varied — and fledgling — this market still is.
The most attention-grabbing came from AI infrastructure and Available Infrastructure — the creation of 1,000 edge data centers, an “urban neocloud” alongside telecom facilities in 100 cities by the end of 2026 at a cost of $5 billion.
Unlike hyperscale campuses that require hundreds of megawatts, these smaller, urban facilities could open the door to more localized, smaller-scale on-site energy systems. On first blush, the model — called Project Qestrel — looks like the perfect match of distributed compute meets distributed energy.
“Smaller sites nestled more closely into more populous load centers would certainly juice the potential for creating capacity from locationally-relevant demand-side management. I’ll leave prognostication about the wisdom of co-locating so much (strategically and monetarily) high-value infrastructure (telecom + data center) together and near urban centers to others, but from a Bring Your Own Distributed Capacity perspective, this is a fascinating opportunity,” said Erin Kempster, director of regulatory policy at Power TakeOff, on LinkedIn.
How much Project Qestrel pursues distributed energy remains to be seen, given that it piggybacks on grid power at telecom sites, which raises new questions.
“It leads me to wonder, are edge data centers and hyperscalers playing by the same market rules. Do they need to make ratepayers whole for the impact they will have on distribution costs? Will they have any specific requirements for capacity? Or do all of these concerns vanish because each individual facility is small even though collectively they are large?” said Dave Mullaney, chief transformation officer at trucurrent, also posting on LinkedIn.
Those questions don’t yet have answers. But they point to a gap that distributed energy can potentially fill because onsite generation avoids ratepayer issues associated with grid-connected power.
Doubly virtual
The second development is conceptually bold.
Virtual Grid, a Canadian company, is developing a virtual data center powered by a virtual power plant.
The company says it has reached a key milestone with a prototype modular compute node and plans to deploy a distributed network of GPU-powered, battery-backed data centers across Western Canada. With 75 sites in development, Virtual Grid envisions its nodes serving not only compute demand but also operating as coordinated grid assets.
Like others in this emerging category, Virtual Grid is selling speed-to-power and speed-to-compute. In other words, stuff gets built quickly because of its modular, distributed approach.
The power of bundling
Vertiv, a digital infrastructure company, leans into the trend by bundling financing and equipment into a “Bring Your Own Power & Cooling” product.
Generate Capital is backing the effort with infrastructure financing, asset ownership and operational expertise.
The Ohio-based Vertiv offers integrated power-and-cooling systems that can be installed as modular building blocks. It plans to target North American markets where grid interconnection is difficult, working with configurations that may include reciprocating engines, turbines, fuel cells, pre-engineered integrated cooling, battery energy storage, and alternative energy systems.
“As AI-driven demand accelerates, customers need more than equipment; they need a deployable infrastructure model,” said David Crane, CEO of Generate. “Our collaboration with Vertiv combines proven power and cooling infrastructure with flexible financing, ownership, and operations to help customers deploy faster, manage capital efficiently, and preserve long-term grid transition options.”
Vertiv late last year announced a deal with Caterpillar and Solar Turbines, also focused on onsite power for data centers in grid-constrained areas, which taps into Solar Turbines’ combined cooling, heat and power expertise.
What’s striking about all three developments is what they don’t emphasize: resilience, savings, carbon reduction. These were once distributed energy’s prime benefits, but in the speed-to-power race, they seem secondary at best.
Data centers: the Superstorm Sandy of this decade
We seem to be experiencing a kind of Superstorm Sandy of this decade.
The 2012 storm, which crushed electrical infrastructure throughout the Northeast, spurred efforts to improve energy reliability and resilience, giving birth to the microgrid industry. Microgrid startups emerged, and large companies like Schneider Electric and Siemens formed microgrid divisions.
Now, data centers are bringing the same storm-like disruption as they try to capture what Goldman Sachs describes as the energy equivalent of another top-10 power-consuming nation coming online.
It’s not yet clear which business models will prevail. But as with all big storms, when the wind settles, things could look very different.
