The $120B blind spot in U.S. data center expansion
Roughly $120 billion in U.S. data center investment is expected in 2026 alone, spanning hyperscale campuses, dedicated AI facilities, and supporting power infrastructure.
A subset of these projects are confronting a hard reality:
- Renewable power is constrained
- Grid interconnection queues are long
- Reliability requirements are non-negotiable
As a result, gas-backed generation paired with CCUS (Carbon Capture, Utilization, and Storage) is emerging as one of the few scalable paths to firm, NET ZERO-aligned electricity.
That decision, however, introduces a risk most data center developers and operators are underestimating.
NET ZERO via CCUS implicitly creates IRS 45Q tax credit exposure.
The moment a data center relies—directly or indirectly—on a CCUS-enabled power asset, it enters the world of IRS Section 45Q.
That is true whether the operator:
- Owns the capture equipment
- Signs a long-term power purchase agreement (PPA)
- Contracts for “net-zero” electricity from a third party
If CO₂ is being captured and stored to support your NET ZERO claim, someone in the asset chain is depending on 45Q economics. And if 45Q fails, the entire structure is at risk—pricing, availability, and credibility.
Unfortunately, 45Q is not something you can “true up” after commissioning.
Eligibility and value depend on decisions made years earlier, including:
- Capture technology selection
- Metering and monitoring architecture
- Labor decisions that include prevailing wages and apprenticeship
- MRV (Monitoring, Reporting, and Verification) design
- Storage pathway (Class VI, Class II, utilization, etc.)
Most data center projects today are:
- Optimizing for speed to power
- Treating CCUS as an energy attribute
- Assuming tax credit compliance can be handled later
That assumption is incorrect—and dangerous, and the capital at stake is not trivial.
At $85 per metric ton, a single CCUS-backed power asset supporting a large data center can generate hundreds of millions of dollars in 45Q value over the credit lifecycle.
As data center demand scales into multi-gigawatt portfolios, those economics move into the billions.
If 45Q eligibility is lost or constrained due to poor planning:
- Power prices change
- Offtake contracts unravel
- NET ZERO claims weaken under scrutiny
- Capital partners reprice risk
For a sector deploying $120B per year, that is systemic exposure—not edge-case risk.
What data center leaders should be doing now
If CCUS is anywhere on your NET ZERO roadmap, planning must start today, not at commissioning.
That means:
- Treating 45Q as a design constraint, not a tax incentive
- Requiring visibility into capture, transport, and storage data
- Aligning legal, engineering, finance, and sustainability teams early
- Ensuring your partners have a credible 45Q execution track record
Most importantly, it means building a system of record that supports both:
- IRS-grade compliance, and
- Executive-speed decision-making as plans change
Bottom line
The U.S. is about to deploy $120B in data center capital in a single year.
Any data center seeking NET ZERO status via CCUS—and not actively planning for IRS Section 45Q today—is accepting avoidable risk to:
- Cost
- Schedule
- Credibility
- Long-term power availability
This is not a future problem.
It is a pre-construction problem.