Energy & compute

Setup

Silicon allocation secured, land secured, permits in motion, and an interconnect queue position that put firm grid power roughly three years out. Every part of the project was ready except the only input that could not be bought forward.

What happened

The developer bridged the gap with behind-the-meter gas generation at a substantial premium to eventual grid pricing, plus the capex of the plant itself. That premium — not the hardware, not the site, not the tenant — determined the project's return, and it was the line the original model treated as a rounding error.

Where it stands

The comparable project a hundred miles away, without on-site generation, is still in the queue. Its anchor tenant has renegotiated once already and holds an exit if energisation slips again. The developer with the bridge is earning less than it hoped and considerably more than nothing.

Interconnect queue at underwriting

~3 years

Return driver

bridge power premium

Comparable project without bridge

1 renegotiation

The scarce asset is a site with firm power on a timeline that matters, not the chips. Underwrite the bridge cost explicitly, because that is where the return actually lives.

Setup

Infrastructure debt amortised across two decades, secured against a five-year take-or-pay contract with a single, highly rated counterparty. The credit story rested on the tenant's balance sheet; the residual value story rested on the assumption that demand for that capacity would still exist in year six.

What happened

Demand held, so nobody asked the harder question. Then the tenant's own efficiency work — quantisation, better scheduling, a hardware refresh — reduced draw against a contract it was still paying in full. Contracted capacity began drifting above utilised capacity, quietly, while every headline number stayed intact.

Where it stands

We track the gap between contracted and utilised capacity at the largest buyers as the earliest visible sign of stranded cost. It moves months before renewal terms do, and it is visible in interconnection and metering data before it appears in anyone's disclosure.

Debt tenor vs contract

20 yrs vs 5 yrs

Counterparties

1

Leading indicator

contracted − utilised

A twenty-year amortisation against a five-year tenant is a credit question wearing a technology costume. Ask who owns years six to twenty, and what that capacity is worth without this tenant.