Jun 25, 2026
Behind-the-meter power: why air quality matters for data centre deployment
As one of the fastest-growing commercial real estate assets in the world1, data centre development is being increasingly constrained by lengthy grid connection wait times, pushing some developers to take power generation into their own hands through on-site, or “behind-the-meter” power.
The scale of this shift is already significant. Research by BloombergNEF has revealed a 114 GW pipeline of on-site gas capacity, over half the size of the US data centre pipeline.2
While this shift can accelerate deployment, it can also bring power infrastructure closer to the communities and environments that surround data centres. This can mean air quality, siting and permitting considerations shift from system to project-level, with the potential to influence where, how, and at what scale developments proceed.
Air quality and the implications for deployment
In moving behind-the-meter, technologies like gas turbines and gas-powered engines are seeing increased use for primary power. Combustion-based technologies generate emissions (Figure 1) that are subject to air quality regulation and can carry implications for permitting that need to be managed within a project’s development. These considerations can become more acute as data centres increase in size. As on-site power infrastructure scales, the emissions profile increases beyond regulatory thresholds, triggering more stringent requirements that can influence how easily projects proceed.
Beyond regulatory considerations, air quality is also a topic that can attract attention from local stakeholders, including residents, community groups and policymakers, particularly in areas where air quality is already under pressure.
A case study of behind-the-meter deployment meeting air quality scrutiny
High-profile examples are beginning to illustrate these broader implications. In 2024, the artificial intelligence company xAI made headlines for deploying mobile gas turbines at its Colossus 1 data centre in Memphis to bypass grid connection delays, bringing the facility online in record speed.3
Local community groups, supported by the Southern Environmental Law Center (SELC), voiced concerns about the impact on air quality in an area already burdened by industrial pollution, arguing the project risked deepening existing inequalities in access to clean air.4 Those concerns were not without foundation. A 2013 study found that air pollution in their locality exceeded other industrial areas across the US, with the associated cancer risk estimated to be four times the national average.5
This attention has also extended beyond local opposition into regulatory scrutiny. xAI initially maintained that mobile turbines were exempt from air quality permitting, but this position was rejected by the Environmental Protection Agency (EPA), asserting that even temporary or portable gas turbines require a federal air quality permit.6
After securing a permit for up to 247 MW across fifteen gas turbines, xAI was challenged by the SELC who alleged regulatory breaches. Aerial imagery suggested total installed capacity may have been higher than the permitted level of 247 MW, and using systems with un-permitted, lower emission control technology.7
The 247 MW threshold is not an incidental number. It reflects the point at which cumulative formaldehyde emissions, classed by the EPA as a Hazardous Air Pollutant (HAP), reach 9.79 tons per year8, just below the 10 tons per year threshold that triggers more stringent federal permitting.9 This brings increased emissions reporting and potential mandating of emissions control technologies. Developers therefore often seek to stay within these limits to avoid the added complexity that can delay or even halt projects.
The xAI example points to a broader deployment challenge: as combustion-based power moves behind the meter, air quality permitting and early stakeholder engagement are increasingly important considerations. While Colossus 1 is an early example of a data centre coming into the spotlight, it is unlikely to be the last. 13 km away, xAI’s Colossus 2 is getting the same attention from the SELC and Earthjustice, a U.S. environmental law nonprofit, who have submitted a notice of intent to sue for more deployments of un-permitted turbines.10
Solid oxide fuel cells: an alternative pathway
There are established behind-the-meter power generation solutions now scaling that offer a compelling alternative to combustion-based technologies. Solid oxide fuel cells (SOFCs) generate power electrochemically, producing near-zero levels of pollutants such as NOx, SOx and particulate matter. For developers operating in or near populated areas, that distinction can have practical implications for deploying behind-the-meter power.
Figure 1: SOFCs emit lower levels of air pollutants: Emission comparison of SOFC vs. gas turbine (with and without NOx mitigation).
With a lower emissions profile, SOFCs have the potential to reduce permitting constraints and community concerns, particularly where local air quality standards are already under pressure. In some regions, this is already reflected in policy. In California, for example, SOFC systems certified by the California Air Resources Board (CARB) can bypass local Air District Permit-to-Operate requirements, removing a layer of approvals and helping accelerate deployment timelines.11
This is already beginning to influence power architecture decisions. For example, Oracle, a global enterprise software and cloud computing company, replaced planned gas turbines with 2.45 GW of fuel cells for its Project Jupiter data centre, citing significant reductions in NOx emissions alongside lower water use and a design explicitly intended to align with local community and air quality priorities.12
What this example highlights is how SOFCs can offer more than a compelling pathway to reliable, on-site power by addressing the broader considerations now shaping deployment. In doing so, they can provide a route to scale behind-the-meter capacity while reducing exposure to the air quality, permitting and stakeholder implications that can constrain deployment.
1 Are data centers being built fast enough?
2 Data Centers Eye 114GW of On-site Gas Amid Grid Delays
3 How Memphis became a battleground over Elon Musk's xAI supercomputer
6 Elon Musk’s xAI datacenter generating extra electricity illegally, regulator rules
7 Inside Memphis’ fight against xAI
8 Copy of permit available on request
10 xAI built an illegal power plant to power its data center
11 Executive Order DG-047 (March 2023) Distributed Generation Certification of HyAxiom, Inc.