KEY POINTS
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The U.S. Department of Energy announced a partnership to redevelop portions of its Paducah Site into a data center campus supported by new generation, storage and transmission infrastructure.
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The more than $100 billion privately funded investment is expected to create approximately 8,000 construction jobs and 600 permanent jobs in western Kentucky.
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NextEra Energy plans 2 gigawatts of natural gas-fired generation and up to 2.6 gigawatts of battery storage to support a 1.8-gigawatt artificial intelligence and high-performance computing campus targeted for completion in 2031.
Project to Redevelop Portions of the DOE’s Paducah Site into a Data Center Campus
The U.S. Department of Energy announced a partnership with Brookfield, NextEra Energy, Big Rivers Electric Power Corp., Jackson Purchase Energy Cooperative and Paducah Power System to redevelop portions of the DOE’s Paducah Site into a data center campus supported by new energy infrastructure.
The more than $100 billion privately funded investment is expected to create approximately 8,000 construction jobs and 600 permanent jobs, according to the DOE announcement dated July 29. Construction is expected to be completed in 2031.
The project would combine a 1.8-gigawatt artificial intelligence and high-performance computing campus with new natural gas generation, battery storage and transmission upgrades.
Paducah Campus Pairs AI Load With New Power
NextEra Energy plans to develop 2 gigawatts of new grid-connected natural gas-fired generation, upgrade transmission infrastructure and deploy up to 2.6 gigawatts of battery storage at or near the campus.
DOE said the generation and storage capacity would exceed the data center’s needs. Excess electricity could be delivered to the regional grid under the administration’s Ratepayer Protection Pledge, potentially expanding regional supply.
Large computing campuses require power generation, transmission, substations, communications infrastructure, water and land in addition to the data center building.
ConstructConnect’s August 2026 Data Center Report showed the scale of that market:
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Data center spending reached $22.3 billion in June, the second-highest monthly total on record.
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Year-to-date spending through June reached $81.5 billion.
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Power infrastructure starts were up 4% year to date, as power availability increasingly shapes where data centers can be built.
The August Data Center Report was prepared by ConstructConnect economists Michael Guckes and Devin Bell.
The U.S. Department of Energy announced a partnership to redevelop portions of the DOE’s Paducah Site into a data center campus supported by new energy infrastructure. Image: US Department of Energy
Former Nuclear Site Supports Redevelopment
The project site is where the Paducah Gaseous Diffusion Plant was constructed in 1952 to produce enriched uranium, first for the nation’s nuclear weapons program, and later for commercial nuclear power plants, according to the DOE.
DOE owns the plant and oversees environmental cleanup, including remediation, waste management, depleted uranium conversion, and decontamination and decommissioning. Commercial enrichment continued under lease from 1993 until operations ceased in 2013, when the facilities returned to DOE’s Environmental Management program.
The site also offers assets sought by data center developers, including existing transmission capacity, water infrastructure, fiber connectivity and available land. The project builds on DOE’s partnership model at the Portsmouth Site, part of the department’s American Energy Hubs initiative for redeveloping former federal sites.
The potential nonresidential construction work on a project of this scope extends beyond the data center shell to heavy civil, electrical, utility, energy, battery storage, transmission and mission-critical construction. Final procurement and construction packages have not been announced.
But the project has some hurdles to clear first.
Data Center Construction Faces Community Pressure
ConstructConnect’s economic reports have emphasized that data center growth depends on labor, materials, energy, land and water. ConstructConnect Associate Economist Devin Bell suggested that public opinion is another constraint.
Bell said, "Public pushback is becoming a real factor in where data centers are being built, in a similar manner to power and water availability. We've already seen this culminate in states like Texas and New York conducting audits or enacting moratoriums on data center construction, along with recent federal legislation."
Recently introduced legislation, Bell added as an example include "The 'No AI Data Centers on Federal Lands Act' would ban the use of federal land for data center construction, which would stop the Paducah project in its tracks. Though the bill has little chance of becoming law according to GovTrack.us, it highlights the rising importance of public opinion in data center site selection."
Partnership Still Requires Regulatory Approval
DOE selected Brookfield to develop and operate the Paducah data center campus after issuing a request for offers in November 2025. NextEra Energy was selected to build and own the dedicated energy infrastructure. Big Rivers Electric is expected to provide wholesale service, Jackson Purchase Energy Cooperative retail service and Paducah Power System community support.
The power service agreement remains subject to approval by the Kentucky Public Service Commission. That approval is a key step before the partnership can move into the engineering, permitting, procurement and construction work required for a campus of this scale, according to the DOE request for offers.
If the project advances as planned, Paducah will join a growing group of AI developments combining computing facilities with power generation and grid infrastructure.
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