Department Of Energy Solicits Proposals For AI Data Centers And Co-located Power

The U.S. Department of Energy (DOE) is accelerating efforts to transform sections of its federal land portfolio into strategic hubs for artificial intelligence (AI)-enabled data centers and advanced energy infrastructure.

These priorities respond to surging demand for digital and computational power and the critical need for secure, resilient baseload electricity and support President Trump's priorities to maintain and enhance American leadership in AI and energy generation.¹ In pursuit of this national agenda, DOE began by soliciting industry feedback with a spring 2025 Request for Information (RFI for AI Infrastructure) on siting AI infrastructure on DOE-owned or DOE-managed land assets, focusing on improving and accelerating data center construction, energy technologies, and operational partnerships and building out the nation's readiness for and competitive advantage in AI innovation and infrastructure.²

Of the 16 potential federal sites explored in the RFI for AI Infrastructure, Secretary Wright selected four "winning" sites in a July 24th announcement for U.S. companies to build and power AI data centers. Shortly thereafter, DOE moved forward with requests for proposals (RFPs), requests for offers (RFOs), and requests for applications (RFAs) for these four sites.

• On September 9, DOE's Idaho Operations Office issued an RFA seeking applications by November 7, 2025, for projects at Idaho National Laboratory (INL).
• On September 30, DOE's Office of Environmental Management and Office of Science issued an RFP seeking proposals by December 1, 2025, for projects at the Oak Ridge Reservation.
• On September 30, the National Nuclear Security Administration issued an RFP seeking proposals by December 6, 2025, for projects at the Savannah River Site in South Carolina.
• On October 31, 2025, DOE's Office of Environmental Management issued an RFO seeking proposals by January 30, 2026, for projects at the Paducah Gaseous Diffusion Plant (PGDP) in Kentucky.

For each solicitation, DOE has focused on three configurations of project proposals: Integrated Data Center and Energy Projects, Phased Integrated AI Data Center and Energy Projects, and Energy Infrastructure Projects.³ Each solicitation expresses a preference for innovative energy technology, including nuclear and geothermal technologies, for potential generation sources and requires that new sources be incorporated either directly into the project design or indirectly through a partnership between the AI data center operators and new energy generators.

DOE's latest solicitation centers on the site of the PDGP, a legacy facility on a 3,555-acre reservation that was devoted to uranium enrichment from the early 1950s until its closure in 2013.⁴ The RFO identifies approximately 785 acres available for development; the Paducah site itself is capable of supporting up to 3 gigawatts of energy production in the Midcontinent Independent System Operator (MISO) power market, in addition to large-load data centers employing that power. The site boasts abundant water resources, positioning it as a practical host for large-scale, energy-intensive data centers with water cooling systems.

In addition to the Paducah site, three other DOE-managed sites are active targets for major data center projects: the INL site in Idaho underwent a similar RFP process earlier in the fall. Bids for the INL site were due on November 7, with selections expected to be announced by December 19. The RFP offers 44,000 acres prioritized for rapid deployment,⁵ significantly more than the other sites. Like all the selected sites, the INL site has deep ties to the nation's history of nuclear development. Notably, DOE already has performed extensive site characterization and permitting activities for new nuclear reactors at INL for the National Reactor Innovation Center.⁶

The Savannah River site offers a portfolio of developable land tracts totaling over 3,100 acres within a much larger legacy nuclear site. DOE anticipates leasing approximately 250 to 450 acres of the total acreage. Its solicitation seeks to leverage the site's grid access and onsite transmission resources,⁷ established water infrastructure, and long-haul fiber corridors. At the same time, the Savannah River site presents unique regulatory and environmental challenges due to its long and complicated history of nuclear production and environmental remediation, requiring careful coordination with and integration of any future projects into ongoing federal operations.

Among the potential development sites, the Oak Ridge National Laboratory and Reservation, which comprises appropriately 245 acres across two distinct areas, stands out for its proximity to the flagship research institution and skilled workforce, as well as extensive preexisting infrastructure and Tennessee Valley Authority 500kV transmission lines. The solicitation for the Oak Ridge site is well-suited to public-private technology partnerships but introduces complexity due to overlapping scientific missions and important but potentially burdensome safety protocols.

All four sites provide substantial baseload power capabilities and appealing physical layouts and scale to support substantial data center construction, but each features distinct advantages and operational hurdles and a unique and complicated history of nuclear fuel development and usage, along with potential site remediation challenges, requiring careful coordination with and integration of any future projects into ongoing federal operations. For this reason, bidders are encouraged to consider the "as is, where is" nature of the government's proffered lease terms. Project owners will be responsible for building, operating, and decommissioning each infrastructure project and must secure utility interconnection agreements. Proposals will be competitively evaluated for technological readiness, financial viability, and detailed plans to complete regulatory and permitting requirements.

Key Takeaways for Clients

• The speed with which DOE has pushed this initiative forward through the stages of federal procurement during the course of 2025 indicates the degree to which the current administration is leveraging the resources of the federal government, including its vast real estate holdings and opportunities to leverage multiple funding sources,⁸ to prioritize AI buildout and construction of new sources of energy generation. Although DOE has focused on four initial sites, more could follow, and companies seeking to develop large-scale data center projects co-located with generation should consider whether any other federal sites, especially those with built-in interconnection facilities, might be suitable for productive reuse.
• DOE's initial focus on four sites with nuclear history bespeaks a clear desire to revitalize the nation's nuclear energy industry and enlist it in the service of AI buildout. The push to make productive use of decommissioned industrial sites predates the current administration, meaning that even as this initiative reflects the priorities of the current administration, it also advances longer-term, bipartisan policy goals.
• With several previously closed nuclear power plants announcing plans in recent months for renewed operations to serve large data center offtakers,⁹ the need for vast quantities of reliable energy production makes nuclear a great fit for AI companies and other data center operators. Even so, with construction timelines for new nuclear power stretching far beyond near-term data center buildout, smaller modular nuclear reactors with shorter construction horizons may meet with more success in the near term, including as bidders for these sites.
• At the same time, DOE's focus across all four solicitations on geothermal energy reflects a desire to support recent breakthroughs in geothermal technology that make it possible for more widespread buildout. With active support from the current administration that has been absent in its treatment of other renewable technologies, as well as steady, reliable energy flow and a light environmental footprint, geothermal seems uniquely well-suited to the needs of AI companies and data center operators.
• DOE has advanced these procurement processes rapidly, but once projects are awarded, they will still need to negotiate leases with the federal government, which will be complex. It remains to be seen whether the terms and conditions of these leases set forth in each solicitation will prove commercially acceptable to developers. Projects will also need to move through federal permitting, including the National Environmental Policy Act (NEPA), the National Historic Preservation Act, the Comprehensive Environmental Response, Compensation, and Liability Act, and other applicable regulatory requirements. Absent substantial exemptions from federal permitting, which do not appear to be contemplated within the terms of these solicitations, aggressive construction timelines may become challenged, particularly in light of the rescission of the Council on Environmental Quality and DOE's NEPA regulations and the reliance instead only on DOE's new NEPA implementation procedures. With that in mind, the extent of federal fast-tracking remains a critical unanswered question.¹⁰ Even with the government's active support, the fundamentals of large infrastructure project development still apply. That means that issues like electrical interconnection and access to transmission remain the largest potential vulnerabilities for large new generation sources. That makes the Paducah site particularly appealing as a prime location for high-capacity, energy-intensive projects, benefiting from MISO market access and other built-in resources.

Finally, it is worth noting that the federal government's stake in AI buildout is multifaceted. It has an interest in furthering American industry, a national security interest as China and other nations race for AI supremacy, and an interest as a potential client of advanced AI systems. Here, although no DOE procurement of goods or services is included as a component of any of the open solicitations, the close proximity of many of these sites to the ongoing advanced nuclear research operations at various National Laboratories makes the latter potential relationship particularly intriguing.

Footnotes

1. See Executive Order (EO) 14318, Accelerating Federal Permitting of Data Center Infrastructure (July 25, 2025); Executive Order 14179, Removing Barriers to American Leadership in Artificial Intelligence (Jan. 25, 2025); Executive Order 14156, Declaring a National Energy Emergency (Jan. 20, 2025).

2. Request for Information on Artificial Intelligence Infrastructure on DOE Lands, 90 Fed. Reg. 14972 (Apr. 7, 2025) (RFI for AI Infrastructure). DOE's statutory authority for leases and easements of DOE real property is outlined in Section 161g of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2201g) and 40 U.S.C. 1304(b). For a more comprehensive discussion of the original RFI, see our prior publications: Trump Administration Makes Move to Build AI Infrastructure on Federal Lands and Siting and Powering Data Centers on Federal Lands: Opportunities and Challenges.

3. More specifically, in each case, the DOE solicitation states, "The Lease Agreement with the Government is for the purposes of designing, financing, permitting, developing, constructing, installing, owning, maintaining, operating, and decommissioning AI data center and energy generation infrastructure (the "Project") including, but not limited to: data center facilities with specialized Information Technology (IT) equipment; associated cooling facilities; energy supply infrastructure; transmission and storage infrastructure; and other ancillary facilities and equipment reasonably required for the installation, maintenance, operation, decommissioning, and site restoration/remediation of AI data center and energy generation facilities including such conduits, lines, wiring, electrical systems, interconnection facilities, and other ancillary facilities and equipment reasonably required for the installation, maintenance, operation, decommissioning and site restoration of an energy generation facility given the available real property described herein."

4. Leasing at the PGDP site is governed not only by the Atomic Energy Act but also Section 3154 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160; 42 U.S.C. 7256(c) to (f)), also known as the Hall Amendment, which authorizes the DOE to lease unneeded property located at departmental facilities to be closed or reconfigured.

5. The identified tracts include the area already characterized for advanced nuclear reactor deployment for the NuScale Carbon-Free Power Project (CFPP), which NuScale terminated in a letter to the Nuclear Regulatory Commission (NRC) in November 2023.

6. See RFI for AI Infrastructure, 90 Fed. Reg at 14973.

7. The SRS power grid includes four 115kV lines, a 20 MW biomass combined cycle plant, and two commercially owned 75 MW solar power generation facilities with BESS in development that are located on land leased from DOE.

8. DOE has highlighted the opportunities to integrate financing from the Loan Programs Office for projects, including nuclear reactors, enhanced geothermal systems, investments into grid stability and reliability, and development of energy infrastructure to support AI and data center deployment and funding from the Grid Deployment Office (GDO) to "accelerate speed to power for data centers and other large electricity customers." See, e.g., U.S. Department of Energy, Office of Nuclear Energy, Commercial AI & Energy Generation Infrastructure Program at Idaho National Laboratory, Request for Application Number: DE-FOA-0003578 Amendment 07 (11/05/2025). Available GDO programs include the Transmission Facilitation Program, Grid Resilience and Innovation Partnerships Program, AI for Interconnection, and the coordinated Interagency Transmission Authorizations and Permits Program.

9. See, e.g., Google and NextEra to revive major Iowa nuclear facility as AI energy demand surges; The AI boom may give Three Mile Island a new life supplying power to Microsoft's data centers; Elementl Power and Google Sign Strategic Agreement to Develop Locations for Advanced Nuclear Projects.

10. Note that DOE expects the applicant or offeror to "demonstrate an aggressive, yet achievable, timeline to successfully deploy the proposed projects, with the anticipated timeframes for the AI data center including six to 18 months for development, one to two years for construction, and 10 or more years for operations, and the anticipated timeframes for the energy generation infrastructure being in alignment with the commercial best practices for the technology proposed."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.