Linear generator maker Mainspring Energy is navigating a rush of data center demand by weeding out speculative projects and ensuring developers have a plan to win local support.
The company, a Stanford spinout whose tech is designed to replace diesel generators for backup power, is reportedly eyeing an IPO after lining up a $1 billion data center pipeline. After positioning itself as a solution for the capacity and transmission bottlenecks facing data center developers, it brought its first full-scale deployment with a greenfield data center online last summer.
Mainspring declined to comment on reporting by Axios that it has tapped Goldman Sachs to evaluate a potential IPO. But in an interview with Latitude Media before the news broke, co-founder and chief commercial officer Adam Simpson acknowledged the AI boom is pulling Mainspring’s growth timeline forward.
In the coming months the company plans to announce a partnership with a “large private equity firm” to provide financing for projects for data centers and municipalities. It will also announce its first 100 megawatt-plus data center project, Simpson said.
Today Mainspring has about half a dozen data center projects in active development. A string of announcements of projects in that pipeline have created a “snowball effect” heading into the summer, he added.
Mainspring’s evolution into a speed-to-power partner for data centers has been rapid. Just two years ago, commercial and industrial customers made up the bulk of the company’s pipeline. Mainspring was originally pitching its generators as a clean alternative to diesel for data center backup power. At the time, emissions reduction was central to Mainspring’s value-add: “local power generation for the zero-carbon future.” Now though, it’s largely selling its generators as a flexible, quick-to-deploy supplement to primary power.
The AI effect
Most of Mainspring’s current data center customers are “established developers that have been selling to the hyperscalers for decades,” Simpson said. He pointed to Rowan Digital Infrastructure, Vantage Data Centers, and EdgeConneX. Importantly, those customers bring their own private equity backing and have the credit needed to build “a $10 billion facility,” he added.
While there are a handful of “first-time developers” in the pipeline, Mainspring has become increasingly selective in project partners, as companies of all stripes have pivoted into data center development in the last year. That means making sure new leads can check four key boxes: financing, land, gas, and offtake, Simpson explained.
Community engagement plans, however, are a close fifth, and rising in importance.
“It’s a way to weed out what we call ‘two guys in a truck,’ where they have an option on land, they don’t know about gas, they’ve never sold to a data center,” he added. Those types of prospective customers often can’t secure hyperscaler offtake, and therefore aren’t always a great use of Mainspring’s resources. “Once we know it’s a real opportunity, we have a conversation with them about their community outreach plan — how well do they know the city council, do they have local representation, all that stuff.”
Mainspring’s own policy team keeps close tabs on the strategies that are and aren’t working on the community engagement front, and helps shepherd their customers through the process of pitching themselves to communities.
That policy support, he added, has become one of Mainspring’s top value-adds at a time when onsite power solutions of all kinds are trying to sell to data centers. Mainspring is part of an emerging category of onsite power that runs on natural gas but relies on engines and other non-turbine hardware rather than traditional combustion turbines. That category also includes companies like Wärtsilä and Jenbacher, which market modular gas engine plants as flexible turbine alternatives.
Mainspring’s generator replaces the rotating components of traditional combustion engines with a bar of magnets and coils of copper wire. It compresses air and a user’s fuel of choice (primarily natural gas right now, but potentially options like biogas or hydrogen in the future), until a low-temperature, flameless reaction pushes the magnets through the coils to generate power. This setup allows the generator to ramp up and down like an engine, but with much cleaner exhaust.
Beyond hyperscalers
The AI-induced increase in demand for Mainspring’s units isn’t just from direct data center demand, Simpson said. The company is also experiencing growth in verticals like public power utilities, and industrial energy users.
Munis and co-ops, Simpson explained, pride themselves on having lower retail rates than investor-owned utilities, partly because they avoided overbuilding. Now though, they’re realizing they don’t have enough guaranteed capacity, and are scrambling to add in-network, regulator-approved power. Mainspring’s generators are a good solution, he added, in part because short-duration batteries often don’t count as firm capacity for planning purposes.
Mainspring’s industrial pipeline growt is more of a “trickle down effect” of the AI boom, Simpson said, pointing to facilities that “used to be filled with humans…and are now automated with robots.” Warehouses looking to automate work are finding themselves in the same position as data centers, albeit on a smaller scale. “We’re seeing a lot of traction with people that can’t get power, and they need to get power to grow their business…so the data centers are causing this ripple effect, and that’s a great tailwind to have for us.”
At the moment, Mainspring isn’t constrained by manufacturing capacity, Simpson said. The Series F the company raised last summer was in part to help build a $175 million manufacturing facility in Pittsburgh. That facility would scale to eventually produce 1,000 generators annually. But the timeline for the buildout depends in large part on the fate of an $87 million grant Mainspring won from the Department of Energy during the Biden administration.
When the second Trump administration took office, it moved to freeze all Inflation Reduction Act funding, throwing the agency into chaos. Mainspring began evaluating potential alternatives, in case its funding was delayed or canceled. That included upping the efficiency and capacity of its existing manufacturing and assembly processes. It could also include pursuing a slower ramp up at the Pittsburgh facility, along the lines of a “pay as you go” approach, co-founder Shannon Miller told Latitude last year.
Mainspring’s grant “made it through” the multiple rounds of project cancelations, Simpson said. But while the company is “confident” the partnership will eventually pan out, it isn’t betting on the funds materializing any time soon. “We’re likely to utilize that grant and bring some manufacturing in-house to verticalize and control costs and our ability to scale more directly, but it’s probably two years out before any of that materializes.”
Ultimately, he said, “we can only move as fast as the DOE is willing to move.”
