How Power Shortages are Impacting Data Center Construction and What You Can Do

Power Shortages Slow Down Data Center Construction

A recent analysis by Savills reveals that the power supply crisis is significantly impacting the construction of data centers across Europe, the Middle East, and Africa (EMEA). In 2025, power capacity delivered in the region fell by 11% compared to the previous year, reaching only 850 MW. Surprisingly, this decline occurred even as the total contracted power capacity surged by 12% annually to nearly 14,500 MW, indicating strong demand despite the supply constraints.

Understanding the Demand-Supply Imbalance

The data center industry is experiencing an intriguing paradox where demand is on the rise while the available supply of power continues to dwindle. In fact, around 845 MW of new power capacity was leased this year, nearly half of what was contracted in 2024. This phenomenon has led to occupancy rates swelling to 91%, an increase from 87% last year, demonstrating the increasing necessity for operational data centers amid supply shortages. According to Cameron Bell, director at Savills, "The persistent imbalance between surging demand and restricted supply continues to underpin rental values."
In more specific terms, the following geographical regions highlighted major growth: France saw an increase of 15%, Germany 10%, and the United Kingdom and Ireland rose by 9%. Unconventionally, locations such as Portugal, Saudi Arabia, and Spain have emerged, showcasing a paradigm shift as companies seek power availability away from oversaturated spaces.

Triumphs Amid Challenges: Growth in Non-Traditional Markets

Interestingly, areas not historically known for data centers are witnessing significant growth. Portugal's power capacity soared by 60%, and Saudi Arabia by 49%, as companies race to establish a foothold in markets where power availability is less constrained. This shift signals a developing trend where operators prefer investing in places with reliable energy and the potential for scalable growth. As Bell states, operators are focusing on existing availability zones rather than geographic agnosticism, which has not translated well into actual projects.

The Rising Cost of Construction

Along with dwindling power availability, soaring construction costs are adding further strain on data center developers. Savills reported that build costs for data centers now range between $7.3 million and $13.3 million per megawatt of commissioned IT load. Notable annual cost surges occurred in Vienna (28%), Warsaw (25%), Stockholm (18%), and Copenhagen (17%). Responding to these challenges, some developers are forging closer ties with suppliers and considering emerging markets that offer better access to land and energy resources.

The Urgent Need for Power Infrastructure

The urgent need for enhanced power infrastructure cannot be overstated, given projections indicating that data centers' electricity requirements could surge by as much as 160% by 2030. This demand is primarily driven by the increasing dependency on artificial intelligence, which is rapidly becoming embedded in various sectors. Data from Gartner reveals that 40% of data centers are at risk of power shortages by 2027, outlining the future risks associated with a fragile power infrastructure.

What the Future Holds for the Data Center Landscape

The construction climate surrounding data centers remains tenuous as firms adapt to both increasing demands and rising costs. Power availability has become the number one factor driving strategic relocations and openings, with developers seeking geographic areas that can support their energy ambitions. As this situation unfolds, companies now face a race against time to secure power sources or pivot strategies altogether. Data centers must adapt to these logistics to maintain competitiveness and efficiency.

Actionable Insights for Business Leaders

For CEOs and marketing managers entrenched in tech-driven industries, understanding the implications of power availability is imperative for strategic planning. Organizations are encouraged to forecast their power needs well in advance and consider potential location changes to secure vital resources. By actively engaging suppliers, businesses can avoid disruptions and capitalize on evolving market conditions.

Conclusion: Time for Strategic Movement

In the increasingly dynamic data center landscape, positioning your organization for the future means planning ahead. As technology evolves and demand escalates, navigating through the challenges posed by power shortages will become paramount for maintaining efficient operations. Start devising strategies today to safeguard your business against impending power availability issues.