In 2025, the global data center industry is hitting a hard limit. Artificial intelligence workloads are pushing rack densities to 40–80+ kW in AI clusters (while industry averages still sit near 12–17 kW), but the bottleneck is no longer land or fibre—it is power. From Europe’s core hubs to North America’s largest grids and new markets in Asia and the Middle East, the decisive factor in site selection is now the availability of megawatts and the date they can be delivered.
Power becomes the master variable
Demand for capacity is rising sharply. The International Energy Agency expects global data center electricity consumption to more than double by 2030, approaching 945 TWh. In the meantime, developers are running into grid queues that stretch for years, and into equipment shortages that delay projects even when permits are ready. Large power transformers often take two to four years to arrive, and high-voltage switchgear or cables can require similar timelines.
Industry analysts note that providers are struggling to add supply fast enough to match AI-driven demand, and that every serious project now begins with the grid.
The economics of compute
Building costs have escalated. In Europe, shell-and-core projects now average €7.5–10 million per MW, while fully built colocation facilities in constrained metros are closer to ~€12 million per MW. Operating costs are equally steep: colocation leases range from €180–260 per kW per month, with London in the €180–215 band and Singapore often exceeding €300.
Power contracts are central to the model. Long-term renewable PPAs in Europe are typically pricing around €50–60 per MWh, giving operators a way to hedge energy costs over 10–15 years. But those numbers are meaningful only if the grid connection date is credible and the equipment is secured.
| Line item | 2025 benchmark | Why it matters |
|---|---|---|
| Shell & core build (Europe) | ≈€7.5–10.0m per MW | Baseline capex |
| Fully built colocation | ≈€12m per MW | Constrained metros |
| Clean power PPAs | ≈€50–60/MWh | Locks cost of compute |
| Colocation lease | ≈€180–260/kW/mo | Opex benchmark |
| Transformers & HV gear | 24–48 months | Critical path |
Europe: saturated hubs, shifting perimeters
Frankfurt, London, Amsterdam, Paris, and Dublin remain the continent’s demand centres. But all five face grid saturation. Britain’s regulator Ofgem has reformed its queue under First Ready, First Connected (FRFC), rewarding projects with permits and equipment orders already in place; industry expectations are that the first benefits begin to show in 2025–2026.
In Dublin, new connections are largely paused until 2028 to protect grid stability, while some operators are adopting heat-reuse schemes, such as AWS in Tallaght, which pipes surplus heat into a district heating system. Germany’s Energy Efficiency Act brings heat-reuse obligations for new projects, and Dutch authorities only permit hyperscale campuses in designated zones. Growth is shifting to secondary markets such as Milan, Warsaw, and Berlin, or to transmission-adjacent perimeters with earlier energisation windows.
Nordics: megawatts plus municipal value
Finland, Sweden, and Norway combine abundant low-carbon power with robust transmission operators and cold climates. They are also setting a template for how to win political support. Microsoft’s partnership with Fortum in Finland will recycle waste heat from new campuses into district heating systems, strengthening social licence and accelerating approvals. In effect, heat-reuse is becoming a de-facto permitting accelerator across the region. This model transforms megawatts from a burden into a resource.
North America: building rules for very large loads
In the United States, PJM—the largest grid—has updated its approach to large load additions and is encouraging flexibility (demand response, on-site storage, fast-start generation) so that big, ramp-capable data centers can be assessed and queued more efficiently. Developers are also reserving transformer factory slots years ahead of construction. Some operators even stockpile spares, a tactic unheard of a decade ago.
The core issue is grid stability. AI data centers can increase consumption tenfold in seconds. Utilities are demanding that future campuses arrive with batteries, fast-start generation, or demand-response strategies built in.
Asia Pacific: managed megawatts
Singapore ended its moratorium but kept strict control. In 2024, the government launched the Green Data Centre Roadmap, releasing at least 300 MW of new capacity and flagging another ~200 MW for projects that meet strict green-power and efficiency rules. With colocation prices exceeding €300 per kW per month, the city remains one of the most expensive markets worldwide.
Elsewhere, Australia and Japan use their cable networks and renewables to compete, while Vietnam and Malaysia present themselves as cost-effective AI training hubs where latency matters less than cheap, clean megawatts.
Middle East and Africa: power as a differentiator
New projects in Saudi Arabia, Morocco, and Kenya are being built directly around energy abundance. In Saudi Arabia, NEOM and DataVolt have announced a $5 billion AI campus targeting 1.5 GW of renewable-powered capacity by 2028, with a first phase of 300 MW.
In Morocco, the government confirmed plans for a 500 MW data centre cluster in Dakhla, focused on sovereign cloud demand and backed by solar and wind.
In Kenya, Microsoft and G42 have outlined a $1 billion programme that includes a cloud data centre powered by geothermal energy from Olkaria.
In all cases, the pitch is the same: distance can be bridged by fibre, but megawatts cannot.
The investor checklist
- Energisation date: proven schedules from grid operators outweigh any land pitch.
- Power cost: PPAs around €50–60/MWh define long-term compute economics.
- Load behaviour: heat-reuse, on-site storage, and operational flexibility shorten approvals and strengthen social licence.
Bottom line: time to megawatt
The global data center rush is no longer a hunt for land near cities or fibre routes. It is a hunt for power. From Europe’s FLAP-D hubs to North America’s interconnection reforms, from Singapore’s managed allocations to Saudi Arabia’s renewable megaprojects, the metric that now decides winners is time to megawatt.
The benchmarks are set: €8–12 million per MW to build depending on specification, €50–60 per MWh for clean power, and multi-year waits for heavy equipment. In the AI era, everything else—land, fibre, even latency—comes second. The race is no longer for plots. It is for megawatts.
