The European data centre sector is entering a period of unprecedented expansion, with operators expecting to commission an average of 67MW of capacity in 2026.
This represents a 42% increase from 2025 and a 319% rise since 2023, according to a report by Rider Levett Bucknall (RLB).
While the industry briefly paused in early 2025 as hyperscale providers recalibrated designs to accommodate liquid cooling requirements, demand has returned at full speed. Artificial intelligence (AI) remains the primary catalyst, cited by 45% of operators as the leading driver of demand.
This pressure is further underscored by OpenAI’s global commitment to develop 30GW of capacity—a figure that exceeds Europe’s current combined footprint.
Sam Baker, Vice President at Lockton Companies, said: “With AI, you've got higher economic value per megawatt – more tax, more jobs, more demand for technically skilled people. All that helps with planning and political support, which can improve the likelihood of approval compared with traditional workloads.”
However, the path to expansion is fraught with structural hurdles. Limited or delayed access to power is the top-ranked barrier, affecting 34% of respondents. This is closely followed by permitting delays at 33% and constrained grid access at 29%.
Bruce Stephenson, Chief Development Officer at hscale, said: “Local authorities may stipulate five, six or seven months to determine a permit. In reality, that becomes nine to 12. On top of that, environmental permitting, handled by a standalone authority, takes at least 12 months, and often up to 18.”
In response to grid limitations, 69% of operators are turning toward alternative energy sources, including private power purchase agreements (PPAs), on-site solar, and battery storage.
Furthermore, 63% expect to co-locate data centres with other advanced facilities, such as semiconductor fabs or energy storage sites, to bypass traditional infrastructure bottlenecks.
The report also highlights a tightening supply chain and rising costs. Prices for battery energy storage systems (BESS) are expected to rise by 4.3% in 2026, while copper cable costs are projected to climb by 4%. These increases are being driven by a combination of general inflation and the specific surge in demand for high-end compute capacity.
David Byrne, Chief Revenue Officer at Mercury Engineering, said: “We're seeing capacity constraints again. Generator and equipment lead times that went down from 52 weeks to 38 [in 2025] are quickly going back up to 52 weeks, and maybe more.”
Compounding these issues is a critical shortage of skilled labour throughout the development lifecycle. The most acute deficits are found in design and engineering, where 48% of respondents report difficulty in accessing talent, followed by construction at 39% and commissioning at 32%.
Ben Pritchard, CEO of AVK, said: “The winners will be the developers who manage the supply chain effectively.”
To mitigate these risks, 42% of operators have already entered into risk-sharing partnerships with occupants.
