The Real Constraints Shaping Data Center Growth: Energy, Water & Infrastructure Built for the Past
There’s no doubt the data center boom continues to thrive, with a >$1T project pipeline1 and hundreds of live projects across the US and Europe. But the landscape is changing shape – literally and figuratively. Where these projects are built, whether we have the power and water to sustain them and whether they are properly resourced with resilient ancillary infrastructure have become the key factors that decide what gets delivered.
Data Centers are emerging in more remote locations
Several constraints are reshaping how and where data centers are emerging. Instead of clustering in established hubs, development is spreading outward into new counties and corridors where land is available, power and water can be secured and approvals are more straightforward.
Across the U.S., approximately 67% of planned data centers are now in rural areas, compared to 87% of existing sites in urban locations2. And it’s not just a U.S story. Across the world, this pattern repeats itself, with site selection now diversifying into less dense geographies.
This level of saturation can mean longer waits for grid connections, more complex permitting, and growing local resistance from communities that are less familiar with this kind of infrastructure – all of which can slow project timelines and increase costs. But it can also create opportunity. When investment spreads into new regions, it can support local economies – provided its ancillary infrastructure keeps pace!
If there’s no power, there’s no project
The most recurring constraint is power. Data center power demand could approach 100GW of energy by 2030, which is the equivalent of tens of millions of US homes. This reality and a power grid that’s already under pressure means projects are moving where there’s a clear and credible path to power – whether through grid capacity, new generation, or utilities that are ready to support large users. Data Centers that are co-located with their own energy source and place little burden on the grid are undoubtedly the ones that will meet fewer obstacles.
If it can’t cool, it can’t run
Water is also emerging as a key concern, particularly in areas where resources are already under pressure. In fact, 2/3 of new data centers built or in development since 2022 are in places already gripped by high levels of water stress3. Projects that move forward tend to address these concerns early, with clear plans for efficiency, recycling, or alternative cooling methods, and by explaining impacts to nearby communities in practical, measurable terms. A project might be technically viable, but without that clarity and community confidence, it can quickly become difficult to deliver.
Development is moving into places where infrastructure was built for the past
As projects move into smaller towns and rural areas, a clear gap is emerging. Although the land may be available, the surrounding infrastructure – roads, utilities and stormwater systems, are often outdated and under resourced. They haven’t been designed for large volumes of traffic or long-term resiliency. And when development arrives without those important upgrades, the reaction is predictable – more scrutiny, slower approvals, and growing concern about whether the land is truly ready to support it.
The projects that move forward most smoothly tend to take a different approach – enabling ancillary infrastructure alongside the data center campus, because data centers can bring real investment – but only when they arrive with clear plans, and infrastructure that works for everyone.
The new leadership standard: reducing uncertainty
But what separates good partners from great partners isn’t just the ability to deliver power, water and supporting infrastructure – it’s how they bring them together. Because at this scale, success isn’t defined by components, it’s defined by certainty. Certainty that power will be there when it’s needed. That water can be sourced and managed responsibly. That the surrounding infrastructure can support not just the data center construction, but its long-term operation.
The fastest projects will often be the ones that were planned well before construction of the campus commences – so that the project fits the grid, fits the landscape and fits the community around them.
Sources
1Global Data. Data Center Construction Projects insights and analytics Q4 2025
2Pew Research Center (April 2026)
3Bloomberg: How AI Demand Is Draining Local Water Supplies