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Data Center Power Demand to Grow 24% Annually by 2030: McKinsey

Credited to Data Center Knowledge · datacenterknowledge.com · 9h ago

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Power constraints are pushing operators toward on-site generation, but uncertainty beyond 2030 raises questions about how much infrastructure to build.

Data center electricity demand could grow at a compound annual rate of 24% through 2030, but the availability of power infrastructure will determine how much computing capacity developers can bring online, according to McKinsey’s Global Energy Perspective 2026.

The projection places data centers among the most consequential sources of new electricity demand while highlighting uncertainty over how that demand will evolve beyond the decade.

For developers, the immediate challenge is securing sufficient power to meet computing requirements. Longer-term investment decisions must also account for improvements in AI efficiency and the possibility that demand develops differently than anticipated.

“From now to 2030, our most likely scenarios all have power supply lower than IT compute demand,” Sam DeFabrizio, a partner at McKinsey, told Data Center Knowledge.

Power Supply Sets the Pace

McKinsey’s projections combine monthly tracking of CPU and GPU purchase commitments and hyperscaler capital spending announcements with assessments of how quickly power infrastructure can be delivered.

On the supply side, the model considers interconnection approvals, permitting, moratoriums, transformer lead times, and the availability of turbines, reciprocating engines, and fuel cells. Engineering, procurement, and construction capacity is another limiting factor.

Faster expansion would require improvements across those constraints, rather than a stronger demand for computing alone. DeFabrizio said greater construction and turbine manufacturing capacity, alongside faster interconnection approvals and permitting, could allow power supply to grow more quickly than expected.

Conversely, limited construction capacity or stronger-than-expected efficiency gains could pull electricity demand below the baseline. Those gains could come from AI models, data center buildings, or greater flexibility in when computing workloads consume power.

The report’s broader conclusion is that inexpensive generation cannot support electrification unless transmission, storage, and reliable capacity are ready to deliver it.

On-Site Generation Adds Speed and New Bottlenecks

Developers seeking faster access to power are turning to gas engines and turbines, fuel cells, and battery storage. Those options can reduce dependence on utility construction schedules, but they introduce infrastructure requirements of their own.

“Natural gas is often viewed as the fastest path to adding firm power capacity and generation, but competition for pipeline infrastructure could cause delays in building gas-powered generation,” DeFabrizio said.

That applies to both generation supplying the grid and facilities operating behind the meter. Projects requiring redundant pipeline connections to meet reliability requirements face additional complexity.

Locating closer to gas-producing basins can reduce the need for new pipeline infrastructure, DeFabrizio said. Securing rights-of-way for pipeline construction can otherwise be difficult within the short development schedules that operators are targeting.

Battery storage offers another way to manage electricity costs and improve flexibility. However, DeFabrizio cautioned that storage introduces reliability trade-offs when not paired with generation.

Grid Connections Still Matter

On-site power does not necessarily mean a permanent departure from the grid. DeFabrizio said more than 60% of operators now view their strategy as combining on-site generation with grid access.

“Eventually, many data centers that build on-site generation will retain it post-grid connection, becoming flexible grid assets,” he said.

Under that approach, generation initially installed to power a facility could later provide backup and occasional support once utility service becomes available. Running those assets less frequently could reduce local emissions while preserving reliability.

DeFabrizio said he also expects a more diverse supply mix beyond 2030. Growing demand and additional grid connections could support expanded solar and wind development, sometimes paired with batteries or other storage technologies.

Integrating data center loads into the wider system, he argued, provides opportunities to spread the benefits of investment beyond individual campuses.

Planning Beyond the Current Boom

For data center developers and utilities, an approach considering multiple energy futures will become particularly important after 2030, when the demand pipeline is less certain.

DeFabrizio suggested developers align capital deployment with indicators of market evolution, negotiate contractual protections with creditworthy customers, and maintain a portfolio of power solutions that can support the grid.

He noted community engagement also belongs in that planning process, emphasizing the need to ensure local benefits outweigh potential burdens, alongside managing construction, contractual, and demand risks.

From DeFabrizio’s perspective, it will be critical for developers to secure scarce power quickly enough to meet near-term computing demand while retaining options if efficiency improvements or changes in AI adoption alter the longer-term outlook.

“The leaders across the value chain will likely be those who combine early access to scarce power resources with thoughtful risk management,” he said.

About the Author

Nathan Eddy covers data center trends and technologies across multiple industries. A graduate of Northwestern University’s Medill School of Journalism, he is also a documentary filmmaker specializing in architecture and urban planning. He currently lives in Berlin, Germany.

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EMEA Data Center Expansion Faces a Delivery Test

Credited to Data Center Knowledge · datacenterknowledge.com9h ago

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Power limits are pushing development beyond FLAP-D, but grid access, construction capacity, and community support will decide which projects get delivered.

Power constraints are pushing data center development beyond Europe’s established hubs, but emerging markets now face the challenge of turning ambitious project announcements into operating facilities. Grid connections, construction capacity, and community support will determine how much of the next wave gets built.

These were among the key takeaways from DC Byte’s latest EMEA analysis, which tracks 93 GW of IT capacity across operating facilities, construction, committed projects, and early-stage developments. Nearly a quarter of that total sits in Frankfurt, London, Amsterdam, Paris, and Dublin – the FLAP-D markets – although land and power constraints are encouraging expansion elsewhere.

The figures describe a development landscape rather than available supply. Oscar Gomez Comellas, research manager for EMEA at DC Byte, said roughly 60% of the region’s pipeline remains at an early stage.

Related: Grid Constraints Steer Dutch Data Centers Beyond Amsterdam

“There are a number of things that need to take place before we consider it ‘realistic’,” he told Data Center Knowledge, noting that power availability is the principal obstacle to delivery.

Beyond FLAP-D: Nordics Lead; Milan and Madrid Catch Up

The Nordics are currently bringing capacity online fastest because development began earlier than in markets such as Milan and Madrid, Gomez Comellas said. He added that this lead could narrow over the next 12 months as projects in Milan and Madrid become ready for service.

Michael Winterson, secretary general of the European Data Centre Association (EUDCA), said he expects Europe’s roster of markets with more than 1 GW installed to expand from five to between 12 and 14.

“This is due to … increasing national demand married with lower risks of new deployments,” Winterson told Data Center Knowledge. “This is further driven by energy issues and other planning issues, driving development to markets with capacity.”

Nevertheless, the established hubs retain advantages in connectivity and customer demand. New markets must demonstrate that their infrastructure can support successive projects, not just an initial campus.

Winterson said EUDCA forecasts roughly 15% compound annual growth over seven years, taking deployed commercial capacity above 30 GW. Supply chain limitations and shortages of skilled design and construction workers constrain an industry seeking growth above 20%. That European commercial-capacity forecast is distinct from DC Byte’s broader EMEA tally, which includes projects at multiple development stages.

AI Rewrites Site Selection

AI training is giving developers greater freedom to choose sites based on the availability of electricity.

Related: Power Bottlenecks Push Data Centers Beyond Traditional Hubs

“The majority of AI projects we see today are driven by AI training workloads, which require large amounts of power and don’t necessarily need to be near population centers or connectivity hubs, freeing developers and operators to be more flexible with location,” Gomez Comellas said.

That flexibility could diminish as demand shifts toward inference, where models deliver responses to users. Gomez Comellas said he expects inference to become the main growth driver in the medium term, increasing demand near population centers and well-connected metropolitan markets.

Operators, therefore, need to consider how a location’s appeal might change as customers’ workloads change. A power-rich site suited to training may offer a different proposition for services sensitive to latency.

Grid Access and Local Opposition Make or Break Projects

National grids are adding generation and transmission capacity, Gomez Comellas said, but whether those additions can keep pace remains uncertain.

“The question is whether this increase, along with the already existing capacity in the new hubs, will be enough to satisfy accelerating demand,” he explained.

Electricity is only part of the development challenge. Gomez Comellas identified expanding regulation and local opposition as factors that can undermine announced projects.

Related: UAE Data Centers: Powering the Middle East’s AI and Cloud Revolution

“There is increasing awareness of data center projects among local communities, which can come with pushback, sometimes resulting in projects being abandoned,” he said.

Winterson pointed to the Climate Neutral Data Centre Pact and the EU Energy Efficiency Directive’s reporting and labeling framework as benchmarks for environmental performance. He said the industry’s commitments increasingly extend beyond facility efficiency.

“On top of water and energy efficiency, we are now measuring and targeting net new renewables, grid support, heat reuse, and biodiversity initiatives,” Winterson said.

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