Power availability is increasingly becoming the deciding factor in global data center development, steering projects away from established markets and into secondary locations. A new report from DCByte outlines how power constraints and regulatory challenges are reshaping the site selection process for data centers.
The report assesses global markets based on three criteria: demand, delivery, and depth, where demand constitutes 40% of the score, delivery 35%, and depth 25%. Ashburn, Virginia, remains the top data center market in the Americas, followed by Johor, Malaysia, which has rapidly grown to lead in the Asia-Pacific region. Meanwhile, London still holds the top spot in Europe, the Middle East, and Africa.
According to Alexandra Desseyn, Americas research manager at DCByte, “Power availability has become the primary factor determining both where data centers are built and whether announced projects proceed on schedule.”
Challenges in Major Markets
While major data center hubs continue to have competitive advantages, such as connectivity and established ecosystems, they also face significant challenges. Issues like grid queues, land scarcity, and stringent regulations are impeding the conversion of demand into live operational capacity. For instance, even though Ashburn boasts 5.6 GW of current capacity and has another 15 GW on the way, obtaining grid connections can take five to seven years. Development is already spilling over into surrounding counties like Prince William, Culpeper, and Spotsylvania.
This trend is mirrored in other global hubs. In Tokyo, for example, the timeline for securing a power connection can stretch up to a decade, while Dublin and Amsterdam are facing constraints that hinder their capacity to meet strong demand due to regulatory and community pushback.
Emergence of Secondary Markets
DCByte’s future growth rankings highlight emerging markets that offer more favorable development conditions. The Americas are seeing increased interest in cities like Pittsburgh, Charlotte, and Austin, while Asia-Pacific markets include Kuala Lumpur, Bangkok, and Jakarta. In Europe, cities like Zaragoza, Milan, and Berlin are also gaining attention.
Johor is a noteworthy example of rapid market evolution, having moved from a minor player with less than 10 MW of capacity five years ago to about 1 GW, positioning itself as the leading growth market in APAC.
Desseyn points out that in North America, areas such as Tennessee and West Texas are capturing interest, alongside regions beyond Northern Virginia’s established clusters.
Beyond Just Supply
The report emphasizes that developers should not only consider total electricity generation but also factors such as transmission capacity and the availability of substations. Communities are now scrutinizing resource consumption, environmental impacts, and potential job creation more closely than ever before.
Due to the increasing complexities of energy procurement and local regulatory hurdles, projects in jurisdictions lacking clear planning frameworks are likely to be delayed or rerouted. The future investment landscape will favor regions that can offer a reliable path through power acquisition, planning, and community acceptance.
In summary, as data centers continue to evolve, the winning regions will not merely be those with the lowest costs but those equipped to deliver development certainty through streamlined power procurement and regulatory cooperation.
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