Executive Summary

•  93% of respondents in the BCS Q2 2026 Data Centre Commercial Report expect demand for data centres to continue growing.
• But, while we can forecast demand, can we properly understand how to deliver, to the capacity required, with certainty?
• Tom Boxall, Head of Cost Management at BCS Consultancy says that if you can, and treat project plans as live commercial models, you’ll gain commercial advantage.

 

Demand continues to dominate conversations about data centre growth. Delivery capability will increasingly determine which projects progress and which remain part of the announced pipeline.

Investment remains strong, AI is increasing the requirement for capacity and developers continue to pursue ambitious growth plans. However, the strength of the opportunity can obscure a more important question. Can the capacity being announced actually be delivered on the cost, programme and performance assumptions supporting the investment case?

Power availability, planning requirements, specialist labour, utility interfaces and long lead equipment are all placing pressure on programmes. Each challenge can be managed individually. The difficulty arises when several affect the same project at the same time.

The latest BCS Q2 2026 Data Centre Commercial Report reflects this tension. 93% of respondents expect demand to continue growing. At the same time, most anticipate ongoing skills shortages, while supply chain volatility is increasingly viewed as a permanent market condition.

The industry has become highly effective at forecasting demand. Its next competitive advantage will come through understanding deliverability.

Traditional project sequencing is under pressure

Data centre programmes have historically followed a relatively clear sequence. Teams secured a site, confirmed power, developed the design, procured equipment and moved into construction.

That approach depended on equipment, skills and approvals being available at the point they were required. In many markets, that assumption is no longer reliable.

Long lead times are forcing procurement decisions to be made earlier. Waiting for a design to reach full maturity can affect delivery dates, but committing too soon may limit flexibility and create technical or commercial exposure.

Earlier decisions, supported by the right information, can protect both programme certainty and commercial flexibility.

Commercial, design, procurement and programme teams must work more closely, with clear ownership and a shared understanding of where delay creates the greatest risk. This requires strong governance, current market intelligence and confidence in the information supporting each decision.

Cost certainty depends on delivery certainty

Inflation is one of several factors affecting project costs.

The BCS Q2 report forecasts annual cost growth of between 5% and 8% through 2029, influenced by sustained demand, labour shortages, power constraints and supply chain pressure. However, many cost increases begin elsewhere in the programme.

A delayed grid connection can extend preliminaries and affect financing assumptions. A missed manufacturing slot may result in redesign or programme change. Limited specialist resource can disrupt testing and commissioning even when construction is substantially complete.

Cost is often the visible consequence of an earlier delivery assumption that has failed.

This means benchmarking can no longer focus only on current rates. It must also help teams understand the risks attached to those rates, how long they remain reliable and which decisions are needed to protect the commercial position.

Cost plans, programmes, procurement strategies and power assumptions must be considered together. Treating them separately creates gaps that become more expensive as a project progresses.

European delivery remains local

Demand may be growing across Europe, but there is no single European delivery model.

Power availability, planning processes, regulation, labour markets and supply chains differ significantly between locations. These conditions directly affect programme assumptions, procurement routes, stakeholder engagement and commercial risk.

Global experience remains valuable, particularly for businesses seeking consistency across multiple projects. However, local understanding is essential when assessing whether a site, power strategy or delivery programme is realistic.

An approach that succeeds in one market cannot be applied elsewhere without challenge.

Early local intelligence helps developers test the investment case against actual delivery conditions before decisions become difficult or costly to reverse.

An announcement is not a delivery strategy

Around three in ten announced data centre projects do not reach construction. This reinforces the need for greater discipline when assessing the viability of announced projects.

A credible project requires more than customer interest and capital. It needs a realistic power date, a clear planning route, access to specialist people, an achievable procurement strategy and governance that supports timely decisions.

Before a programme is publicly committed, leaders should understand which assumptions are secure and which remain exposed.

Is the stated power date realistic? Are manufacturing slots available? Does the programme reflect local planning conditions? Is the required specialist resource accessible? Can the design respond to change without undermining cost or performance?

Answering these questions early gives project leaders a clearer view of the risks attached to the programme.

Better judgement will create the advantage

The industry already has extensive data on demand, cost, power and development pipelines. The challenge is using that information early enough to influence outcomes.

Project plans should be treated as live commercial models. Power, procurement, labour, planning and cost assumptions must be reviewed as market conditions change.

Regularly reviewing these assumptions makes uncertainty more visible and manageable. The sector’s ambition must be supported by a clear understanding of the conditions required for successful delivery.

Demand will continue to shape the scale of Europe’s data centre opportunity. The ability to test assumptions early, respond to local conditions and make informed decisions will determine which projects are successfully delivered.