The report, which interviewed over 700 senior decisionmakers across the data centre ecosystem in the UK and Europe, prior to the start of the Middle East conflict, finds that the data centre market has returned at scale with operators expected to commission 42 % more capacity in 2026 than 2025, representing a staggering 319 % increase since 2023. The sector is structurally evolving, with operators and contractors quoting AI as a primary driver of data centre demand at 45 %, but growth is increasingly broad-based, with 5G / 6G( 41 %) and Cloud Computing( 38 %), High Performance Computing( 33 %) and Sustainable IT( 32 %) also cited.

However, the future of Europe’ s data centre expansion is not dependent on demand, but whether there is the ability to deliver, with structural challenges to the next wave of digital infrastructure including limited access to power, permitting delays and renewed pressure on materials, equipment and specialist labour.

Middle East impact

While RLB’ s research took place prior to the beginning of the Middle East conflict, the industry is once again navigating the impact of international events. Much will depend on how quickly the current situation is resolved, but it is important to recognise that many underlying conditions are more positive today than during previous shocks.

While currently there is little direct impact on material or equipment prices for projects being tendered or underway, there have been immediate impacts in the form of longer transit times and increased shipping costs, as major freight continues to avoid the region. RLB is monitoring the situation and in regular contact with the wider supply chain.

Relocation is likely to find energy supplies

Energy strategy is central to development strategy – securing grid connections, negotiating private power arrangements and exploring colocation with generation or storage assets now commercial imperatives. The top three challenges quoted by those surveyed included access to power( 35 %), permitting delays( 33 %) and price and lead times of materials and equipment( 29 %).

Over half( 63 %) of respondents also agreed that data centres will increasingly relocate with other advanced facilities such as semiconductor fabrication plants, AI quantum labs and clean energy storage sites.

There is predicted growth in alternative energy sources with 69 % of those quested quoting private PPAs, on-site solar and battery storage expected to help reduce reliance on constrained public grid infrastructure in the next three years.

Across Europe, markets beyond the traditional FLAP-D core are rising in prominence with power and permit availability and longterm sustainability key with the Nordics, Spain, Italy and Poland becoming popular location choices.

Price increases are expected and penalties for late delivery significant

Price increases continue to rise as AI-driven demand impacts supply chain and inflation rises. The highest price increases are expected for battery energy storage systems( BESS) at a 4.3 % increase, copper cable 4 % and CRAC / CRAH at 3.7 %.

The scale and complexity of projects is increasing risk concentration. Larger, more power-dense and bespoke facilities place greater reliance on a narrower band of suppliers and contractors. Delivery delays now carry material financial and reputational consequences. Penalties for late delivery are significant.

Sustainability pressure intensifies but adoption gradual

Although sustainability expectations from regulators, investors and customers continue to intensify, progress on sustainability is slow with 41 % having already adopted sustainability measures. However, reducing carbon emissions and increasing energy efficiency is once again cited as the top priority for data centre design( 38 %), with 3 % more respondents wanting to adopt on-site renewable generation than last year. Bridging this gap will require more than ambition; structural change in how many projects are planned and delivered is crucial.

Closer collaboration to move industry forward

However, the industry is already working together to mitigate supply chain disruptions or delays with 42 % of operators saying they have already entered risk sharing partnerships and 64 % of those surveyed believe collaboration between developers, OEMs and energy providers will unlock new energy capacity. �

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