Half of Planned Data Centers May Be Delayed

Up to half of data centers scheduled to become operational in 2026 may be delayed due to power constraints, supply chain issues and community opposition, a new report found.

The report by Sightline Climate, an energy transition research and intelligence company, tracks 777 hyperscale data centers announced globally since 2024, which account for 190 gigawatts (GW) of electricity demand for about 140 projects. It found that while more than 16 GW of capacity is scheduled to come online in 2026, just 5 GW is now under construction. The remaining 11 GW, while announced, shows no construction progress.

Sightline expects 30-50% of this year’s projects to be delayed and noted that developers are shifting their timetables back. Just 26% of expected 2025 data center capacity was added, the report found.

AI data centers have seen rapid development in recent years as major tech companies race to build hyperscale campuses as AI makes rapid advances in deployment and potential uses. These data centers need massive amounts of around-the-clock electricity, and have caused concerns about the increasing strain on the electric grid, and rising costs for all consumers.

As developers scramble to find available power on the grid, some have turned to building their own generation that is not connected to the electric grid. At the same time, regional electric grid operators have struggled to meet the rising demand and modernize their regulations so that the cost of upgrading electric infrastructure does not fall of utility customers.

The report notes that while grid-connected projects remain the most common, hyperscale developers are increasingly announcing projects with their own on-site generation, or taking a hybrid approach to the problem. While behind-the-meter and hybrid power account for less than 10% of projects, they account for nearly half of the expected capacity because large developers are increasingly opting for huge data campuses where on-site power generation makes the most sense.

The report also notes that almost half the announced projects have not announced a power strategy. Many data center announcements are speculative, as landowners market their property as data center locations and try to find a tenant before moving forward with construction.

The number of data centers that will ultimately be built and the amount of grid-connected power that will be required is central to the problems regional grid operators, including Mid-Atlantic operator PJM Interconnection, are facing in making sure that data center operator pay for their own power and upgrades, so not as to saddle other utility customers with the cost.