The Tool Desk
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1. Access to power shaped where projects could go
Power availability was both a site-selection issue and a factor in project timing. CBRE reported that power availability influenced operator location decisions in North America in the second half of 2023, while its construction brief said limited available power contributed to longer completion timelines. CBRE’s H2 2023 North America report and CBRE’s 2023 construction brief describe those market conditions.
The practical constraint is not simply whether a region has electricity. A project also depends on whether sufficient grid capacity can be secured at its chosen site and when a connection can be delivered. Those conditions vary by location, so the 2023 reporting does not establish that every data center market faced the same shortage.
2. Suitable land and permits were location-dependent hurdles
Expensive land can make a site less viable, while land availability and permitting rules can narrow the set of places where a project can proceed. CBRE identified land expense as a constraint on new construction. In a later U.S. policy discussion, the National Telecommunications and Information Administration (NTIA) listed land unavailability and restrictive permitting as possible localized challenges—not as a measurement of how often they occurred across the country in 2023. NTIA’s 2024 request for comments provides that policy context.
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Turner & Townsend described a more specific European difficulty: in some markets, securing project-permitting approvals and power connections was becoming harder amid tighter regulation and changing public opinion. Its 2023 report’s Europe lead, Conor Nugent, put it this way: “While many European markets are welcoming data centre investment, securing project permitting approvals and power connections is becoming more difficult due to a tightening regulatory landscape, amplified by changing public opinion.” Turner & Townsend’s 2023 Data Centre Cost Index does not support treating that observation as a rule for all European countries, much less for every global market.
3. Rising construction costs and longer schedules complicated delivery
Strong construction activity did not mean projects were being completed quickly. CBRE reported 2,288 MW of data center capacity under construction across U.S. primary markets in the first half of 2023, up 25% from a year earlier. That is capacity under construction, not capacity already completed or operating. In the same brief, CBRE said rising costs, labor shortages and limited power extended completion timelines.
A separate Turner & Townsend index measure showed an average year-on-year construction cost increase of 6% across its index markets from 2022 to 2023, compared with 4% tender-price inflation over the same period. These are distinct measures: the first is the index’s average cost increase, and the second is tender-price inflation. Neither should be read as a universal increase for every project or as a global price for data center construction. Turner & Townsend’s 2023 index sets out the covered-market figures.
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4. Critical equipment and materials could hold up projects
Even when a site, power plan and construction schedule were in place, equipment availability could affect delivery. CBRE’s H2 2023 North America report said costs remained elevated because of shortages in critical items including generators, chillers and transformers, although supply-chain resilience had improved. Turner & Townsend also reported longer lead times for key data center equipment and project delays attributed to global material shortages.
These constraints help explain why rising demand or a large construction pipeline does not automatically become commissioned capacity on schedule: individual equipment deliveries can be dependencies in a project’s build sequence. The cited reports identify these categories and delays, but do not provide a single lead-time figure that applies across equipment types and markets.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.5. Experienced workers were difficult to secure
Construction teams with relevant data center experience were another delivery constraint. CBRE included labor shortages among the factors extending completion timelines in U.S. primary markets. Turner & Townsend described experienced data center construction workers as scarce and linked competition for talent with higher labor costs.
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These are market observations, not one unified workforce statistic. NTIA’s 2024 U.S. policy discussion separately identified a skilled workforce as one factor on which continued industry growth depends; that statement provides later policy context rather than a measured 2023 labor-shortage rate.
How to assess which challenge matters for a project
For a specific proposed site, the useful question is not which obstacle ranked first worldwide, but which constraints could control feasibility or the delivery date. Compare the local conditions on these dimensions:
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- Site availability and land cost.
- Permitting requirements and local regulatory conditions.
- Lead times for generators, chillers, transformers and other critical equipment.
- Availability of skilled construction labor.
- Construction costs and the expected delivery schedule.
CBRE’s reports describe North American and U.S. conditions, Turner & Townsend’s index covers its selected markets and includes a European permitting observation, and NTIA’s 2024 document is a U.S. policy source. Together, they show why the obstacles overlapped in 2023, but they do not establish a comparable global ranking.
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