Where the bottleneck is
A data centre is two assets under one roof. One lasts 20 to 30 years, the other two to three. The scarce part is what makes both possible: a grid connection, a transformer, a planning consent.
Our risk register lists ten bottlenecks that hold back the build-out, and for each one it names who profits from the scarcity. In three cases the answer is the owner: of land with a secured grid connection, of transformers ordered in advance, and of planning consents that can no longer be challenged. This page sets out the evidence, German figures first. Every statement carries its source and its evidence grade.
What lasts 30 years, and what is replaced after three
The infrastructure covers the building and its shell, the power chain from the grid connection down to low voltage, cooling, water and fire protection. It is built once and written off over 20 to 30 years. The IT (servers, AI accelerators, networking and data storage) has an economic life of two to three years. It is replaced seven to ten times while the building stands. Alpha-Matica 2025, CNBC 2025
The capital runs the other way. IT equipment takes about 60 percent of the total investment, infrastructure about 25 percent and land about 15 percent. Alpha-Matica 2025
Leaving out the IT, a conventional air-cooled data centre costs about €8.7 million to €11.3 million ($10 million to $13 million) per megawatt of IT capacity. JLL's index for shell, core and building services put the global average at €9.3 million per megawatt in 2025, and expects €9.8 million for 2026. Turner & Townsend put the range across 52 markets at €8.2 million to €13.2 million. At CHF 11.6 million per megawatt, Zurich is the world's third most expensive market, after Tokyo and Singapore. Dollar figures are converted at the ECB reference rate of 14 September 2026. JLL 2026, Turner & Townsend 2025
These figures describe what concrete and switchgear cost. Neither is scarce. A plot with no grid connection and no building rights is worth what it earns in its current use. Give the same plot a binding grid-connection commitment, a final planning consent and transformers on order, and it is worth several times as much. The premium is set by the waiting time the buyer saves. Our inference
What is in hand at each phase, and who buys it
A site passes through six phases, and after each one it can be sold as an asset in its own right. The table gives no prices, because none has been published for German sites in phases one to three.
| Phase | What is in hand | Buyers | Hurdle cleared |
|---|---|---|---|
| 0 Origination | Nothing yet. Site screening, knowledge of the grid, contact with the landowner and the grid operator | nobody | none |
| 1 Site control | Option or exclusivity agreement on the land; grid-connection application filed | developers, powered-land funds (funds that hold land with a grid connection) | admitted to the maturity procedure; in the distribution grid, application in the queue |
| 2 Planning consent | Building rights in place, environmental assessment complete, water and waste-heat concept approved | developers, hyperscalers, utilities | planning consent |
| 3 Grid connection | Binding grid-connection commitment, transformers and switchgear ordered, design fixed | everyone; the market now trades this package as a finished product | grid connection, equipment, site |
| 4 Powered shell | Building shell connected to the grid, secured power, redundant fibre; the tenant does the fit-out | data-centre operators, colocation providers, funds | construction risk removed |
| 5 Leased | Completed facility under a lease | infrastructure funds, REITs, securitisation | an asset with stable income |
Firm figures exist for phases one and three: €50,000 per application in the maturity procedure, and €1,500 per megawatt on accepting a grid-connection offer, which comes to €60,000 for 40 megawatts. Transmission system operators 2026, § 4.3 Since 2025 the market has packaged "land, substations, transformers and cooling into a single deliverable": sites with a finished grid connection where GPUs can run straight away. Consultancy 2025
What they cost in Germany
Grid connection
In Frankfurt, Mainova and Amprion quote waits of three to five years for a grid connection, and the capacity available in the city is already taken. New projects are moving out to towns in the Rhine-Main region, 50 to 60 kilometres from the city. Others generate their own power: CyrusOne has installed 61 megawatts of gas generation on site to avoid waiting for a grid connection. Data centres use up to 40 percent of Frankfurt's electricity. TechPolicy.Press 2025
Across Germany, data centres used about 20 terawatt hours in 2024, roughly 4 percent of gross electricity consumption. Borderstep 2025 Electricity for business and industry (non-household customers) costs about €226 per megawatt hour, the third-highest price in the EU. Eurostat 2025 The United States shows where this can lead. At PJM, a US grid operator, projects wait more than eight years for a connection. ERCOT, the Texas grid operator, received connection requests for 198 gigawatts in the first quarter of 2026 alone. PJM 2026, Ascend 2026
Transformers and switchgear
Large power transformers take about 128 weeks to deliver on average, and generator step-up transformers about 144 weeks; for some units the wait is almost four years. Modelling puts supply about 30 percent short of demand in 2025. Wood Mackenzie 2026 Medium-voltage switchgear takes 26 to 32 weeks, and gas-insulated switchgear about 18 months. Specialist suppliers 2025/26 Generating power on site offers no way out either. GE Vernova's turbines are sold out until about 2030 or 2031, and data centres account for about 20 percent of its order backlog. GE Vernova 8-K 2026
Planning consent and local politics
In Germany, planning consent is a yes or a no. On 1 July 2026 Eisenach city council voted 19 to 16 to back a residents' motion against the land-use planning for an 86-hectare site. The motion carried the signatures of 432 residents. The site lies next to a substation that is due to be expanded anyway, after which up to 300 MVA of connection capacity would have been available. The land developer planned to service the site and sell it to an investor, with a planned investment volume of about €1 billion. Neither a public meeting, nor a workshop, nor the mayor's backing had prevented this. Two sources, July 2026
Where a site is already zoned for the use, consent takes 6 to 18 months. From concept to commissioning, the whole process takes three to six years. Broadstaff 2026, industry figure In the United States, local opposition blocked or delayed at least 48 projects worth about $156 billion in 2025. 10a Labs, reported by two outlets
Legal rules on efficiency and waste heat
§ 11 of the Energy Efficiency Act (Energieeffizienzgesetz, EnEfG), in force since 18 November 2023, sets binding caps on PUE (power usage effectiveness). PUE is a data centre's total electricity use divided by the electricity its IT uses. Existing facilities must reach 1.5 from 1 July 2027 and 1.3 from 1 July 2030. New data centres must reach 1.2 from 1 July 2026. From 1 January 2027, 100 percent of the electricity must come from renewable sources. For new builds, the act sets quotas for reusing waste heat: 10, 15 and 20 percent in the years 2026 to 2028. Statute text
A ministry draft of 9 April 2026 would relax every limit: to 1.6 and 1.4 for existing facilities and to 1.3 for new builds. The rule would also apply only to facilities with 500 kilowatts of IT capacity or more. The draft is not in force. Two law firms, April 2026 The industry's average PUE has barely moved from 1.54 in six years. Uptime Institute 2025
The IT drives the design
Halls built for racks of 6 to 10 kilowatts are already unfit for the 80 to 140 kilowatts that today's AI racks draw. NVIDIA's Rubin generation is expected to need 250 to 900 kilowatts per rack. Depending on the source, air cooling reaches its limit at about 30 to 40 kilowatts. Introl 2025 Converting an air-cooled hall for current liquid-cooled racks is estimated to cost €52,000 to €169,000 per rack. Moody's, cited by CRA 2025 A building will therefore outlast three chip generations only if it has two orders of magnitude of headroom in power per rack. Our inference
Where the statements come from
- Lifetimes of infrastructure and IT, split of the investment: Alpha-Matica (2025); CNBC (14 November 2025). Construction cost per megawatt: JLL, Global Data Center Outlook (2026); Turner & Townsend, Data Centre Construction Cost Index 2025/26. Converted at the ECB reference rate of 14 September 2026: €1 = $1.1551 = CHF 0.9431.
- Application fee and realisation security: concept paper of the four transmission system operators, 5 February 2026, § 4.3. Primary source.
- Frankfurt: TechPolicy.Press (2025), citing Mainova, Amprion and IHK Frankfurt (the Frankfurt chamber of commerce). Consumption across Germany: Borderstep Institute with Bitkom (2025). Electricity price: Eurostat, second half of 2025. United States: PJM Inside Lines (January 2026); Ascend Analytics (2026).
- Lead times: Wood Mackenzie, survey from the second quarter of 2025, reported by Power Magazine (2026); pv magazine USA (11 May 2026); GE Vernova, Form 8-K for the first quarter of 2026, SEC.
- Eisenach: datacenter-insider.de and Eisenach Online, both July 2026, reporting independently. Consent timescales: Broadstaff (2026), industry figure. United States: Yahoo Finance (2025) and Construction Dive (2026), both based on data from 10a Labs, a data provider with its own interest in the subject. The figures show only the order of magnitude.
- EnEfG: gesetze-im-internet.de, §§ 11 to 13. Draft: Taylor Wessing and Orrick, April 2026. PUE: Uptime Institute, Global Data Center Survey 2025.
- Rack density and cooling: Introl (2025); Moody's, cited by CRA Insights (December 2025).
- Not on this page: the rule by which we decide to sell or keep developing when a site reaches the next phase, the capital structure in each phase, and what a long-term lease does to the equity employed. Those remain our own assessment. We publish what we have evidenced.