Data centre assets left stranded by power constraints

Data centres have become critical infrastructure for our digital economy, but in some regions policy ambitions are now moving faster than power infrastructure can support. The result - facilities or projects left in limbo because they cannot get sufficient electricity or meet new rules.

In Ireland, for example, a data centre boom collided with grid limits. The Irish grid operator imposed a moratorium on new data centre power connections in the Dublin area in 2022, leaving many planned sites unable to secure electricity

As of late 2025, some €5.8 billion ($6.8 billion) worth of Irish data centre projects are ‘stranded’ - they have land and permits in place but no grid capacity to plug into.

These stalled investments vividly illustrate what happens when power infrastructure lags behind digital policy. And Ireland isn’t alone; similar power constraints are emerging in other European hubs like London, Amsterdam and Frankfurt, where developers face rising energy pressures that threaten project viability.

This imbalance between policy and infrastructure can stem from multiple factors. Rapid growth in data demand encourages ambitious expansions, but building out the electrical grid or renewable energy supply takes years of planning and investment.

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Policymakers, pressured by climate goals and community concerns, may cap or slow data centre developments until greener, more robust grids are in place. In Ireland’s case, regulators considered requiring new data centres to provide their own power generation or storage to ease the strain. 

The intention is to align data growth with sustainability - but in practice, it has left projects on hold and billions of euros idle. 

The situation underscores a broader challenge across Europe; how do we ensure digital infrastructure can grow without outpacing the energy infrastructure and environmental policies that support it?

Looking ahead, data centre operators must also contend with a wave of new regulations focused on efficiency and sustainability. Governments and the EU are formulating rules that could raise the bar for energy performance, potentially turning some existing facilities into liabilities overnight.

Under current proposals, any new data centre built before mid-2026 would have to retrofit to a power usage effectiveness (PUE) of 1.5 by 2026, and further improve to PUE 1.3 by 2030. (PUE is a measure of efficiency, with 1.0 being perfect efficiency – so 1.3 is a very stringent target.)

The same German law is set to mandate a 100% renewable energy supply for data centres by 2027, slightly delayed from an initial 2025 target. Other requirements, like waste heat reuse quotas (e.g. in Germany new sites must eventually reuse 20–40% of waste heat) are also being introduced.

At the EU level, initiatives are underway to make data centres carbon-neutral by 2030, with proposals for an EU Data Centre Energy Efficiency code and reporting mandates for any facility over 500 kW of IT load.

These emerging rules on efficiency, renewable energy use, and even obligations such as using local renewable sources or sharing energy with local communities could quickly render many older data centres non-compliant or uneconomical.

A facility designed a decade ago with a PUE of 1.8 and running on grid electricity might struggle to hit a 1.3 PUE or secure entirely green power without major upgrades. If operators are forced to buy only renewable electricity, they may face higher costs that they cannot pass on to customers, jeopardising the business case for older sites. 

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The regulatory pressures, while crucial for sustainability, will make some existing data centres obsolete or too costly to operate unless they are upgraded. We may soon see more stranded assets, not for lack of power connections, but because they can’t meet new legal standards or climate goals.

Rather than abandoning these at-risk facilities, the industry is increasingly looking to retrofit and repower them. In fact, we think there will be a retrofit revolution in data centres across Europe this decade, as upgrading existing sites often makes more sense than building afresh.

We believe that this will become the dominant delivery model for new capacity amid grid constraints and sustainability demands. 

The logic is a well-executed retrofit can transform an inefficient, power constrained data centre into a state-of-the-art facility that meets modern standards. Crucially, this can be done faster and at lower cost than constructing a brand-new resource. 

Retrofitting is also often the greener option. By extending the life of an existing site, companies avoid the substantial embodied carbon that would be emitted constructing a new facility from scratch.

Reusing structures and equipment where possible means less concrete, steel and electronic waste - aligning with circular economy principles. Indeed, the most sustainable data centre may be the one that’s already built - if we can modernise it to run efficiently.

Upgrades like high-efficiency cooling, LED lighting, smarter power distribution, and on-site renewables or battery storage can dramatically reduce an older data centre’s environmental impact. Some operators are even adding heat reuse systems to feed excess server heat into local district heating, turning a compliance obligation into a community benefit.

Another driver for the retrofit trend is the changing technical requirements of today’s workloads. The rise of AI and high-density computing means new data halls must support much greater power density per rack. Many European data centres built in the early 2010s or before were designed for 5–10 kW per rack at most; now cutting-edge AI deployments might demand 30–50 kW+ per rack, often requiring liquid cooling solutions.

In fact, over 60% of existing data centres in Ireland, the UK and mainland Europe were built before 2015, under very different expectations for power and cooling needs. Without fundamental re-engineering, a 20-year-old facility simply cannot accommodate these new loads or achieve the resiliency modern users expect. 

This is fuelling a market for overhauling power and cooling infrastructure to increase capacity and efficiency. From swapping out legacy chillers for advanced cooling systems, to reinforcing electrical gear, so that backup generators and UPS systems can handle higher peak loads, these retrofits aim to give old data centres a new lease of life as high-performance, compliant assets.

Retrofitting a live data centre is no simple task. These projects demand specialised engineering expertise to modernise critical systems without interrupting the 24/7 operations that customers rely on.

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Planning is everything because engineers must carefully phase the works, often upgrading one subsystem at a time, to maintain uptime. What's needed is more companies that can re-work power LV/MV infrastructure – the backbone of the facility - and critical systems in live environments.

Taking a balanced view, not every data centre can or should be saved by retrofitting - some outdated sites may be too inefficient or poorly located to justify upgrades. New flagship facilities will still be built, especially as technologies like modular nuclear power or advanced cooling promise cleaner growth. 

The era of carefree expansion is over; power and policy constraints mean the industry must get smarter about using what it has. European regulators and the public expect data centres to be efficient, green, and thoughtful neighbours on the grid. 

The good news is that with ingenuity and investment, many existing data centres can be transformed to meet those expectations. A wave of innovation in retrofit techniques, from AI-driven energy management to novel heat reuse partnerships, is already underway.