Data centre site selection

Data Centre Site selection

The global data centre sector is in the midst of a major expansion, with Europe alone projected to receive €100 billion in investment by 2030.[¹] At the same time, this growth is colliding with a new reality: power availability, rather than land, is increasingly the primary constraint on project viability. For developers, investors and operators, site selection has shifted from a predominantly real estate exercise to a multidisciplinary engineering and strategic challenge, in which securing grid capacity is a critical precondition before design can begin.

Why site selection matters

A decade ago, site selection often followed a relatively straightforward checklist: sufficient land, reliable fibre connectivity and proximity to urban centres. That approach is no longer adequate. Today, a structured site selection process is a foundational element that shapes a project’s long-term operational resilience, financial performance and social licence to operate. A sub-optimal location decision can undermine return on investment and limit operational effectiveness throughout the asset’s lifecycle.

This shift is particularly visible in mature European hubs. The Netherlands, for example, is home to around 200 data centres and functions as a key digital gateway, but must reconcile dense connectivity with significant spatial and energy pressures.[²][³] The Amsterdam Metropolitan Region (MRA) alone accounts for more than 70% of the country’s colocation capacity.[³] In this context, site selection is no longer about simply identifying a suitable plot; it is about safeguarding a project’s future in an environment characterised by competing demands and finite resources.

Common challenges and pitfalls

Navigating the European data centre landscape requires a clear view of the structural challenges, many of which are concentrated in the primary FLAP-D markets: Frankfurt, London, Amsterdam, Paris and Dublin. The Netherlands provides a concrete illustration of the issues that can slow or halt development.

The most critical challenge is reliable access to power. Across Europe, grid connection lead times are increasing, with the average wait in some primary markets exceeding four years.[⁴] In Amsterdam, new connections were effectively paused until 2028, reflecting severe grid congestion.[⁴] This scarcity has forced a change in approach: developers must now engage with utilities early and assess options such as behind-the-meter generation in parallel with site and real estate decisions.

Regulatory and permitting conditions present a second major risk. The 2019 moratorium on new data centres in Amsterdam and Haarlemmermeer, for example, had a “chilling effect” across the market.[³] Although the moratorium has since been lifted, it has been replaced by stricter policies that define specific development zones and require sustainability measures such as heat reuse.[³] In addition, a national freeze on new hyperscale facilities larger than 70 MW was introduced in 2022 (with some exceptions like Westpoort, Groningen, Eemshaven and Middenmeer), underlining the potential for sudden policy shifts.[³][⁵] Together, these factors can extend project timelines by years and significantly increase costs.

Community and social acceptance are now equally material. Data centres face a well-documented ‘acceptance paradox’: while 93% of people recognise their national importance, only 35% support a new facility in their own area.[⁴] Several projects in the Netherlands have demonstrated how local opposition can escalate into a significant political and financial risk.[³]

Key considerations for site selection

A robust site selection strategy combines technical, environmental and commercial analysis. Traditional criteria still apply, but their relative importance and context have changed.

• Reliable power sources and backup solutions. Access to power is now the primary selection criterion. This goes beyond nominal grid availability to include grid stability, electricity pricing and the ability to source renewable energy. In the Netherlands, 99.9% of surveyed data centres use green electricity contracts, making renewable supply effectively a baseline expectation.[³] On-site generation, UPS and Battery Energy Storage Systems (BESS) are increasingly important to support resilience and to bridge delays in grid connection.
• Network connectivity, latency and data transfer. Proximity to dense, diverse fibre networks and major internet exchanges such as AMS-IX in Amsterdam remains relevant for minimising latency.[³] However, operators must now reconcile connectivity advantages with the reality that power can be more accessible in locations further from traditional network hubs.
• Supporting infrastructure. Appropriate sites require reliable supporting infrastructure, including road access for construction and operations and a stable water supply for cooling. Water usage is under growing scrutiny, yet Dutch operators report an average Water Usage Effectiveness (WUE) of 0.20 litres/kWh, significantly better than many industry benchmarks.[³] This is due in part to the use of air-cooled chillers.
• Environmental and social impact. Demonstrable sustainability commitments are no longer optional. In Amsterdam, new permitting frameworks require data centres to integrate heat reuse into their design from the outset.[³] Proactive engagement with local communities and clearly articulated local benefits, such as employment or biodiversity measures, are increasingly important to secure social licence.
• Governmental support and financials. Alignment with regional development strategies can unlock support mechanisms. Many municipalities use incentives such as tax abatements to attract data centre investment.[⁷] A thorough assessment of Total Cost of Ownership (TCO) — including land, construction, power and taxation — is essential to evaluate a site’s long-term financial viability.[⁶]

Risk assessment and management

A forward-looking site selection process incorporates comprehensive risk assessment over the full lifecycle of the asset. This requires looking beyond immediate construction challenges to consider long-term environmental, political and regulatory stability.

Natural hazard exposure is a key geographical factor. In the Netherlands, this particularly includes flood risk. Mitigation strategies such as locating facilities outside 100- or 500-year floodplains, or designing on raised plinths, are critical to maintaining operational continuity.[⁷]

Political and regulatory stability are equally important. The Amsterdam moratorium clearly demonstrated how quickly the regulatory context can change.[³] Effective risk assessment considers not only current zoning and permitting rules, but also potential future policies related to energy, water and carbon. Markets with clear, long-term digital infrastructure strategies provide greater predictability for investors.

Long-term environmental risks, driven by climate change and tightening regulation, also influence site viability. Future water scarcity, rising energy prices and stricter carbon reporting can all affect operating costs and asset valuation. Sites with direct access to renewable energy and infrastructure that supports efficient cooling and heat reuse are better positioned to manage these future risks.

Future scalability and sustainability

Site selection decisions must support not only the data centre of today, but also the one required in ten or twenty years’ time. Planning for scalability and aligning with emerging technological and sustainability trends are essential to create a future-ready asset. The rapid growth of AI is particularly influential, reshaping facility design and placing new demands on site infrastructure.

AI workloads are pushing rack densities towards 250 kW, requiring advanced liquid cooling solutions and fundamentally changing the facility’s power and cooling profile.[⁴][⁸] Sites chosen today must be capable of accommodating these higher-density deployments, either immediately or through phased retrofit. This has implications for floor loading, space allocation and the availability of water for cooling.

Energy efficiency and sustainability are central to future readiness. In the Dutch data centre market, this shift is already visible: operators report an average operational Power Usage Effectiveness (PUE) of 1.25 and are moving towards the objectives of the Climate Neutral Data Centre Pact.[³] Design innovations such as modular construction and on-site renewable generation are increasingly used as practical strategies to accelerate deployment and reduce environmental impact.[⁴]

Scalability must be embedded in the initial masterplan. The trend is towards larger, campus-style developments that enable phased expansion.[⁷] In the Netherlands, this is reflected in a gradual shift in growth from the constrained MRA towards regions like Groningen and South Holland, which offer more space for future development and better access to renewable energy.[³]

Site selection as a strategic investment decision

In today’s interconnected context, data centre site selection has evolved far beyond a logistical or real estate decision. It is now a strategic investment choice that directly influences a project’s resilience, profitability and long-term relevance. The process demands a holistic approach that integrates technical engineering, financial modelling, regulatory foresight and community engagement.

Power scarcity, regulatory complexity and rising sustainability expectations have all raised the bar for new developments. At the same time, they have opened opportunities for more innovative and resilient solutions. Developers and operators who are able to navigate this environment — by securing power early, aligning design with environmental objectives and building constructive relationships with local stakeholders — will be better placed to create durable competitive advantages. Ultimately, a well-chosen site forms the foundation for a successful, sustainable and future-ready digital asset.

How Deerns can help

Deerns supports data centre developers in preparing for what comes next by aligning power, permitting and future-proof design well before construction begins. Our integrated approach treats policy requirements and resource constraints as engineering questions, working towards solutions that meet regulatory targets while maintaining flexibility for future growth.

Our consulting services for site evaluation include feasibility studies, engagement with utilities and comprehensive risk assessments that translate technical requirements and environmental objectives into concrete site selection criteria. With deep expertise in mechanical, electrical and plumbing (MEP) design, building physics and sustainability, we help clients navigate the growing complexity of the data centre landscape. Through local partnerships and a strong expertise in civil, structural and architectural (CSA) engineering Deerns supports clients through robust project teams. From initial concept through commissioning and optimisation, our teams work alongside clients to deliver data centre projects that are resilient, efficient and sustainable.

Sources

[¹] datacenterknowledge.com, “European Data Center Investment To Top $100B by 2030: Report”, https://www.datacenterknowledge.com/investing/european-data-center-investment-to-top-100b-by-2030-report
[²] Statista, “Number of data centers worldwide as of April 2026, by country or territory”, https://www.statista.com/statistics/1228433/data-centers-worldwide-by-country/, April 2026
[³] Dutch Data Center Association, “State of the Dutch Data Centers”, 2025
[⁴] JLL, “2026 Global Data Center Outlook”, January 2026
[⁵] CBRE, “European Data Centres Figures Q2 2025”, August 2025
[⁶] JLL, “Optimising your data centre TCO strategy”, https://www.jll.com/en-uk/insights/optimising-your-data-centre-tco-strategy, 2023
[⁷] Cushman & Wakefield, “2025 Global Data Center Market Comparison”, 2025
[⁸] JLL, “AI and energy consumption challenge data centers to innovate amid growing demand”, https://www.jll.com/en-uk/insights/ai-energy-consumption-challenge-data-centers-innovate, March 2024