Access to power is the key driver behind data center siting decisions

A new report from Bloom Energy found that data center developers severely underestimate utility power delays, lending greater importance to onsite generation.

June 17, 2025 Phoebe Skok

Meta's data center in Los Lunas, New Mexico.

Image: Meta

Power availability is now the prime concern for data center developers considering their next site, according to new numbers out of onsite power tech firm Bloom Energy.

The company’s “2025 Data Center Power Report: Mid-Year Pulse” collated data from interviews with data center industry leaders and a double-blind survey of U.S.-based hyperscalers (large cloud computing provider), colocation developers and utilities focused on power procurement strategies.

Unlike last year, where fiber proximity and power availability shared the top spot, the number of survey respondents naming access to power as their main siting priority skyrocketed to 84%, which is more than double that of fiber optic proximity, local regulations and end-user proximity.

There’s also a key snag in getting projects moving: data center developers and utility providers have very different ideas about when new builds can access energy. In key markets like the wider Austin/San Antonio metro area, there can be as much as a 2-year gap between when developers expect grid power and when utilities can deliver it.

This leads data center companies to increasingly turn toward onsite power generation. The report notes that last year, only 13% of data centers incorporated primary onsite generation; by the end of the decade, that number will nearly triple, reaching 38%.

Projects could get derailed, the report cautions, by air permitting (particularly for sites adopting combustion-based generation) as scrutiny grows and onsite adoption accelerates. Air permitting is required in many jurisdictions for any new construction that will emit potentially harmful air contaminants.

“Scalable onsite power technologies with fast deployment timelines and lower emissions profiles, such as fuel cells,” the authors write, “are expected to become attractive options.”

Looming concerns over grid availability (given booming electricity demand and rising AI saturation) have also pushed developers toward onsite generation.

It’s a positive feedback loop: as more industries adopt AI, the bigger, more power-hungry data centers will become. The median data center size is already expected to grow by 200 MW in the next ten years. For context, this is nearly 115% of the current median of 175 MW.

Approximately half of hyperscaler and colocation developer survey respondents indicated they were considering transitioning to direct current (DC) distribution instead of alternating current (AC) distribution at some of their data centers within the next four years. The authors noted that this comes on the heels of Google, Meta and Microsoft releasing plans for new DC-based, more power-dense data center architectures.

Lastly, the report found that reliability remains a “non-negotiable” component of data center siting, as “power sources that do not meet data center reliability and uptime standards will not be adopted, regardless of price.”

Load flexibility is also becoming a main requirement for onsite generation, which is opening the door for cleaner power technology options, even though greenhouse gas emissions fell even lower in priority than they were last year. Still, 95% of developers reaffirmed their sustainability goals while noting that achieving them may not be a linear journey.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.