NEWS

European Datacentre D&C: Navigating Transformation into 2026

The European data centre landscape has entered a defining period. After years of exponential growth driven by AI, cloud adoption, and data sovereignty requirements, the sector now faces a more complex environment shaped by grid capacity constraints, regulatory evolution, and shifting capital flows.

The Infrastructure Reality

Western Europe’s power grid limitations have fundamentally altered development patterns. Frankfurt’s capacity constraints have pushed developers toward secondary markets. Ireland imposed its first data centre moratorium, whilst Amsterdam’s restrictions remain in place. This scarcity has accelerated interest in the Nordics, where renewable energy abundance and cooling advantages create compelling economics. Spain and Portugal are emerging as credible alternatives, benefiting from solar capacity and improving connectivity.

Lead times for critical electrical infrastructure—transformers, switchgear, generators—remain extended at 18-24 months. The MEP supply chain faces unprecedented strain. Mechanical contractors with hyperscale experience command premium fees and are often booked two years ahead. We’re seeing increased vertical integration, with developers acquiring specialist MEP subcontractors to secure capacity and expertise.

Capital and Consolidation

Hyperscalers continue their build-to-suit programmes with rigorous site selection around power availability and sustainability credentials. Infrastructure funds—Brookfield, Macquarie, Digital Realty—deploy significant capital, though with heightened ESG due diligence. Consolidation amongst wholesale operators continues, creating a two-tier market: hyperscale operators with continental reach, and smaller edge facilities serving specific markets.

Liberation Day’s Ripple Effects

President Trump’s Liberation Day tariffs in early 2025 initially caused consternation around equipment sourcing from Asia. However, the practical impact proved nuanced—European hyperscalers had largely diversified supply chains following earlier geopolitical tensions. The more significant effect has been psychological: renewed European focus on strategic autonomy in digital infrastructure, accelerating local manufacturing initiatives.

Looking Toward 2026

AI workload growth drives unprecedented power density requirements—100kW per rack is becoming routine. This demands different engineering approaches and sophisticated cooling solutions, creating opportunities for liquid cooling and advanced thermal management specialists.

The MEP Talent Crisis

The mechanical, electrical, and plumbing talent shortage has become the sector’s most critical constraint. Competition for experienced MEP engineers, particularly those with hyperscale data centre expertise, is extraordinarily fierce. Design engineers capable of handling high-density electrical distribution and advanced cooling systems are being recruited 12-18 months before project commencement. Commissioning engineers command day rates that would have seemed remarkable three years ago.

Project managers with proven MEP coordination experience across European jurisdictions are worth their weight in gold. We’re seeing contractors poach entire teams, whilst operators build internal MEP capabilities previously outsourced. Continental mobility matters—engineers willing to work across multiple European sites find themselves with unprecedented leverage. Compensation packages have risen 30-40% in two years, and retention strategies are as critical as recruitment.

The EU’s Corporate Sustainability Reporting Directive intensifies sustainability pressure, transforming senior appointments. We’re recruiting sustainability directors and energy strategy specialists into roles that didn’t exist recently.

For those navigating this landscape, the opportunity lies in the complexity. Success requires leaders who understand the interplay between power availability, regulatory frameworks, capital deployment, and operational excellence—with MEP capability increasingly the decisive competitive advantage.