AI data centre investors face growing risk from delayed grid connections
AI data centre investors may be valuing projects as having secured power before a live grid connection exists, according to a study from IQ-EQ and the Sustainable Real Estate Forum. The report says European facilities can wait seven to ten years for a grid connection, while construction can take two to three years.
- European data centres can wait seven to ten years for grid connections.
- Construction can take two to three years.
- Great Britain’s data centre connections queue reached around 73 GW by mid-2025.
- The proposed EU Cloud and AI Development Act aims to triple data centre capacity within five to seven years.
- The framework calls for valuations to distinguish energised assets from projects awaiting power.
Power status can mean very different things
Powering intelligence was launched in London on 3 November at the SREF x IQ-EQ Powering Intelligence Summit. The study says the term “power secured” can describe stages ranging from a submitted connection request to a live, tested grid connection.
That difference creates varying levels of execution risk for investors. According to IQ-EQ, investors can end up valuing AI infrastructure based on demand before the electricity needed to serve that demand has been secured. The report argues that energy due diligence should become a formal investment gate.
“If power is the constraint, energy geography becomes part of the investment thesis,” Tamas Mark, Global Head of Real Assets at IQ-EQ, said in the study. He added that fibre, land, tax efficiency and customer demand are no longer sufficient without confirmation that a site can be powered on the required timetable.
Grid queues are becoming an active investment risk
The study describes changing rules for grid access across Europe. In Great Britain, data centres accounted for around 73 GW of contracted demand in the connections queue by mid-2025, while reforms are now testing whether projects are ready to proceed. In the Netherlands, contracted capacity that remains unused for around two years may be withdrawn.
The proposed Cloud and AI Development Act in the EU aims to triple data centre capacity within five to seven years. The proposal would link acceleration zones to available grid capacity, storage and clean generation, although the study says it does not yet impose comparable timelines on grid operators.
The report also identifies a gap between a hyperscale tenant’s expected capacity date, which can be fixed in a lease, and the date when the grid actually connects a site. The project ultimately carries the risk in between. Zurich Insurance said the average value of the data centre projects it insures rose from $150 million to $3 billion in five years.
Framework would tie fund governance to energisation
IQ-EQ and SREF propose a five-layer governance framework covering capital and ownership, energisation, contractual dependency, resource and resilience performance, and investor transparency.
The recommendations include minimum thresholds for secured grid access in fund documents, maximum tolerances for energisation delays, and notification triggers for limited partners when agreed timelines are exceeded or contracted capacity is not secured. Valuation processes should distinguish energised assets from projects awaiting energisation or still in the connection queue.
SREF also proposes a regional delivery statement alongside each asset business plan, making external dependencies as visible as the construction programme. The study says the SINES Data Campus in Portugal continued operating without disruption during the Iberian grid outage of 28 April 2025. Its conclusion is that data centres and the energy transition can coexist if projects are carefully engineered, financed, governed and delivered.
