Growing construction supply chain risk is jeopardising Europe’s digital future as rapidly evolving cloud computing and AI technologies drive ever-greater demand for data centres, according to a new report.
The Data Centre Trends Report from global construction consultancy Rider Levett Bucknall (RLB) found that a third of data centre operators have cancelled projects due to constraints on the construction supply chain.
Furthermore, 61% expect the risk of supply chain disruption to grow in 2024.
Cloud and AI driving data centre demand
The survey of 475 executives from data centre operators and contractors found that cloud computing (54%) and AI (53%) are the main drivers of demand for data centres in Europe.
Some 65% of those surveyed expect to commission more data centre capacity in 2024 than they did last year.
However, 70% believe shortages and disruptions in the construction supply chain will limit digital transformation in Europe over the next five years.
Pressures are rising on supply chains
The report said the war in Ukraine and other geopolitical events have exposed existing vulnerabilities in supply chains, while the cost of construction materials is expected to keep rising.
The climate crisis is adding further pressure, as regulators set ever-more stringent energy efficiency requirements for data centres and associated infrastructure, while extreme weather events threat to disrupt the construction supply chain.
Supply chain risk has led 35% of operators to reduce the number of planned data centres. Meanwhile, 59% of contractors have turned down projects they deemed too risky.
Sustainability on agenda – but adoption limited
The survey also found that while sustainability is a priority for data centre design, adoption has been limited so far.
Data centre design priorities include efficiency of power consumption (61%), minimising embodied carbon (59%) and reducing carbon emissions (49%).
However, only 40% have adopted on-site renewable generation, just 37% measure and reduce embodied carbon, and 31% scrutinise their suppliers’ climate performance.
Andrew Fettes-Brown, Europe service transformation director and head of data centres at RLB, said: “Our findings reveal increasing concerns within the data centre sector over the resilience of its construction supply chain and its ability to keep pace with the rapid growth of data and digital services.
“While our survey reveals that operators and contractors are already using contractual measures to share risk, greater transparency is needed. Working together can build trust, enable future planning and mitigate risks, ensuring the sector can meet demand sustainably and profitably.
“To further strengthen supply chain resilience, our experts also recommend location diversification, flexible power source options, sustainable practices, adaptable designs and standardised components.”
