Data center schedules now start at the substation

Data center construction delays now originate in utility studies, substation builds and power contracts, long before the shell or the fit-out is at risk. Leading developers manage time to power as a chain of priced obligations shared with utilities, contractors and tenants.

Data centersSegeta Insights
Data centers
The number5 of 16 GW

of 2026 data center capacity was actually under construction

What is at stake

Each month of slippage on a 100 MW colocation campus can put about $$25 million at risk before tenant credits.

Where days are lost
  1. Large-load study and tariff commitment
  2. Substation and transmission build
  3. Bridging power and ready for service

The first four articles in this series followed solar and wind projects from interconnection to commercial operation. Data centers now compete with those projects for the same grid capacity, the same transformer factories and the same crews of licensed electricians. As a result, the handoffs that delay a solar farm increasingly delay a hyperscale campus as well.

For most of the industry's history, the binding constraint on a data center was the building itself: land, shell, cooling and fit-out. That ordering has reversed over the past three years, as developers now secure power first and design the campus around the date a utility can deliver it. The shell is frequently ready well before permanent power arrives, and the schedule that matters is the one held by the utility.

Sightline Climate found that 26 percent of 110 data center projects expected online in 2025 were delayed, and it expects 30 to 50 percent of large facilities scheduled for 2026 to slip, citing power constraints, equipment shortages and local opposition.1 The causes it names sit largely outside the construction contract, in utility studies, substation builds and tariff commitments. This article sets out where data center construction delays originate, what each day of delay costs and what leaders can do about it.

Demand for power is growing faster than the grid can connect it

US data centers used about 4.4 percent of the nation's electricity in 2023, and Lawrence Berkeley National Laboratory projects that share could reach 6.7 to 12 percent by 2028.2 Primary colocation markets reached a record low vacancy of 1.4 percent in the first half of 2026, with a record 7,481 MW under construction and 80.4 percent of that capacity already committed to tenants.3 JLL estimates the average wait for a grid connection in the United States at about four years.4 Utility queues are larger still, as ERCOT was tracking about 410 GW of large loads seeking interconnection in March 2026, roughly 87 percent of them data centers.5

Northern Virginia, the largest market, shows how the pressure lands on a single utility. In 2024, Dominion Energy signaled that new loads above 100 MW could wait as long as seven years for a connection.6 By mid-2026 it reported more than 53 GW of data center capacity in various stages of contracting, including about 12 GW under electric service agreements.7

Data center construction delays concentrate at three power handoffs

The building itself is the part of a data center that developers know how to plan, and shell construction typically takes 18 to 24 months in most US markets.8 The days are lost where the developer's schedule depends on a utility, a transformer factory or a power contract, and three handoffs account for most of them.

Only about 5 of the 16 GW of data center capacity slated for 2026 was under construction early in the year.

Exhibit 1Only about 5 of the 16 GW slated for 2026 was under constructionData center capacity slated to come online in 2026, GW, early 2026
Slated for 202616
Announced, no milestones11
Under construction5

Source: Sightline Climate, Data Center Outlook (press release via Utility Dive), March 2026

01Large-load study and tariff commitment

The utility's load study, facility study and electric service agreement set both the energization date and the financial terms, and each passes through portals, letters and email. Tariffs now ask for firm commitments, and Ohio regulators approved an AEP Ohio tariff in July 2025 that requires new loads above 25 MW to pay for at least 85 percent of subscribed capacity for up to 12 years.9 A study revision or a deposit deadline missed in an inbox can move a campus into a later study cycle.

02Substation and transmission build

Substations, transmission taps and network upgrades must be designed, procured and energized, and large power transformers take two to four years from most manufacturers.8 CBRE reports that grid capacity for existing projects is largely booked through 2030 in most markets, so a slipped substation date rarely finds an earlier slot.10 The general contractor's schedule usually carries a single permanent power date and learns of changes late.

03Bridging power and ready for service

Where permanent power lags, developers increasingly turn to natural gas generation as temporary bridge power, which brings its own permits, equipment and fuel contracts.11 CBRE also notes that ready-for-service fit-out dates are expanding from weeks to several months.3 Tenant acceptance then depends on a bridging plan that few schedules track with the same rigor as the building.

A connected operating model manages time to power as obligations

Leading developers are beginning to manage the path to energization as a network of obligations, each with an owner, a deadline and a cost for every day it stays open. A live layer reads the systems already in use, including Primavera P6, SAP or Oracle, utility portals, email and site messaging, and runs a four-step loop:

  1. Detect

    risk where it first appears, such as a utility engineer's note that a breaker delay will move the substation in-service date.

  2. Explain

    which milestones and contract terms it affects, from the substation in-service date to the tenant's lease commencement.

  3. Recommend

    recovery options with owners and expected impact, such as bridging generation, phased energization or a revised fit-out sequence.

  4. Execute and track

    each agreed action to closure, measuring the exposure retired in days and dollars.

The same record can give tenants, lenders and the utility's account team current status, and give equipment suppliers one channel for dates and factory test reports. Artificial intelligence does the reading, linking and drafting, while people remain accountable for every judgment and commercial decision.

A delayed 100 MW campus can forgo about $$850,000 a day

Cost of delay for a data center is the daily value lost when IT capacity misses its ready-for-service date, including deferred lease or compute revenue, financing carry on capital already spent and any credits owed to tenants.

Each month of slippage on a 100 MW colocation campus can put about $$25 million at risk before tenant credits.

Exhibit 2. Estimated daily cost of delay for a composite 100 MW colocation campus

ComponentBasisEstimate per day
Lease revenue deferred100,000 kW at the record primary-market asking rate of $$196.25 per kW per month for 250 to 500 kW requirements; larger wholesale leases often price lower, so this is an upper bound 10About $$645,000
Construction financing carryDevelopment cost of about $$1.76 billion at $$17.6 million per MW 12; assumes 60 percent drawn at a 7 percent all-in rateAbout $$202,500
Total before tenant creditsSum of the two components, or about $$8,500 per MW of IT capacity per dayAbout $$847,500

Source: Segeta estimate based on CBRE and Cushman & Wakefield data; financing and pricing assumptions are illustrative.

On these assumptions, a 30-day slip puts about $$25 million at risk and a 60-day slip about $$51 million, before credits owed to tenants under delivery clauses. Lower pricing on hyperscale leases would shrink the revenue line, while phased delivery of data halls and bridging power may recover part of the exposure at the cost of fuel, rental equipment and additional permits.

What data center development and delivery leaders can do now

  1. 01Map every obligation between site and energization

    List the twenty to thirty commitments that set the ready-for-service date, from load study deposits to transformer factory tests, and name an owner on each side of every handoff.

  2. 02Price each power milestone before it slips

    Attach a daily cost of delay to the substation, transmission and bridging milestones, so a utility update is discussed in dollars on the day it arrives.

  3. 03Put utility correspondence on the critical path

    Link study reports, service agreement terms and in-service dates to the contractor's schedule, updated as letters and emails arrive.

  4. 04Plan bridging power as a parallel project

    Treat onsite generation permits, equipment and fuel contracts as scheduled work with named owners, started early enough to protect the first tenant's date.

  5. 05Measure the time from signal to action

    Report monthly how many days pass between the first evidence of a power risk and the assignment of a recovery action.

Developers cannot shorten utility study cycles or transformer lead times on their own, yet they can control how quickly a warning from the utility becomes a decision. Those that manage time to power as a live, priced set of obligations are likely to deliver capacity closer to commitment and earn the confidence of tenants and lenders for the next campus.

Questions leaders ask

Why are data center construction projects delayed?

Most delays now originate in power delivery. Utility load studies, substation and transmission builds, transformer lead times and bridging power arrangements set the energization date, and shell construction typically takes 18 to 24 months. Sightline Climate expects 30 to 50 percent of large data centers scheduled for 2026 to slip, citing power constraints, equipment shortages and local opposition.

How long does it take to get grid power for a new data center?

JLL estimates the average wait for a grid connection in the United States at about four years. In Northern Virginia, Dominion Energy signaled in 2024 that loads above 100 MW could wait as long as seven years, and many utilities now require firm tariff commitments before they build substations and network upgrades.

What does a day of delay cost a data center developer?

On illustrative assumptions, a 100 MW colocation campus can forgo about $$850,000 a day. That figure combines roughly $$645,000 of deferred lease revenue at a record CBRE asking rate with about $$200,000 of financing carry on a $$1.76 billion development, before any credits owed to tenants.

How can developers reduce data center power delays?

Developers can map every obligation between site selection and energization, attach a daily cost to each power milestone and link utility correspondence to the contractor's schedule. Treating bridging power as a parallel project with named owners, and measuring the days between a warning and a recovery action, can recover weeks on a campus.

Notes and sources
  1. Catherine Boudreau, "Up to half of the world's data centers may be delayed this year," Latitude Media, February 2026, latitudemedia.com.
  2. Lawrence Berkeley National Laboratory, "Berkeley Lab report evaluates increase in electricity demand from data centers" (on the 2024 United States Data Center Energy Usage Report), January 2025, energyanalysis.lbl.gov.
  3. CBRE, "North America Data Center Trends H1 2026," CBRE, August 2026, cbre.com.
  4. Amy Wolff Sorter, "The JLL data center outlook: Growth, growth and more growth" (on the JLL 2026 Global Data Center Outlook), Connect CRE, January 2026, connectcre.com.
  5. ERCOT, "Interconnection and Grid Analysis Update," ERCOT Board materials, April 2026, ercot.com.
  6. Josh Saul, "Data centers face seven-year wait for Dominion power hookups," Bloomberg News via Bloomberg Law, August 2024, news.bloomberglaw.com.
  7. MarketBeat, "Dominion Energy Q2 earnings call highlights," MarketBeat, July 2026, marketbeat.com.
  8. Lori Lovely, "How long does it take to power a data center," Electrical Contractor, August 2026, ecmag.com.
  9. "Regulator approves AEP Ohio's landmark data center tariff," POWER, July 2025, powermag.com.
  10. CBRE, "North America Data Center Trends H2 2025," CBRE, February 2026, cbre.com.
  11. "Bring your own power becomes reality for data centers" (on the JLL 2026 Global Data Center Outlook), Facility Executive, January 2026, facilityexecutive.com.
  12. Cushman & Wakefield, "2026 Data Center Development Cost Guide," Cushman & Wakefield, 2026, cushmanwakefield.com.