What do Supply Constraints Mean for Data Centre Builds?

The data centre industry faces growing construction delays driven by water, energy and waste infrastructure challenges, with nearly half of planned facilities at risk of permitting holdups.

The construction sector is grappling with a new challenge as the data centre boom collides with infrastructure reality. On 14 April 2025, Veolia announced its Data Center Resource 360 offering at London's Outernet venue, highlighting the mounting pressure on builders and developers to deliver facilities that can meet increasingly stringent resource requirements.

The French environmental services firm's new suite could address critical construction bottlenecks that are threatening to slow the industry's explosive growth. According to Veolia's estimates, nearly half of all planned or under construction data centre facilities currently face potential permitting delays, driven primarily by concerns over water consumption and energy use.

This regulatory challenge represents a significant obstacle for construction firms working in the sector, as traditional building approaches struggle to meet the demands of modern hyperscale facilities. The shift towards more resource-intensive AI and machine learning applications has amplified these pressures, requiring construction teams to integrate increasingly sophisticated infrastructure solutions from the earliest design stages.

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Construction delays mount across sector

The scale of the infrastructure challenge facing construction teams is substantial. By 2030, the combined water consumption of data centres and semiconductor manufacturing is expected to equal that of 46 million people, an amount roughly equivalent to the combined populations of the New York, Los Angeles and Paris metropolitan areas.

Global data centre capacity is projected to nearly triple over the same period, with facility numbers growing at around 11% per year through 2034. This growth trajectory could place enormous pressure on construction companies to deliver increasingly complex projects within tighter regulatory frameworks.

Richard Kirkman, Veolia's newly appointed CEO for Northern Europe, was direct about the economics involved during the London event. "Around 50% of the cost of AI infrastructure comes from water and power consumption," he said.

For construction firms, this could mean that mechanical, electrical and plumbing systems now represent a far larger proportion of project scope and complexity than in traditional commercial builds.

The semiconductor industry tells a similar story, with chip manufacturing expected to grow by 26% in 2026 alone. This growth, driven in part by a global trend towards domestic manufacturing as countries reduce their reliance on trade with traditional electronics powerhouses like China, could create additional demand for specialised construction expertise.

The convergence of these trends is reshaping project timelines and budgets across the sector. Construction firms are increasingly finding that securing planning permission requires demonstrating comprehensive resource management strategies well before breaking ground, adding months to pre-construction phases.

Specialised water systems required

Veolia's Data Center Resource 360 offering could help construction teams navigate these challenges by providing integrated solutions for water, energy and waste management. The suite uses Hubgrade, Veolia's existing digital platform, which employs AI and predictive analytics to monitor water consumption, energy performance and maintenance operations in real time.

According to the firm's estimates, the system could help operators achieve a reduction in water footprint of up to 75%, energy efficiency improvements of up to 20% and waste recycling rates of up to 95%. For construction projects, this could mean designing and installing more sophisticated water treatment and recycling systems from the outset.

Will Hewes from AWS, who participated in a panel discussion at the event, outlined the practical construction implications.

"We'll have, in the next couple of years, over 120 data centres around the world using recycled water," he said.

The firm is also committed to returning more water to communities than it consumes. However, Will acknowledged that tech companies cannot manage such initiatives without specialist expertise.

"We are really good at operating data centres, but we are not water treatment or wastewater treatment operators," he explained.

Infrastructure partnerships become critical

Veolia is already working with some of the most recognisable names in technology, including Google, AWS, TSMC, Samsung, Intel and Micron, across more than 100 facilities globally. For construction firms, this could signal a shift towards more collaborative project delivery models.

"We have got the experience of not only developing new technologies but also that 'deployment magic'. That's often where projects fall down, and dreams fall apart," Richard explained.

"Our mantra is to get the solution on the ground, running quicker, on time and affordably."

Estelle Brachlianoff, Veolia's CEO, emphasised the broader context driving these changes.

"Water has erupted as a centre of conflict in the Middle East, important as oil, if not more," she said at the event.

Water scarcity is becoming a more realistic prospect each year, with its effects already visible around the world.

As regulatory pressure intensifies and resource constraints tighten, construction companies working in the data centre sector could need to fundamentally rethink their approach to building design and delivery. The integration of specialised water, waste and energy systems is no longer optional but essential to securing permits and completing projects on schedule.