Developers across North America are running into a power wall in established data center hubs, stretching project timelines and pushing site searches into regions that historically sat outside the sector’s core markets. JLL’s Midyear North America Data Center Report, discussed with Connect CRE by JLL vice president of data center strategy Sean Farney, links this shift directly to grid limitations and interconnection delays in traditional locations.
Farney noted that the core challenge is securing enough electricity to launch new facilities. To work around grid constraints and accelerate schedules, developers are testing alternative power solutions. Utilities are increasingly steering projects toward co-located generation and on-site battery storage, while microgrids are being evaluated as another path to relieve pressure on the broader grid, even as those microgrid strategies remain under regulatory scrutiny.
Direct collaboration with utilities is becoming more common, but long interconnection queues still slow delivery. In the Chicago area, Farney cited new Commonwealth Edison projects facing four- to five-year delivery timelines and letter-of-credit requirements of roughly $46,000 per megawatt annually for a decade. He added that grid constraints around Columbus, OH are already diverting users to secondary locations that have available capacity.
The JLL report describes these secondary regions as “frontier markets” and estimates that 77% of under-construction capacity is now located in such areas. According to Farney, these markets typically offer greater power availability, more permissive regulatory environments, ample land for large campuses, lower operating costs and room to expand over time. He pointed to overflow from Columbus into Ohio cities including Van Wert, Lima and Canton, and said that Southern Virginia and the I-95 corridor are capturing projects that might otherwise have concentrated in nearby Loudoun and Prince William counties.
Farney characterized this spillover as more than a short-term response, arguing that the scale of investment and structural advantages in frontier markets signal a lasting geographic realignment for the data center industry. He also emphasized the potential economic impact for these communities, with large-scale projects capable of supporting high-paying construction, engineering and IT roles. In some states, such as New York, he said developments can generate an estimated $100 million to $200 million in combined local and state tax revenue.
However, Farney acknowledged that community resistance and misperceptions continue to complicate new proposals. JLL has seen a sharp increase in organized opposition and scrutiny over the past six months, even as a survey cited in the report found that 79% of respondents support U.S. leadership in artificial intelligence, while only 14% back data center development in their own neighborhoods. In response, some developers are ramping up transparency, working directly with local leaders and residents to address environmental and other concerns.
Looking ahead, the report concludes that data creation and storage will keep growing as digital tools permeate daily life, suggesting that supply is unlikely to overtake demand. Farney argued that society’s reliance on data centers for media, financial transactions, personal storage and critical communications underscores the need for additional capacity, particularly in frontier markets that can accommodate power-hungry campuses.
