Unlocking the Future: The Construction Industry's Role in Powering Data Centres

📅 2 weeks ago

The construction sector is poised to benefit from significant investments in data centre infrastructure, with a focus on behind-the-meter power generation solutions to meet the growing demands of AI and connectivity.

The ongoing modernization and expansion of digital infrastructure present substantial opportunities for the construction industry, with McKinsey estimating this investment could reach approximately $19 trillion by 2040. A significant portion of these funds is earmarked for the construction of data centres. However, it is crucial to note that the actual construction of these facilities constitutes only about 25 percent of the total investment figures often reported. The remaining 75 percent pertains to the advanced technology that these centres will house.
The rapid growth of artificial intelligence (AI) is leading to increased demand for robust connectivity options, including fibre optics, satellites, and cables, which necessitates considerable investments in power generation and distribution systems. This aspect represents a long-term opportunity for the construction sector that often goes unnoticed. George Sakellaris, founder and CEO of Ameresco, an energy infrastructure solutions provider, emphasizes the need to focus on the essential physical infrastructure that supports AI operations. He states, "We can build the world’s best models, write the world’s best code and design the world’s fastest chips. But none of it matters if we cannot power the data centres."
As AI technology evolves, it is becoming increasingly electricity-intensive, and Sakellaris points out that the existing power grid is based on outdated assumptions. To meet the surging demand for electricity, there is an urgent requirement for an upgraded energy infrastructure, modernized grids, and enhanced power generation and storage solutions. Particularly in North America, the expansion of power generation facilities to support the new wave of hyperscale data centres is becoming critical. Traditional timelines for grid expansions in the United States, which require new high-voltage interconnection approvals, can take anywhere from five to 15 years.
In response to these lengthy timelines, many hyperscale developers are opting for a proactive approach by investing in "behind-the-meter" power generation. This method refers to the electricity generated on or near a data centre site that is consumed directly by that facility, effectively circumventing the public utility grid and associated delays. US Power & Environment (USP&E), an international power generation designer, builder, and operator, explains that this strategy eliminates reliance on the grid, avoids utility interconnection delays, and grants operators direct control over their fuel supply and generation costs. It also ensures continuous operation of facilities, even amid public grid outages or curtailments.
Elon Musk's xAI data centre, known as Colossus, exemplifies this approach, having completed its behind-the-meter natural gas power generation in just 122 days, underscoring the need for speed in AI infrastructure development. This strategy has gained traction among hyperscalers, bitcoin mining operations, and AI infrastructure developers who require reliable power that exceeds what utilities can guarantee.
The capital costs for constructing power generation facilities vary significantly based on technology. For instance, the most economical option is simple cycle/reciprocated natural gas generation, with costs estimated between $1,200 and $1,500 per kW. Consequently, a 100 MW data facility would require an investment of $120 to $150 million, while a 1 GW data centre could demand between $1.2 and $1.5 billion. Although there are concerns regarding the environmental impact of natural gas generation, USP&E asserts that natural gas is currently favored for behind-the-meter power generation due to its high power density, lower emissions compared to diesel or heavy fuel oil, and compatibility with hybrid systems that include solar photovoltaic and battery storage.
The lead time for fast-tracking gas turbine power plant installations for AI data centres typically ranges from 12 to 24 months, depending on whether new or verified surplus equipment is utilized. In some cases, the completion of power generation facilities can occur even faster. The natural gas generators for Musk's Colossus data centre were operational in just over four months.
As construction professionals begin to grasp the infrastructure opportunities presented by behind-the-meter power generation, the market for this segment is expected to grow significantly. The Behind-the-Meter (BTM) market was valued at $105 billion in 2025 and is projected to reach $520 billion by 2035, with a compound annual growth rate (CAGR) of 18 percent from 2026 to 2035. For developers and investors, understanding the power requirements of AI data centres has become a critical planning consideration in the energy sector.
Canada is also expected to see a rapid increase in electrical generation demands. However, Natural Resources Canada remains focused on traditional grid expansion strategies. The agency highlights that Canada has a competitive advantage due to its reliable, low-cost, low-emission electricity system, which ranks among the most affordable globally. This robust foundation, established over decades through collaboration among provinces, utilities, generators, system operators, and ratepayers, must be preserved and strengthened to meet rising demand and the complexities of a changing global environment. Although the pace of behind-the-meter power generation may lag behind that of the United States, it still presents a significant opportunity for the construction industry.

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