5 November 2026
Has the traditional sequence of data centre development broken down?
Historically, a real estate operator would secure a site, build a concrete shell, and request a grid connection from the local utility – but with power grids across Europe operating near physical capacity, has the queue for connection become the primary bottleneck for the technology sector’s expansion plans?
The entry of London headquartered Downing Renewable Developments (DRD) into the data centre sector with an initial 500MW pipeline of “powered land” projects across central Sweden and southern Finland, highlights a pragmatic commercial shift; Instead of waiting for data centre operators to purchase their electricity, power generation firms are bypassing the traditional real estate supply chain and buying the land themselves, matching it directly to their own power assets, and selling the pre-packaged capacity directly to technology tenants.
The limits of a PPA
Operators traditionally solved sustainability mandates through virtual Power Purchase Agreements (PPAs) allowing them to buy green electricity on paper from a wind farm in one region while drawing physical power from a fossil fueled municipal grid in another.
As AI workloads escalate power requirements, these spreadsheet transactions are failing to mitigate physical network congestion. Tier one European markets face severe grid delays and local regulatory resistance due to the strain on domestic infrastructure and a virtual PPA cannot keep a facility running if the local substation cannot handle the physical load.
By leveraging its 9.4GW regional portfolio of wind, solar, and battery storage, Downing is exploiting an asset class that traditional commercial property developers lack: direct grid priority. With 1,981MW of generation projects currently moving through planning systems, Downing is not acting as a sub-contracted utility. It is utilising its energy portfolio to underwrite and control the underlying land, aiming to deliver operational sites to operators by Q4 2027.
The Harlow template
This approach was trialled through Downing’s partnership with Kao Data in the UK. In Harlow, Essex, the companies managed to bypass the local distribution grid by linking Kao’s high-density data campus directly to Downing’s 40MW Green Data Solar Farm via a physical “private wire” connection. The layout removed the project from the local utility’s waiting list:
The commercial logic of the Harlow project is what Downing is now scaling across the Nordic region. By securing building permits for developments like the 120MWp Relletinsuo solar and battery site in Finland, Downing can offer hyperscalers land that has already cleared the most volatile part of the development cycle: power provisioning and local permitting.
A shift in asset ownership
The broader implication for the market is a redistribution of leverage within digital real estate – perhaps real estate expertise is no longer the primary scarcity; grid allocation is.
As a result, the financial returns in AI infrastructure development are shifting toward the firms that control power generation at the source – For tech firms rushing to secure capacity for AI training, the identity of the landlord matters less than whether the site has a credible path to power – by bundling land and electricity into a single offering, renewable energy developers are stepping in to fill a structural gap left by overloaded utilities.
