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On-Site Microgrid Power: Primary Consideration for DC Developers

Topic

expertise innovation

Date

12 February 2026

Author

AVK

Read Time

9 min

2026 is the year of dispatchable, grid free, on-site power for data centres, for inference AI and for energy security. On-site microgrid power is becoming the primary consideration for base load and grid interaction, for European data centre developers.

As data centre facilities grow in scale and complexity, the shortfalls of traditional power provision are being laid bare.

The problem statements around grid constraints, decade long upgrade timeframes for Transmission System Operators (TSOs), and Distribution System Operators (DSOs) operated ageing infrastructure amid a scramble for developers to secure power, are being openly discussed at every data centre finance and industry event.

This marks a major shift for the data centre sector. Firstly through acceptance of the scale of the problem, and secondly through a recognition that grid free, on-site power generation is not just viable, but desirable.

Industry forecasts for 2026

Published at the beginning of the year from respected data centre practices within the commercial property giants including JLL and CBRE. These contain multiple references to funding self-generation and private wire contracts to circumvent grid delays.

The opening line of JLL’s Global Data Center Outlook 2026 sets the scene: “The global data centre sector is poised for continued unprecedented expansion, with capacity expected to nearly double from 103 GW to 200 GW by 2030.”

In a section on power, it makes a number of points:

Grid delays push data centres toward self-generation, PPAs and private wire contracts to expedite projects.
Due to utility interconnection delays, some data centre operators are moving beyond power purchase agreements (PPAs) to directly fund their own energy generation.
Additionally, a number of markets have implemented de facto ‘bring your own power’ mandates (Dublin, Texas, et al.), which is fuelling this trend.
Behind-the-meter generation and battery storage gain momentum in data centre energy strategies.
Data centre operators are expected to increase behind-the-meter power arrangements and explore colocated battery storage as the average wait time for a grid connection in primary data centre markets exceeds four years (in the US – in some European markets the wait time can run to more than a decade).
In EMEA, projects combining renewables and private wire transmission can reduce the cost of power for tenants by 40% compared to the grid.

Trends to watch

In the data centre section of its 2026 Real Estate Outlook, CBRE detailed trends to watch. These include:

The constraints of power availability, coupled with lengthy lead times for grid connections, are causing operators to explore on-site electricity generation as a practical alternative to reliance on the grid.

Initially conceived as a transitional measure, some operators are now planning for long-term deployment. Despite certain disadvantages, such as more complex ability reporting and elevated costs when compared to the grid, we anticipate further proliferation of this technology, driven by growing tenant acceptance.

(Tenant acceptance is important as it points to that shift in opinion from AI, cloud, and enterprise data centre customers whose workloads are ultimately being powered – and who, when it comes to uptime, combine extreme cost consciousness with fundamental adversity to risk.)

What’s happening in Europe…

In Europe, securing powered land is now a major issue in the FLAPD markets. ‘It is becoming increasingly difficult to find powered land and we are looking at new markets and self-generation,’ said an EMEA VP of site acquisition at one global developer. ‘Five years ago there was no notion of on-site generation being acceptable and now that is changing.’

When assessing access to power and license to operate, developers seeking to grow in Tier 1 markets are being asked to compromise in a combination of ways.

In order to find capacity, they are being asked by TSOs to move further and further from the target market locations. In some cases that means considering moving beyond borders into secondary markets. This is prompting serious consideration of on-site power.

What this change indicates is a move by developers and the investment value chain away from viewing grid free, on-site power as a conceptual solution to a distant problem to weighing the advantages of different generator, fuel, stabilisation and storage technologies.

This is happening alongside the considerations of speed of deployment, long term operation, serviceability, costs, and sustainability but also the ownership and operation options.

The 2026 Data Centre Predictions from the Uptime Institute included the following:

On site power means concurrent maintainability will be critical

Scale adds new challenges, but resiliency will still be essential

45% of incidents or outages are power related

Where AVK is unique in the market

AVK’s microgrid model choices for Client-owned and AVK-owned microgrid options.

Client-Owned Model 1: Off-grid energy centre

This model is designed for data centres where no grid power is available, or its delivery is delayed. This solution is entirely independent of the utility grid and ensures uninterrupted power supply through a self-sustaining energy infrastructure.
Client-Owned Model 2: Limited utility energy centre

In this model, partial grid power is available to the data centre. The client-owned and operated energy centre complements the grid supply by providing additional power capacity as needed. 
Client-Owned Model 3: Dynamic tariff energy centre

This model integrates a grid-connected energy centre with a dynamic energy tariff selection. The client-owned energy centre operates flexibly, using grid power during low-tariff periods and switching to self-generated power when grid tariffs are high. 
Client-Owned Model 4: Dynamic tariff energy centre, with carbon capture

Building upon ‘dynamic tariff’, this option includes a carbon reduction component. In addition to optimising energy costs through dynamic tariff selection, the energy centre incorporates carbon capture technology to reduce emissions from its exhaust.
AVK-Owned Model 1: Off-grid energy centre

Fully-owned and operated by AVK and potential investors, this model provides a complete off-grid energy solution, ensuring reliability while managing all operational aspects of the energy supply on behalf of the client.

For more details on advantages, including graphics, for each of the above models see AVK Innovative Microgrid Technology.

World Economic Forum

It would be wrong to think that data centres operating off grid and on site power is simply a topic for the data centre sector. Beyond the immediacy of the industry perhaps what is less obvious is the extent to which the alternative power discussions are happening at the highest levels.

Governments and financiers now fully invested in discussing how access to secure, clean power is shaping the economic / data centre / power sector engagement narrative of how on site dispatchable power is key to AI driven economic value at every level.

In late January 2026 this was discussed at the World Economic Forum, in Davos.

A panel titled Racing for Compute and its End Game explored the challenges of delivering true economic value of AI by exploring the state of grids, the capital environment and the innovative technologies and business models that are reshaping digital and power.

It featured Rene Haas (CEO, ARM), Joshua Payne (Founder, Nscale), Vijay Vythianathan Vaitheeswaran (The Economist), Ebba Busch (Deputy PM and Minister for Energy of Sweden), Olivier Blum (CEO, Schneider Electric), KR Sridhar (CEO, Bloom Energy), highlighting just how big a subject power provision for data centres has become.

When it came to the question of meeting the challenges of sourcing the power for the AI infrastructure builds out without straining grids and alienating the public (social license to operate) the panellists were direct about meeting the demand challenges and in agreement about the solution.

Ebba Busch Deputy PM and minister for energy of Sweden, [not a country traditionally linked to grid constraint and power supply issues], addressed the issue of speed to power saying: “We are accelerating the permitting waiting times, but it is not enough. Our bureaucracy is holding us back. We need dispatchable power when and where it is needed. We need that baseload – at the end of the day dispatchable power is what matters. AI is going to bring many disparate sources together.”

KR Sridhar, CEO, Bloom Energy, addressed the changing nature of the AI value proposition and the implications for data centre power demand.

He said: “If you think training AI in data centres looks like it is using large amounts of power wait till you see how much inference is going to consume. We’re sitting in an urban area where it (AI inferencing) will use 10 MW+ of power – that is 10,000 European homes worth of power – and it needs to come from here (locally) because of latency. It needs to be very close to certain end users for many applications that are the most lucrative.

To make it work, [from a power perspective’] you can’t even solve the transmission problem, how are you going to solve the distribute problem in the last mile?

So, the only way the world is going to realise the impetus of AI which really benefits us in so many ways is going to be distributed power.”

Related articles for your reference: Episode 1 and Episode 2 of our AI Edge series.

“With grid constraints, onsite power is increasingly entrenched in data centre power strategies. Over the past six months, the share of Hyperscalers and colocation providers expecting to operate fully onsite-powered campuses by 2030 has increased by 22%, reaching roughly one-third of data centres, as developers increasingly expect permanent onsite generation to emerge as a preferred long-term approach.”

Bloom Energy, Data Centre Power Report January 2026

Working at true AI training and inference scale, AVK’s decades of experience, technology, and design expertise covers the complete grid integrated or grid free project journey for microgrid on-site power generation.

Working with world class power generation partners such as Rolls Royce and Wärtsilä combined with independence of thought and the use of best in class technologies, AVK’s brand agnostic approach delivers long term energy solutions to match hyperscale, colocation and enterprise customer independent power provision objectives resulting in measurable advantages for data centre new build and upgrade projects.