People, Power and Water are Defining Digital Infrastructure Operational Risks

People, Power and Water are Defining Digital Infrastructure Operational Risks
July 27, 2026 16 mins

People, Power and Water are Defining Digital Infrastructure Operational Risks

People, Power and Water are Defining Digital Infrastructure Operational Risks

As data centers scale into critical infrastructure, the constraints determining success are changing. Power, water and workforce availability are strategic design decisions that shape bankability, insurability and resilience long before a facility becomes operational.

Key Takeaways
  1. As data center growth accelerates, power, water, community and people risks are becoming the main constraints on expansion.
  2. These risks are interconnected. As energy and cooling systems become more complex, experienced talent determines whether power and water strategies can be executed at all.
  3. Operators that understand how these risks interact and evolve will be better placed to secure capacity, maintain uptime and protect long-term value.

Table of Contents

  1. Introduction

  2. Where Constraints Show Up Across the Lifecycle

  3. Power Availability Now Shapes Site Selection and Timelines

  4. Transition is Where Constraints Become Reality

  5. Cyber Risk is Now Part of the Concern

  6. Water Emerges as an Operating Constraint

  7. People are the Constraint in Managing Power and Water Risk

  8. Planning for the Next Risk Profile

Global data center demand continues to rise, driven by artificial intelligence (AI), cloud adoption and broader digital infrastructure growth. As a result, capital is consistently flowing into digital infrastructure projects, and will potentially reach as high as $10 trillion by 2030.

Delivery is an issue. In many markets, the ability to build and operate at scale is now constrained by power availability, water access and skilled labor. This reflects a broader shift in how risk is managed across digital infrastructure, with increased interconnection between design, capital and resilience. 

Operators must therefore adjust their approach to planning for growth. Power, water and workforce challenges are not downstream operational problems. They are design decisions that shape whether infrastructure can be planned, financed, built and operated with confidence. For owners and operators, the question is no longer only whether capacity can be delivered, but whether it has been designed to remain bankable, insurable and resilient when constraints intensify.

Where Constraints Show Up Across the Lifecycle

Phase Constraint
Design Power availability, water access, cooling architecture and site viability
Build Workforce availability, supply chain pressure and construction sequencing
Transition Energization, commissioning, workforce readiness, O&M responsibility and SLA exposure
Operate Workforce capability, resilience, uptime, cyber exposure, recovery and long-term performance
Exit Decommissioning, technology and infrastructure obsolescence, environmental liabilities and asset management/valuation

Power Availability Now Shapes Site Selection and Timelines 

Grid access and interconnection timelines, often measured in years, are now critical pathways. As electricity demand rises to support AI and digital infrastructure, limited grid capacity and long equipment lead times are delaying deployment in key markets.

  • 165%

    Projected growth in global data center power demand by 2030

    Source: Securing Power: Global Strategies for Data Center Energy Resilience, Aon

  • ~11%

    Projected percentage of U.S. power demand used by data centers by 2030

    Source: McKinsey

Power deliverability increasingly determines where data centers can be built, how quickly capacity can be brought online and which markets remain viable.

Power access is the primary near-term constraint on expansion. Alternative resilience strategies can reduce grid reliance, but they also introduce new operational complexity and risks. 

“What happens when there is a power outage? Will data centers still have access to the grid or have adequate back-up sources to cover any shortfall?” questions Mark Potter, Aon’s Natural Resources Industry Leader, United Kingdom. “If developers accelerate plans using behind-the-meter solutions, understanding at what point grid access will potentially become available within their project plan is key.”

4 Strategic Power Priorities for Developers and Investors
  • 1. Securing Capacity Requires New Commercial and Financial Structures

    As grid constraints intensify, operators are not only competing for physical capacity, but also for the ability to secure and finance it. In many markets, utilities are introducing stricter requirements to reserve large power loads, including enhanced credit support and long-term commitments.  

    This is driving a shift toward more structured approaches to power access, where early-stage agreements, phased energization strategies and alternative financing mechanisms are used to unlock capacity. In practice, this means power procurement is becoming a coordinated exercise across development, financing and risk transfer — rather than a downstream operational decision.

  • 2. Commercial Commitments Create New Power Risk Exposures

    Long-term interconnection agreements and PPAs are becoming essential to secure capacity, but they also introduce binding performance and credit obligations. Take-or-pay structures, delivery delays and counterparty risk can create exposure when power is unavailable, misaligned with commissioning or underperforms expectations.

    These risks can affect cash flow certainty, project timelines and delivery confidence if not managed early. Power strategy now depends on how interconnection agreements, PPAs, credit support, and operations and maintenance (O&M) arrangements are structured, aligned and insured. These commercial terms are becoming part of the risk strategy itself, because they determine who carries delay, performance and recovery exposure when power is unavailable or underperforms.

  • 3. Renewables Continue to be Significant Power Contributors

    Renewable energy adoption continues to accelerate, driven by regulatory mandates and increasing public scrutiny of data center impact on power systems. 

    Public skepticism toward data centers is driven largely by concerns over rising household energy costs. Nearly 40% of Americans believe data centers have a mostly negative impact on their home energy bills, while only 6% view them positively.1 As a result, data center operators are increasingly turning to renewables as a power source.

    In 2025, more than 60% of new hyperscale data centers in the U.S. and the EU committed to sourcing at least half of their power from renewables.2

    “Public opinion right now is not pro data center because of concerns that they will drive up power costs,” says Carol Stark, Aon's Renewable Energy Leader, North America. “Therefore, operators are building in locations with access to natural gas while also increasing the use of wind, solar and battery storage to moderate grid demand and improve self-sufficiency.”

     
  • 4. Hybrid and Behind-the-Meter Power are Changing the Operating Model

    Hybrid and behind-the-meter power are becoming a practical response to grid constraints, offering faster deployment and greater optionality. The trade-off is a more complex operating model in which storage, generation, controls and switching infrastructure must perform together under stress.

Quote icon

Power, cooling and control systems are increasingly interdependent, creating pathways for rapid fault propagation. Critical risks include coolant distribution failure, electrical instability within inverter-based systems, shared infrastructure faults, battery thermal events and control system errors.

Sam Beaver
Power Leader, Global Broking Center
Impact of Varied Power Risks on Operations 

As behind-the-meter generation, batteries and hybrid microgrids create a more complex failure environment, new failure modes and maintenance risks emerge. 

Maintenance outages also raise new continuity questions:

  • Is battery duration sufficient to maintain operations during extended disruption?
  • When and how does grid reliance return?
  • How are uptime guarantees, SLAs and recovery obligations affected?

As operators move faster to secure power, they are relying more on third parties for generation, renewable assets, and long-term O&M. This does not reduce the owner’s exposure, but shifts where risk sits, how it is triggered and how quickly losses can be recovered. 

Three questions define the liability challenge:

  1. Who owns decisions in abnormal conditions? During transfer events, restarts, fuel interruptions or control anomalies, authority can blur across the owner, operator, OEM and O&M provider. That is often where delay and loss escalate.
  2. Who absorbs the cost when performance falls short? When third parties operate generation or storage, owners may still carry the immediate impact of uptime credits, business interruption and delay losses, even if liability can later be recovered.
  3. Do insurance structures reflect how the system actually operates? As the power model changes, insurance must keep pace. Fragmented cover across owners, operators and specialist providers does not ensure clean recovery if triggers, exclusions or delay exposures are not aligned to the operating model.
Quote icon

Developers and owners are starting to think of a power-first strategy when investing in data centers. They will consider power delivery long before building.

Vincent Banton
Head of Construction & Infrastructure, Asia Pacific

Transition is Where Constraints Become Reality

The pressure points in power, water and workforce planning often become most visible during transition. This is the period when projects move from construction to operation, systems are energized, commissioning is under way and responsibility begins to shift across owners, operators, utilities, OEMs and O&M providers.

For data center operators, transition is where assumptions are tested. Grid connection timing, phased energization, cooling performance, contractor availability and SLA exposure all converge at the point when tolerance for failure is lowest. If ownership, escalation rights and recovery pathways are unclear, a relatively contained issue can quickly become a delivery, continuity or financial event.

Aon’s Reliable by Design framework means treating transition as a risk phase in its own right. That requires earlier alignment between commissioning plans, contractual obligations, O&M responsibilities, insurance structures and recovery expectations.

Cyber Risk is Now Part of the Concern

Power resilience today also depends on whether control systems, substations, transformers and site energy assets remain available and trustworthy during cyber or physical disruption.

Cyber risk in data center construction and operations is now a strategic business issue, not a narrow technical concern, especially where multiple contractors, third parties and digital tools expand the attack surface. Large-scale systemic cyber events, third-party dependencies and uneven controls maturity are already affecting insurability and resilience.

For operators using onsite generation, batteries, controls and third-party O&M, cyber and physical security must be integrated into power risk planning, with a clear focus on system availability and third-party exposure.

Meanwhile, a new dimension is emerging in the form of geopolitical competition for compute capacity, as localized infrastructure and supply chains introduce new considerations around data sovereignty, control and cross-border security.

Water Emerges as an Operating Constraint

Water is moving from a sustainability consideration to a core operating constraint. As rack densities increase and cooling demand rises, water availability is influencing where data centers can be built and how they operate. 

Water risk now affects siting, insurability, project schedules and long-term resilience. Global data center water use is estimated at 560 billion liters per year and could reach 1.2 trillion liters by 2030. A typical facility may use around 300,000 gallons a day and large sites up to 5 million gallons — equivalent to the needs of a town of up to 50,000 people.3

Water used for cooling could rise by 870% in fast-growth markets. This underscores that the real issue is not only annual use, but cumulative local stress and peak demand. Cooling choices also shape power demand, making water and energy strategy increasingly inseparable.4

For operators, this requires earlier and more deliberate planning. Cooling architecture must align with local hydrology and power availability, while exposure to stressed basins should be reduced where possible. Clear disclosure and credible water stewardship are also becoming important for permitting, investor confidence and community engagement.

“Operators are now focused on recycling and reducing water use, particularly in regions where supply is constrained,” says Stark. “These efforts are becoming part of how they maintain trust with regulators and local communities.”

People are the Constraint in Managing Power and Water Risk 

People are emerging as the constraint that underpins power and water risk. Today, over half of data center operators (58%) say they struggle to attract and retain qualified staff.5 An aging workforce, weak career pipelines and high mobility between competitors compound this risk, forcing operators to source scarce skills at speed. The leadership challenge compounds it further: As the sector converges, leaders are managing teams and skills they have never managed before. 

From an operational perspective, this translates into:

  • Higher probability of non catastrophic, but disruptive incidents linked to human error
  • Longer mean time to recovery when experienced staff are unavailable
  • Increased exposure to SLA breaches and reputational loss, even absent major physical damage

As power and cooling systems become more complex, experienced specialists are essential. Workforce gaps limit operators’ ability to execute power and water strategies effectively. In every case, the ability to deliver comes down to whether the right people are in place before the constraint becomes a crisis.

Operators have additional emerging people concerns:

  • Utilities, OEMs and Supply Chains

    Data center workforce risk now extends beyond the operator’s own headcount. It runs through utilities, OEMs, EPC firms, commissioning teams and long-tail suppliers whose labor availability determines whether projects can be connected, energized and handed over on time. 

    Supply chain bottlenecks, speed-to-market pressures and talent shortages can trigger schedule slippage, liquidated damages and SLA penalties if they are not addressed early. On the equipment side, traditional supplier operating models are struggling to match the speed and scale of demand for critical electrical, thermal and mechanical infrastructure.6

    That’s why long lead times increasingly reflect labor constraints and material shortages. Queues for some high-capacity transformers have stretched to four years, with developers facing out-of-sequence construction, higher financing costs and the need to retain skilled labor for longer periods.7

  • O&M Outsourcing Changes the Risk Profile

    As systems become more complex, operators will continue to rely on specialist third parties for operations and maintenance. That can close capability gaps, but it does not remove workforce risk; it redistributes it across contractual and operational interfaces. 

    The heavy reliance on subcontractors, third parties and digital tools increases complexity and the consequences of weak oversight. In operations, that means vendor governance, interface management and assurance over competence and availability during incidents become core resilience disciplines, not administrative tasks.


  • Reframing the People Conversation

    Workforce strategy starts with knowing the market: how skills demands are shifting, how compensation is moving for critical roles and what leadership will be required as the sector converges with power and utilities. Workforce development is becoming part of infrastructure strategy, rather than a cost decision. Data centers often depend on specialized technical and trade skills that are difficult to automate, slow to replace and essential to ensure safe, reliable operations. 

    Business leaders need more connected, forward-looking workforce decisions as people and operational risks become more intertwined. For operators, that means earlier workforce planning, stronger contractor qualification and more deliberate investment in training, retention and supplier resilience as part of the growth model itself.

Planning for the Next Risk Profile

The constraint set is changing faster than traditional assumptions. While efficiency gains are reducing power consumption per unit of compute, overall electricity demand continues to rise as adoption accelerates.8

At the same time, supply constraints are shifting. Growth is increasingly limited by the ability of equipment manufacturers and supply chains to keep pace with changing electrical, thermal and mechanical requirements.9

Efficiency also changes the risk profile. More advanced compute, cooling and power systems can reduce resource intensity, but they often concentrate value density and interdependence inside a smaller footprint. For operators, the practical response is to stress-test recovery, redundancy and risk-transfer assumptions against more concentrated loss scenarios rather than assuming that efficiency automatically reduces exposure.

Why Operators Need Forward-Looking Risk Conversations 

The strongest operators will use forward-looking risk conversations to protect optionality. The point of horizon scanning is not to predict one future with precision, but to test today’s siting, design, O&M and risk transfer choices against multiple plausible futures. For operators, this means assessing siting, design, operating models and risk transfer choices in the context of changing power, water and workforce constraints.

“Board directors need to understand human capital risk with the same rigor they apply to power and water,” says Sharon Egilinsky, Partner, Growth Strategy Leader, Human Capital Digital Infrastructure, United States. “The engineering and construction skills gap is here now. Industry convergence across utilities, power and adjacent businesses is what comes next. These are people issues that require action before they become execution issues.” 

The next phase of growth will favor operators that plan across power, water and people together rather than in sequence. In a more constrained environment, resilience will depend less on demand and more on the ability to deliver, adapt and recover with confidence. 

No single constraint will determine success. Power, water and workforce challenges increasingly interact, creating dependencies that cannot be managed in isolation. Organizations that improve visibility across these interconnections will be better positioned to support delivery timelines, strengthen operational resilience and maintain long-term performance.

If you are ready to evaluate your data center risk program or would like to better understand how to proactively address human capital risk, contact us to start a conversation.

Aon’s Thought Leaders

Vincent Banton 
Head of Construction & Infrastructure, Asia Pacific 

Sam Beaver
Power Leader, Global Broking Center

Brian DeBruin
Managing Director, Natural Resources/Power & Renewables, United States

Sharon Egilinsky
Digital Infrastructure Growth Leader, Human Capital, North America

Brian Hearst
Global Data Center & Life Sciences CAR/Builders Risk Leader

Mark Potter
Natural Resources Industry Leader, United Kingdom

Carol Stark
Managing Director, Renewable Energy Practice Leader, North America

Caroline St. Clair
Data Center Practice Leader, North America

1 How Americans view data centers’ impact in key areas, from the environment jobs, Pew Research Center
2 Energy supply from AI, IEA
3 When AI Meets Water Scarcity: Data Centers in a Thirsty World, MSCI
4 Drained by Data: The Cumulative Impact of Data Centers on Regional Water Stress, Ceres
5 Uptime Institute Global Data Center Survey 2025, Uptime Institute
6 The $7 trillion race for AI data center infrastructure, McKinsey
7 US power transformer buyers scramble for imports, factory slots, Kitco News
8 IEA Activities on Energy and AI, 2025-2026
9 The $7 trillion race for AI data center infrastructure, McKinsey

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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