Power-hungry data centers and other risks threaten supply chains’ access to reliable electric energy.

A key challenge for supply chain organizations is to anticipate, prepare for, and mitigate risks to a company’s operations and business continuity. Many organizations focus their attention on “traditional” disruptions like supplier failures, material and inventory shortages, and natural and human-caused disasters. Inadequate electric power may not be high on their priority list—if it is included at all—because this ubiquitous resource is often taken for granted. Such complacency could prove to be a costly mistake.

Uninterrupted electric power is not a given. On a macro scale, potential threats include long-term drought in the Western U.S. that is constraining hydroelectric power generation; opposition to construction of power lines from Canada into the northern U.S.; the Trump Administration’s efforts to dismantle both offshore and land-based wind-power projects; and cyberthreats from foreign powers like China and Russia, which have been probing the U.S. power grid for vulnerabilities.

At the local level, utilities in many areas are struggling to meet demand for the high-capacity electrical service required to support automation in warehouses and manufacturing plants, the electrification of trucks and forklifts, and the e-commerce-fueled construction of new warehouses. One participant in an MIT Center for Transportation & Logistics roundtable said that his company had committed to adopting electric vehicles (EVs) at its distribution centers, but the wait for upgraded lines and service would be at least two to three years.

Recently, a new potential threat to reliable electric service has come on the scene: data centers.

These facilities support internet, software hosting, and data operations. By one count, there were more than 5,000 data centers in the U.S. in early 2025, but that number is already outdated. According to the industrial real estate developer Prologis, the growth of artificial intelligence (AI) and cryptocurrency transactions is the main reason data center development in the U.S. doubled in 2024 compared to the previous year. This pace is expected to accelerate. For example, Amazon and OpenAI both recently announced that they will spend billions of dollars to build more data centers in the U.S. over the next few years—and they are not the only companies doing this.

Potential Competition for Electricity

Data centers require gigawatts of electricity to power computing, servers, network- and data-storage equipment, and cooling systems. The U.S. Dept. of Energy forecasts that by 2030, data centers’ energy consumption could account for up to 12% of all U.S. electricity use. It’s not a stretch to say that data centers could soon be in competition with industrial facilities for energy resources.

This possibility prompts several questions: If a data center is built near an existing factory or DC, will that affect the reliability of electrical service? Who will get priority if resources—whether electricity itself or the ability to upgrade or provide new infrastructure—become limited? Will the advent of data centers constrain siting options for companies that want to expand or build new facilities? These are not theoretical questions, especially in areas where local governments are encouraging construction of data centers. Fairfax and Loudoun counties in Northern Virginia, for instance, have more than 270 operational data centers, with 126 more in development. Some communities in more than a dozen countries outside the U.S. reportedly have experienced power and water disruptions after data centers began operating.

Communicate with the Community

Some companies are starting to recognize that energy reliability is becoming a serious supply chain risk. According to Prologis’ 2026 Supply Chain Outlook Report, nearly 90% of the companies the developer surveyed in 2025 had experienced some kind of energy-related disruption during the past 12 months. About 70% said they worry about power outages more than any other supply chain disruption.

Worrying will only go so far, though. While construction of many more data centers seems inevitable, there are some steps you can take to protect the power needs of your own facilities.

Steps to Take to Protect the Power Needs of Your Facilities

1.  Monitor the News

The first is to monitor local business news and announcements by economic development agencies and state, county, and local governments. This will help you find out about proposed data centers and any related hearings or requests for comment.

2. Review Service Agreements

The second is to review each facility’s service agreement with the local utility so you’re aware of what the contracts do and do not guarantee. Then, proactively reach out to senior decision-makers at the utilities. Ask about their plans for service upgrades and infrastructure improvements, how they prioritize customers, and how they plan to ensure reliable power for existing customers if and when energy-hungry data centers enter the picture.

3. Build Relationships with Stakeholders

And third, develop relationships and work closely with local communities, governments, chambers of commerce, and economic development agencies. Make sure they’re aware of your current and anticipated energy needs, and that you want to collaborate not only for your own benefit but also for the economic good of communities in the area. It wouldn’t hurt to also emphasize your facility’s contributions to the local economy, including tax payments and employment.

We don’t know yet how many data centers will eventually be built, or exactly how they will impact their neighbors. If you want to ensure that your facilities have reliable energy now and, in the future, collaboration and communication with local governments and the communities your company operates in are among the most important steps you can take.

What are your thoughts on this topic?  Join the discussion on LinkedIn.

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This article was originally published on LinkedIn and has been republished with permission.