Midterm Elections Impacting Datacenter Development in 2028
The upcoming midterm elections are poised to influence datacenter construction policies, particularly for 2028, as both major parties advocate for stricter regulations amid a growing backlash against datacenters.
The construction of datacenters is progressing rapidly, with approximately 75% of the 33.8 GW planned for 2027 already underway. However, the outlook for 2028 is uncertain due to a prolonged permitting freeze in Texas, which poses significant risks to the U.S. buildout. The 2028 pipeline, projected at 62.2 GW, largely depends on states electing governors on November 3, with ten of the thirteen states expected to contribute 70% of the national capacity.
Recent developments have heightened concerns, particularly after Texas froze permits from the Texas Commission on Environmental Quality (TCEQ) and Oregon expanded its permit restrictions. Candidates in the midterm elections are increasingly campaigning on platforms that include stricter conditions for datacenter construction, with a notable split in positions across party lines. Nine candidates advocate for a pause on new construction, while eleven support conditional approvals.
The potential for a prolonged permitting freeze in Texas is the primary concern, as the state contributes nearly 30% of the expected capacity for 2028. Governor Greg Abbott may resume permitting after audits are completed, but his opponent, Gina Hinojosa, proposes a moratorium until new legislation is enacted to address community concerns and utility costs.
The political landscape is shifting, with bipartisan support for making datacenters financially responsible for their infrastructure impacts. Candidates are pushing for measures such as ending tax breaks and limiting water usage, reflecting growing public anxiety over the implications of datacenter expansion. Local authorities play a crucial role in determining the pace and location of new datacenter projects, with state elections potentially reshaping policies that govern these developments.
As the elections approach, the extent to which candidates' promises translate into policy changes will significantly influence the timeline and feasibility of datacenter projects across the country.