Data Centers Target Northern Nevada, but Power Shortages Stall Growth

Written by:

Steve Marcinuk

Date:

22 Dec 2025

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Northern Nevada has nearly all the elements needed to become a significant data center hub, according to Ted Stoever, Executive Vice President at Colliers. The region’s central location in the western United States offers distribution advantages and has drawn intense interest from data center operators. However, despite these favorable conditions, Stoever says a single issue overshadows all others: limited electrical power.

“Data centers are looking at this place like crazy right now, only limited by the amount of power,” Stoever says. He explains that the primary barrier to growth is not a lack of land or insufficient demand, but a hard ceiling on available electrical capacity. This bottleneck prevents Northern Nevada from leveraging its geographic and logistical strengths.

A National Problem Felt Locally

Stoever places Northern Nevada’s power shortage in a national context. “Like a lot of the country, there’s just not enough power to go around,” he says. Across the United States, as data centers have become more energy-intensive, operators have increasingly run into electrical capacity constraints. Competition for available power has intensified, and infrastructure in many regions has not kept pace with rising demand.

For Northern Nevada, which aims to position itself as a less crowded alternative to California and other western data center markets, this power shortage is particularly acute. The Reno industrial center, Stoever notes, has seen strong absorption, with “the majority of it sold out.” Interest from data center operators remains high. “Data is very, very attractive in that center,” he says. “But the problem is the limitation of power.”

This creates a market where demand exceeds what the infrastructure can support. While land shortages can be addressed through development and labor shortages through hiring, power availability depends on utility infrastructure and capacity planning—processes that require years to execute.

Why Power Infrastructure Lags Behind

The slow pace of power infrastructure development is central to Northern Nevada’s predicament. Expanding electrical capacity requires significant capital investment, coordination with utilities, and regulatory approvals, all of which can take years. This slow timeline means the region cannot respond quickly to surging data center demand, even as it possesses the land, location, and community infrastructure to support growth.

For developers and institutional investors, Stoever’s comments make clear that power availability is the deciding factor for new data center projects. Without expanded electrical capacity, Northern Nevada can secure only a fraction of the potential investment and job creation that such projects would bring.

Stoever emphasizes that this is a physical infrastructure problem, not a market failure. Market challenges can often be addressed through pricing, capital, or regulatory changes. Infrastructure limitations, by contrast, require construction and utility upgrades that cannot be rushed beyond certain limits.

Wider Effects on the Regional Economy

The power shortage affecting data centers has broader implications for Northern Nevada’s growth. The region has added about 110,000 residents over the past decade, a 20 percent increase in a metro area of roughly 600,000. This population growth is increasing demand for electricity across residential, commercial, and industrial sectors—not just for data centers.

Stoever notes that the region’s central location also makes it attractive for distribution and logistics operations. However, if power shortages are already limiting data center projects, they may soon constrain other industries with high electrical needs.

The region’s development trajectory now depends on whether utility capacity expansion can keep pace with rising demand. “We have Lake Tahoe. We’ve got the desert on the other side. We have the Truckee River,” Stoever says. “As a place to live, the place is fantastic. So we have everything that people want.” But without addressing power constraints, the full economic potential may not be realized.

Adapting to Constraints: A Targeted Approach

In response to these challenges, Colliers is focusing on projects that can proceed within existing power limitations. “I only focus on things that I know I can get done,” Stoever says, describing a strategy of targeting opportunities with secured power allocations or lower energy requirements.

This pragmatic approach allows some development activity to continue even as the broader data center opportunity remains out of reach. By concentrating on feasible projects, brokers and developers can maintain momentum until utility upgrades are completed.

Looking Ahead

Whether Northern Nevada’s power infrastructure will expand quickly enough to enable large-scale data center development remains uncertain. Until significant utility upgrades are completed, the region’s ambitions in the sector will remain constrained by electrical capacity rather than a lack of interest or investment.

Northern Nevada’s situation highlights a growing national challenge: as data centers and other power-intensive industries proliferate, many regions face infrastructure bottlenecks that outpace traditional market solutions. For now, the region’s growth will be determined not by available land or demand, but by the pace at which utilities can deliver new capacity.