Overcoming energy constraints is key to delivering on Europe's data centre goals

When a data centre is built, it means adding a large and concentrated source of demand for power. However, while a data centre typically takes one to two years to build, much longer lead times are needed to expand electricity infrastructure. Data centres also tend to cluster close to urban areas, where the local grids are often strained.

Today, most installed data centre capacity is concentrated in a few hubs across Europe: Frankfurt, London, Amsterdam, Paris and Dublin (often referred as FLAP-D). Copenhagen and Milan also play increasingly significant roles. In recent years, Dublin and Amsterdam have had to pause new projects, citing the lack of grid availability and the inability to integrate new large power loads. This highlights the challenge of expanding data centre capacity in the face of energy sector constraints.

The IEA's analysis of project announcements indicates that new data centre hubs in the region are set to emerge in coming years, including in Spain and Finland. However, most announced capacity in Europe is still planned for existing hubs, potentially increasing the pressure on grids there. At the same time, the average project size is growing significantly. For example, in the Netherlands, the average capacity of planned data centre projects is more than three times larger than the average capacity of data centres in operation today. In Spain, planned projects are seven times larger on average.

If the project pipeline for data centres in the region is fully realised, it would represent substantial additional power loads in some cases. In large countries like Germany and France, fully implementing the project pipeline would see the installed capacity of data centres climb to represent around 4-5% of peak electricity demand today. In countries like Spain or the Netherlands, it would rise to around 10%. And in smaller electricity markets, the share of data centres in peak demand would be even larger.