The digital revolution and the rise of artificial intelligence (AI) are driving a growing demand for data centers in Europe, with significant implications for the energy market. The region anticipates that the demand for data centers will reach approximately 35 gigawatts (GW) by 2030, a notable increase from the current 10 GW. To meet this need, investments of between 250,000 and 300,000 billion dollars in data center infrastructure will be required, not including power generation capacity.
This expansion has a direct impact on European electricity consumption. Currently, data centers consume around 62 terawatt-hours (TWh) annually, and this figure is expected to triple, reaching over 150 TWh by the end of the decade, equivalent to 5% of total electricity consumption in Europe. This increase, driven by digital transition and AI adoption, necessitates sustainable solutions and poses a number of challenges in the European energy sector.
The accelerated growth of data centers is putting pressure on European energy operators to find clean and reliable sources of electricity. In markets like Dublin and Frankfurt, the time needed to supply power to new data center facilities can exceed five years. The issue is exacerbated by a shortage of transmission infrastructure and electrical equipment, as well as a lack of skilled labor. By 2030, data centers are expected to account for between 15% and 25% of all new energy demand in Europe, in a context where net-zero emissions commitments require that this growth be predominantly supported by renewable energy sources.
With the energy transition underway, the European Commission has implemented regulations to assess the sustainability of data centers. From 2024, operators will be required to report their key performance indicators (KPIs) to a European database. These regulations are intended to promote balanced growth that respects the region’s climate goals, while data centers, especially larger-scale ones (hyperscalers), begin to sign power purchase agreements (PPAs) to ensure access to low-carbon energy sources.
Given that data centers require continuous and uninterrupted power supply, their high energy demand is prompting some operators to implement on-site generation and energy storage systems using batteries. This strategy not only helps mitigate the risks of supply fluctuations but also relieves some of the pressure on the grid.
Green energy solutions currently being explored include combined cycle gas turbines and battery storage, along with firm energies like hydroelectric and thermal capacities with carbon capture and storage. Some operators have also turned to renewable energy certificates (RECs) and other emission offsetting instruments to balance their carbon footprint, although experts argue that these mechanisms are only effective when linked to additional generation projects.
Location selection is also considered crucial for sustainability. In areas with a high proportion of clean energy in the grid and favorable climatic conditions, the need for energy consumption for cooling is significantly reduced, which could decrease the dependence on additional energy sources.
The growth of data centers in Europe could be a catalyst for investments in energy infrastructure, closing the funding gap that has historically hindered network development. To achieve this, it is essential to strengthen the connections between energy generation and distribution, as outlined in the European Union Network Action Plan, which will enable greater efficiency in electricity supply and improve the connection between European industries, transportation, and households.
Europe is thus faced with the challenge of adapting its networks to integrate more renewable energy reliably, requiring both dispatchable sources and increased transmission capacity. Collaboration between data center operators and energy providers will be key to addressing this transition and promoting an infrastructure model that supports sustainable digitalization and European competitiveness in the era of artificial intelligence.