EY Urges Spain to Soften Data Center Decree Over Electricity Costs

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An EY Energy Consulting analysis dated October 16, 2026 calculates that if the data centers planned for Spain by 2030 had to meet the renewable requirements in the government’s draft data center decree, their power supply cost would reach €133.07 per megawatt-hour (MWh) — 2.4 times the electricity futures price for that year. The consultancy is calling for the rule to be softened and aligned with EU regulations, which impose neither additionality nor hourly matching on this activity. The report is a simulation built on EY’s own assumptions and does not say who commissioned it.

EY’s report on the data center decree in 30 seconds

The draft requires 80% of consumption to come from new renewables, and another 80% matched hour by hour.
For 3.5 GW of data centers, EY calculates a need for 26.8 GW of solar, 8.8 GW of wind, and 14.2 GW of batteries.
That would leave 19,742 GWh of surplus energy and raise the system’s curtailment by 16%.
The consultancy warns of investment fleeing to Portugal and between €118 million and €642 million in regulated costs shifted to other consumers in 2030.

The report lands in the middle of the rule’s legislative process. Spain’s Ministry for Ecological Transition and the Demographic Challenge (MITECO) opened the draft Royal Decree regulating the sustainability, resilience, and digital sovereignty requirements for data centers to public comment on an urgent basis on August 27, later extending the comment period to September 10. Since then, trade associations and operators have asked for changes or outright withdrawal, as Templus did when it called for Spain to withdraw the decree and reopen the dialogue. The text has not been approved yet and can still change.

What the draft requires and how the government justifies it

The draft applies to new grid access requests for facilities with at least 1 MW of grid access capacity or 500 kW of IT capacity. Its energy core rests on two requirements. The first is additionality: 80% of annual consumption must come from new renewables, commissioned no more than 18 months before the facility starts operating, either through self-consumption or power purchase agreements (PPAs) of at least ten years with plants in Spain. The second is hourly matching: 80% of consumption must be covered by renewable output generated in that same hour. Both requirements would apply as long as renewables stay below 90% of the generation mix.

The draft also adds efficiency limits (a PUE, the power efficiency indicator, of 1.15 or lower, and a WUE, the water consumption indicator, of 0.1 or lower), digital sovereignty requirements, and a system of surcharges on grid tolls and charges that, according to EY’s summary, can reach 500% and ultimately lead to the loss of access and connection permits.

The government defends the rule with different figures. According to MITECO, Spain’s Artificial Intelligence Strategy projects about 2.5 GW of compute capacity by 2030, which would require between 3.5 and 4 GW of electricity demand, while more than 12 GW of grid access rights have already been granted since 2021. The ministry argues that, without tying that demand to new renewables, growth could pull on gas-fired generation and raise electricity costs for every other consumer. Its summary puts it this way: “every new megawatt consumed must be matched by a new renewable megawatt.”

The numbers behind EY’s simulation

EY modeled, hour by hour, a 3.5 GW fleet of constant demand, split 75% solar and 25% wind, with four-hour batteries at 90% efficiency and production curves from Spain’s grid operator, Red Eléctrica. Its lowest-impact scenario requires 49.8 GW of generation and storage capacity — 14.2 times the power of the data centers themselves. That figure needs to be read carefully: it adds battery power to generation power, which are not equivalent measures.

The oversizing comes down to winter. Sizing the plant for the days with the least sun and wind leaves, according to the consultancy, 19,742 GWh of surplus energy for the rest of the year, of which 931 GWh the grid could not absorb. That would mean 16% more curtailment on top of the 5,831 GWh recorded in 2026. EY adds that wind variability, which can differ by up to 58% between years in some months, exposes data centers to surcharges tied to a factor they don’t control.

The bottom line is a supply cost of €133.07/MWh in 2030, versus €55 for the CAL OMIP futures price for that year, as of October 1, 2026. It’s worth noting what is being compared: a full cost of investment and operation for a company’s own plants, with a required 8% return, against a wholesale market futures price. A data center that signs a PPA today wouldn’t pay exactly that futures price either.

The report also includes an international comparison. Ireland requires 80% renewable coverage with new generation, but measured on an annual balance with a six-year transition period. Germany requires 50% renewable coverage, rising to 100% in 2027, and accepts guarantees of origin. Portugal limits itself to the European Union’s reporting obligations, which is why EY points to it as the natural destination for projects that don’t end up built in Spain.

The consequences the consultancy foresees — and what it leaves out

EY estimates that data centers’ IT capacity in Spain would grow from 439 MW in 2025 to about 2,536 MW in 2030, with €66.9 billion in investment, and argues the rule would put between 80% and 90% of that potential investment at risk. If between 3.5 and 4 GW of demand failed to connect, revenue from the tolls and charges that fund the system’s regulated costs would fall between 1.1% and 5.7% in 2030, shifting between €118 million and €642 million onto other consumers. These are the consultancy’s projections, not observed data, and they depend on those projects actually materializing — something the report itself qualifies by noting that only part of the announced pipeline would end up being built.

EY’s conclusion is that the draft Royal Decree should be revised “by softening its requirements, in line with European rules,” and that additional obligations should only be considered once data centers carry enough weight in demand to justify them. That’s the same line taken by other industry voices when they rejected the draft’s renewable requirements.

Not every voice in the energy sector agrees. During the comment period, the Spanish Photovoltaic Union (UNEF) backed tying data centers to renewables through a phased rollout, and APPA Renovables went as far as proposing raising the target to 100%, albeit measured on an annual basis. The debate, then, turns more on hourly measurement and timelines than on the renewable obligation itself. EY’s analysis also doesn’t quantify the scenario that worries the government: how much gas-fired generation, and how much extra cost, connecting that demand without requiring new generation would mean. That contrast, together with the final version of the text, is what will make it possible to weigh these figures, at a time when data centers’ electricity consumption in Spain is already climbing.

Frequently Asked Questions

Has Spain’s data center decree been approved?

No. It is a draft that MITECO put out for public comment between August 27 and September 10, 2026, and its text can still change before it is approved.

What are additionality and hourly matching?

Additionality requires 80% of consumption to come from new renewables, commissioned no more than 18 months before the data center starts operating. Hourly matching requires 80% of each hour’s consumption to be covered by renewable output generated in that same hour.

How much more expensive would the rule make electricity for data centers, according to EY?

EY calculates a supply cost of €133.07/MWh in 2030, versus €55 for the futures price for that year. That is the result of its own simulation, built on its own cost and return assumptions.

Does the European Union require anything similar?

According to EY, no European rule imposes additionality or hourly matching on data centers. The EU focuses on efficiency and reporting obligations, with an A-to-G label whose first ratings are expected before August 2027.

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