Iberdrola and Echelon Data Centers have taken a decisive step to position Spain among the world’s leading digital infrastructure hubs. Both companies have finalized their strategic partnership to create Echelon Iberdrola Digital Infra, a new company that plans to invest more than 2 billion euros in the development and operation of large-scale data centers across Spain.
This is the largest joint venture in Europe between an energy company and a data center developer, reflecting how the rise of cloud computing, artificial intelligence, and digital services is also reshaping the country’s energy and industrial landscape.
The focus of this new company will be on — global tech giants — and on infrastructure and AI service providers, segments demanding massive computing capacity, low latency, and a stable, competitive, increasingly renewable power supply.
An unprecedented partnership in the data center market
With regulatory approval already secured, Echelon Iberdrola Digital Infra starts with a very uncommon position for a new player:
- Over 700 MW of secured electrical capacity,
- and a potential pipeline that could reach 5,000 MW in the future, according to information provided by the companies.
The equity in the joint venture is structured with up to 80% for Echelon and the remainder for Iberdrola, which contributes its experience in renewable generation and large electrical infrastructure development. Meanwhile, Echelon will handle permits, design, marketing, and operation of the data campuses.
Thus, Iberdrola positions itself as a leading energy partner for data centers, a market where it already supplies over 11 TWh annually to major tech companies and data center operators worldwide.
Madrid South: a 144 MW giant for the AI era
The first project stemming from this alliance will be Madrid South, a complex of 160,000 m² designed to host one of the largest data centers in the country. The campus will feature:
- 144 MW of data processing capacity,
- a secured electrical connection of 230 MW,
- and an estimated annual energy demand of 1 TWh.
The scale of these numbers places Madrid South directly among the hyperscale campuses needed by major public clouds and new AI factories, where generative models, recommendation systems, and large-scale data analysis platforms are trained and run.
The economic and employment impact will be significant: an estimated about 1,500 direct and indirect jobs related to construction, operation, and auxiliary services of the complex.
100% renewable energy for mass electricity consumption
A key differentiator of this project is its energy approach. The data center will have its own photovoltaic solar plant and will benefit from additional renewable energy supplies from Iberdrola to cover 100% of its electrical consumption.
In a context where energy consumption by data centers and AI generates intense debate — concerning its impact on the power grid, CO₂ emissions, and costs — Iberdrola and Echelon’s strategy aims to integrate these new infrastructures within the framework of energy transition and decarbonization:
- Long-term agreements (PPAs) and 24/7 solutions to align digital consumption with renewable generation.
- Integrating the data center into the electrical grid with criteria of supply security and flexibility.
Spain solidifies its role as a European digital hub
The launch of Echelon Iberdrola Digital Infra comes at a time when Spain is strengthening its position as a strategic digital node in Europe. The country combines several factors that make it particularly attractive for data center deployment:
- A top-tier fiber-optic network within the EU.
- The arrival and expansion of multiple transatlantic and Africa/Latin America submarine cables, turning the Peninsula into a gateway for international traffic.
- Abundant renewable energy at competitive costs, crucial for large tech firms seeking to reduce their carbon footprint.
- A robust electrical infrastructure and reinforcement projects designed to meet the demands of the digital economy.
The Spanish government has repeatedly highlighted Spain’s role as a data and cloud services hub in southern Europe, a positioning that alliances like Iberdrola and Echelon are helping to realize through concrete investments and actual MW deployments.
A move that reshapes the landscape of digital investment
Beyond the numbers, the creation of Echelon Iberdrola Digital Infra sends several messages to the market:
- Utilities are fully entering the digital infrastructure business.
The line between “energy sector” and “tech sector” blurs: major data centers are now seen as critical infrastructure on par with electrical or gas networks. - Data centers become industrial drivers.
They not only house servers but also attract investments in networks, civil works, specialized services, maintenance, security, construction, and skilled employment. - AI accelerates demand for digital MWs.
The declared focus on hyperscale and AI services indicates that the new wave of data centers is already designed with generative AI workloads and model training in mind — much more intensive in computing than traditional web applications. - Sustainability shifts from a “plus” to a requirement.
Ensuring 100% renewable energy for Madrid South demonstrates how major digital infrastructure investments align with goals of climate neutrality and ESG standards.
The challenge moving forward will be balancing the enormous power demand of these projects with system stability, renewable deployment, and territorial planning — especially as each new digital MW will be scrutinized carefully by regulators, electric grids, and public opinion.
Frequently Asked Questions about Echelon Iberdrola Digital Infra
What is Echelon Iberdrola Digital Infra, and who is behind it?
Echelon Iberdrola Digital Infra is a joint venture between Iberdrola and Echelon Data Centers to develop and operate large-scale data centers in Spain. Echelon will hold up to 80% ownership and will handle permits, design, and operation, while Iberdrola will contribute expertise in renewable generation, grid connection, and clean energy supply.
What investment amount and power capacity are planned for this partnership?
The new entity aims to invest more than 2 billion euros in Spanish data centers and already has over 700 MW in secured electrical connections, with a potential pipeline reaching 5,000 MW across strategic locations around Madrid and other areas of the country.
What are the characteristics of the Madrid South data center?
Madrid South will be the partnership’s first major project: a 160,000 m² campus with 144 MW of data processing capacity and a 230 MW electrical connection. It will generate approximately 1,500 direct and indirect jobs, have an estimated 1 TWh annual consumption, and operate with 100% renewable energy thanks to its own solar PV plant and additional renewable supplies from Iberdrola.
Why is Spain becoming a hub for data centers and AI?
Spain offers a highly attractive combination for these projects:
- Strategic geographic position and multiple submarine cables,
- An advanced fiber-optic network,
- Abundant renewable energy at competitive prices,
- A robust electrical infrastructure and projects to reinforce and mesh it for the digital economy’s needs.
All these factors, along with the interest of top tech companies to diversify their European locations, explain the surge of new investments in data centers and cloud or AI platforms in Spain.
Source: iberdrola