The Madrid South project will be the first in a series of joint developments that combine cutting-edge digital infrastructure with 24/7 renewable energy supply.
Energy company Iberdrola and Irish operator Echelon Data Centres have announced a historic joint venture for the development of large-scale data centers in Spain, which is already emerging as the biggest binding agreement between an energy company and a digital infrastructure developer in Europe.
The partnership represents a strategic collaboration between two giants in their respective sectors to address the exponential increase in energy consumption driven by artificial intelligence, cloud computing, and digital services.
Clean energy and scalability: key elements of the agreement
The new company will be 20% owned by Iberdrola through its subsidiary CPD4Green, and 80% by Echelon, owned by the US-based Starwood Capital Group. Iberdrola will contribute its expertise in identifying strategic sites with access to the electrical grid and ensuring an uninterrupted supply of renewable energy, while Echelon will handle the development, design, marketing, and operation of the centers.
The first project of this alliance will be the Madrid South complex, a facility covering 160,000 square meters with a capacity of 144 megawatts of IT power, connected to 230 MW of electrical capacity. It is estimated to generate 1,500 jobs and be operational before 2030.
Solar self-consumption and total sustainability
One of the most notable aspects of the project is that the data center will have its own photovoltaic plant capable of supplying 1 terawatt-hour of electricity annually, equivalent to that of a medium-sized city. This capacity will be enhanced with other renewable assets from Iberdrola, ensuring that the entire energy supply is green and available 24/7, 365 days a year.
“This alliance strengthens Iberdrola’s strategy to facilitate the deployment of sustainable digital infrastructure. Data centers are already a key driver of global electrical growth, and with Echelon, we take a significant step toward responsible digitalization,” said David Mesonero Molina, Iberdrola’s Corporate Development Director.
“Spain is a priority market due to its renewable generation capacity and digital infrastructure. Together with Iberdrola, we can offer our clients cutting-edge, sustainable, and efficient data centers,” added David Smith, Echelon’s Investment Director.
Spain, a new digital hub in southern Europe
This agreement occurs in a context of rapid growth in Spain’s data center sector, driven by factors such as:
- Top-tier fiber optic infrastructure
- Transcontinental submarine connectivity, channeling over 70% of data traffic to Europe
- Competitive renewable energy availability, with lower prices than many northern countries
- A stable, modernized electrical grid
Iberdrola, already supplying over 11 TWh annually to tech companies worldwide, has a portfolio in Spain capable of developing up to 700 MW of data centers and an additional potential of 5,000 MW.
Comparison with other European initiatives
While companies like Microsoft and Meta are advancing individual projects with direct investments in Spain and other countries, the Iberdrola and Echelon joint venture represents an innovative hybrid model, where renewable energy is integrated from the initial design rather than added later. Unlike other initiatives relying on long-term offsets or PPAs, this agreement ensures direct, on-site, 100% green power, aligned with European sustainability goals and the Green Deal.
With this partnership, Iberdrola and Echelon position Spain at the epicenter of Europe’s digital and energy transition, demonstrating that it’s possible to combine technological growth, operational efficiency, and environmental commitment. The Madrid South project could mark the beginning of a new generation of sustainable data centers, establishing the Iberian Peninsula as a leader in resilient and eco-friendly digital infrastructure.
via: iberdrola