Europe's Demand for Data Centers to Triple
Europe's demand for data centers will more than triple by 2030 as will its demand for new power generation to support its explosive growth.
Demand for data centers in Europe--which includes the European Union (EU), the U.K. and Switzerland--is expected to grow to approximately 35 gigawatts (GW) by 2030, up from 10 GW today, driven mainly by emerging technologies such as AI. At the same time and based on the current rate of adoption, the region's data center power consumption is expected to almost triple from about 62 terawatt-hours (TWh) today to more than 150 TWh by the end of the decade. According to a McKinsey (New York) report, more than US$250-$300 billion of investment will be needed in data center infrastructure, excluding power generation capacity, to meet this new IT load demand. On the power front, most of the new capacity is expected to be powered by renewables, driven by the net-zero commitments made by many major data center players and climate change targets set by most European countries. Data centers account for around 2% of total European power consumption today, but this will grow to 5% over the next six years.
The entire European power ecosystem faces "significant challenges in accommodating this growing demand." These include limited sources of reliable power, sustainability concerns, insufficient upstream infrastructure for power access, land availability issues, shortages of power equipment used in data centers, and a lack of skilled electrical tradespeople for building facilities and infrastructure. The report highlights established markets such as Dublin and Frankfurt, where the time required to supply power to new data centers can exceed three to five years, with lead times for electrical equipment alone often surpassing three years. These cities have also placed moratoriums on new data center connections in order to protect their power supplies.
Industrial Info is tracking almost 750 European active and planned data center projects worth more than US$94 billion in investment. Most of the projects are located in Spain, followed by the U.K., France, Germany and Sweden. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report.
AI is driving power demand because it has significantly higher power density requirements that come with the new generation of graphic processing unit (GPU) chipsets, the report stated. At present, data center growth in Europe is fueled by hyperscalers and colocation leases with hyperscalers alone driving up to 70% of the anticipated demand by 2028. A hyperscaler is a firm that offers large-scale cloud computing services with the ability to rapidly scale up or down, such as Amazon's (NASDAQ:AMZN) (Seattle, Washington) Web Services business unit. Colocation providers offer physical space, power, and cooling in its data centers for customers to house their own servers and networking equipment.
In evaluating new projects, data center operators need to consider three key factors when building out new capacity:
"As Europe confronts an increasingly strained power grid, the future of data centers--critical to the continent's digital infrastructure and competitiveness--depends on strategic choices about location and energy management," the report stated. "In a landscape where reliable and swift power access is no longer guaranteed, companies that rely on or build data centers must confront this new reality head-on. The trade-offs between power availability and data transmission infrastructure are no longer theoretical; they demand urgent action. To balance the increased penetration of intermittent renewables, Europe will require more dispatchable energy sources. It may also need to overbuild the peak capacity of renewable installations to meet the unexpectedly high demand from data centers for green energy."
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