What Does A 168% Rise In European Data Center Investments Mean For The Energy Sector?

The global data center industry is experiencing unprecedented growth, with Europe reporting a 168% increase in data center investments in 2024 compared to the previous year (Euronews). While this expansion shows the rising demand for AI and digital services, it also raises concerns about its implications for the energy sector and the environment.

What are data centers, and how do they support the AI revolution?

A data center is a network of computing and storage resources that supports the delivery of shared software applications and data. These centers can house large amounts of essential information, making them critical for the day-to-day operations of businesses.

By early 2024, there were over 11,000 data centers worldwide (IEA), with Europe’s major data center hubs located in London, Paris, and Frankfurt. According to Statista, these (Figure 1) are among the top European countries with the most data centers.

The rise of artificial intelligence (AI), particularly generative AI, has made data centers more important than ever. AI models require enormous computational power and energy to process, train, and operate—requirements that only large-scale data centers can meet.

While data centers are not a new source of electricity demand, they are entering a phase of significant expansion. The increasing digitalization of the economy and rapid advancements in AI technology are driving the growth in both the number and size of data centers.?As AI adoption accelerates, the electricity consumption of data centers is expected to rise significantly, posing challenges for the energy sector and the climate.

What are the latest news in data center investments?

• Over the past five years, the global venture capital sector has invested over USD 225 billion in AI startups, compared to USD 143 billion invested during the same period in startups focused on clean energy (IEA).
• Mark Zuckerberg, CEO of Meta, announced plans to invest $60-65 billion in capital expenditure, primarily for data centers and servers, as well as to grow its AI teams (Meta).
• Amazon Web Services (AWS) announced a plan to invest $10 billion over the next five years to build and operate data centers in the United Kingdom (Reuters) while committed to investing €15.7 billion in Spain to expand data centers in the Aragon region, with a pledge to match electricity use with 100% renewable sources (Amazon).
• In May 2024, Microsoft revealed an investment of €4 billion in cloud and AI infrastructure, which includes expanding data center facilities in Paris and Marseille and planning a new data center campus in the Grand Est Region of France (Microsoft).
• Google is investing € 600 million in a new data center in the Dutch city of Groningen (Reuters), following its $1 billion investment in a new UK data center in Waltham Cross, Hertfordshire (Google).

But what does this mean for the energy sector and how data centers can mitigate this energy challenge?

The growth in data center investments is set to significantly impact the energy sector, as they are among the most energy-intensive infrastructures. The International Energy Agency (IEA) estimates that by 2026, global data centers could consume 1,000 terawatt-hours annually, a figure equivalent to the entire electricity consumption of Japan.?

This rise in demand will put pressure on energy grids, particularly in regions hosting hyperscale data centers, which can require over 100 MW of power—the same annual electricity usage as 350,000 electric vehicles (IEA).

Data centers don’t just require a substantial amount of energy to operate, they also need energy to stay cool.

Cooling systems, which ensure servers remain at optimal operating temperatures, are among the largest contributors to a data center’s overall energy consumption. As the scale of data centers increases, adopting more advanced and energy-efficient cooling technologies becomes a priority to minimize their environmental impact.

By leveraging Emissium 's real-time carbon data, updated every 15 minutes, data centers can align their energy consumption with periods of lower carbon intensity, effectively reducing their environmental impact.

Curious to learn how you can reduce your carbon footprint and save costs? Book a call with our team to explore how real-time electricity data can optimize your operations.

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