Report: Data Center demand in Europe will grow especially in the northern and southern countries

Demand for data centers is set to rise sharply in the coming years, especially in the countries of northern and southern Europe. This is according to a recent report. The energy think tank Ember has forecasted the development of data center demand in Europe in a report. Driven by the boom in Artificial Intelligence (AI), strong growth is predicted. The European Union has set a goal to triple its data center capacity within the next five to seven years to strengthen its position in the global AI competition. However, current forecasts suggest that this goal is likely to be missed, with a doubling of capacity by 2030 being more realistic.

Causes of the rising demand

The driving force behind the growing need for data centers is the advancement in Artificial Intelligence. AI applications require immense computing power that existing infrastructures can often no longer provide. To meet this demand and secure Europe’s competitiveness, the EU has launched initiatives like “InvestAI,” which aim to mobilize 200 billion euros in AI investments. Experts assume that an AI boom could increase the global gross domestic product (GDP) annually by 0.5 percentage points between 2025 and 2030, provided the necessary data center infrastructure is deployed in time. Moreover, data centers are a central point of attraction for IT companies and foster the development of digital ecosystems, helping Europe to seize new opportunities in the fields of AI and quantum technologies.

Regional Differences in Europe

The increased demand is leading to a remarkable shift in the choice of location for data centers within Europe. Traditionally, these markets have been dominated by the so-called FLAP-D cities: Frankfurt, London, Amsterdam, Paris, and Dublin. However, in these established hubs, the availability of power grids has become a significant obstacle. In 2023, data centers in Amsterdam, London, and Frankfurt consumed between 33 and 42 percent of the total electricity demand, and in Dublin, it was nearly 80 percent. This high concentration has led to grid bottlenecks and long waiting times for connections, which can average seven to ten years in these key markets, and sometimes even up to 13 years. The increasing strain on the grid has even led to a de facto moratorium on new data centers in Dublin until 2028 in Ireland. Similar challenges also exist in Frankfurt and Amsterdam. Consequently, the growth of data centers in the FLAP-D markets is expected to be significantly slower, at about 55 percent by 2030, compared to other regions. Their historical dominance, which accounted for 62 percent of European capacity in 2024, is projected to decline to 51 percent by 2035. France is an exception, as its grid is still relatively unburdened. This development is pushing investments into other regions of Europe. Countries with fewer grid bottlenecks and shorter connection times are expected to experience twice as much growth in data centers. The Scandinavian countries of Sweden, Denmark, and Norway are leading the way here. The electricity demand from data centers there is expected to triple by 2030. These regions not only offer lower grid utilization and short waiting times but also other advantages such as lower electricity prices, low carbon intensity, affordable land, and reduced cooling needs due to the colder climate. For example, the Norwegian transmission system operator Statnett has projected a tripling of electricity demand from data centers by 2030, and Denmark has already seen an annual capacity growth of 26 percent over the last five years through proactive grid planning. Belgium is also experiencing strong growth. The country’s grid operators are closely monitoring data center trends and incorporating them into their grid planning, which allows for forward-looking grid expansions. This grid preparation is a crucial factor for developers who are locating in Belgium due to the more favorable grid conditions, especially as the grid situation in the Netherlands and Germany is more strained. Italy is also emerging as a promising market, with waiting times of only about three years and a huge increase in connection requests. Countries that can halve their connection times could attract about 20 percent more data center growth by 2030.

The Importance of Grid Availability

The availability of grid capacity has become a decisive factor for investment decisions, often more important than other aspects such as land costs or regulatory frameworks. Well-planned grids promote economic activity and attract investment, while inadequate grids can be a hindrance. Market participants are not willing to wait for the necessary infrastructure to be built but instead move their projects to where capacity is immediately available. Concepts such as flexible grid connections, phased connections, and strategic site planning can accelerate deployment and reduce the need for grid expansions.