Emerging markets to drive European data centre growth with efficient grid connections, says think tank

Nordics and Southern Europe data centre demand could rise 110% by 2030. (Photo: Make more Aerials/Shutterstock)

Emerging markets in Europe are set to lead the growth of data centres, driven by shorter grid connection times, according to a report by energy think tank Ember. According to its insights, demand for data centres in regions such as the Nordics and southern Europe is expected to increase by 110% by the end of this decade, outpacing traditional hubs like Frankfurt, London, Amsterdam, Paris, and Dublin.

“As Europe courts AI industries, grids will be a make-or-break factor,” said Ember Europe senior energy analyst Elisabeth Cremona. “While hosting AI infrastructure promises tantalising benefits such as economic growth and digital sovereignty, these cannot materialise if grid congestion gets in the way.”

The report claims that investors are increasingly turning to emerging markets due to their efficient grid access. Traditional data centre locations face delays of seven to 10 years for grid connections, with some facilities waiting up to 13 years. In contrast, newer markets like Italy offer connection times as short as three years. By 2035, it is anticipated that half of Europe’s data centre capacity will be located outside traditional hubs.

The European data centre market is projected to grow from $47bn in 2024 to $97bn by 2030. This expansion supports job creation and tax revenue increases while aligning with the EU’s AI investment strategies. The EU’s InvestAI initiative, launched in 2025, aims to mobilise €200bn for AI efforts and triple data centre capacity within seven years.

Electricity demand from data centres is forecasted to rise significantly between 2024 and 2035, with an increase of nearly 150%. In key markets like Amsterdam, London, and Frankfurt, data centres accounted for up to 42% of electricity demand in 2023, with Dublin reaching nearly 80%. Emerging markets offer less congestion and faster grid access, the report claimed.

To address grid challenges, Ember recommends several strategies, including enhancing grid flexibility, strategically locating data centres, and adopting smarter grid connection agreements. These measures could reduce connection times from several years to just one year. With electricity demand projected to grow from 96 Terawatt hours (TWh) in 2024 to 236TWh by 2035, implementing these solutions is crucial for accommodating rapid expansion.

Traditional hubs decline as grid constraints shape investments

The shift away from the FLAP-D markets, that is, Frankfurt, London, Amsterdam, Paris, and Dublin, highlights the influence of grid constraints on investment decisions. Currently holding around 62% of Europe’s data centre capacity, these hubs are expected to decline to 51% by 2035. France remains an exception due to its relatively unconstrained grid compared to restrictions in Ireland, the Netherlands, and Frankfurt, said Ember.

Last month, a study published in the academic journal Joule claimed that AI systems are expected to account for almost 50% of data centre power consumption by the end of this year. The research by Digiconomis’ founder Alex de Vries-Gao projected that AI’s share could soon reach up to 23 gigawatts (GW), which is more than double total power consumption of the Netherlands.

Read more: Data centres face rising energy use from AI systems, finds new research