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ARTICLE AD BOX
The rapid adoption of AI is increasing European data centre capacity demands by nearly 80% every year. With the EU mandating for a further 11.7% reduction in energy consumption by 2030, the race is on to provide enough green power and grid connections. E.ON’s Christoph Hiesgen takes us through the challenges and solutions.
The rapid advancement of AI, particularly generative AI such as ChatGPT, is transforming the landscape of data centres. Driven by improvements in machine learning algorithms and increased computing power, ChatGPT acted as a catalyst, igniting a race for investment and adoption in AI technologies across various sectors, including data management and analytics. Add to this the increasing demand for cloud computing, where companies ‘outsource’ their data management to cloud servers, and the result is an unprecedented demand for more hyperscale data centres, each requiring more than 100MW of power.
This surge in data centres, which already account for 1-1.5% of global electricity consumption[i], is projected to see electricity usage soar to over 1,000 terawatt-hours (TWh) by 2026, effectively doubling 2022 consumption levels[ii]. And according to GlobalData’s construction database, between 2024 and 2025, another 1,600 construction projects for data centres had been announced, with the US leading the way, followed by China and India. Indeed, Microsoft and Google’s 2023 Scope 3 emissions increased by 30% and 8%, respectively, due to data centre construction[iii]. Partly driven by this expansion in capacity, GlobalData expects data centre market size to reach US$162.5bn by 2028[iv].
According to the IEA, as of 2024, 16% of the world’s data centres were located in Europe. Ireland especially is experiencing a huge surge in the number of data centres, provoking concerns over its grid capacity. Other top European data centre markets are Germany, France, UK and the Netherlands[v]. However, the European Commission’s Energy Efficiency Directive[vi] mandates data centres to report their energy performance annually. In addition, with the 2023 update, a legal requirement was e stablished for EU countries to collectively ensure an additional 11.7% reduction in energy consumption by 2030. However, as AI workloads increase, so do investments in data centre capacity, further increasing the carbon footprint of data centres and posing a real challenge for ESG targets.
Unfortunately, there is currently a huge mismatch between the rapid expansion of data centres and the slower development of energy infrastructure, posing significant challenges for energy suppliers. In response, technology firms are increasingly seeking renewable energy sources and innovative cooling solutions to mitigate the environmental impact of their operations. This trend necessitates a re-evaluation of energy strategies to ensure that the growing power needs of AI can be met sustainably.
European energy challenges
Christoph Hiesgen is Head of Business Development at E.ON Energy Infrastructure Solutions. From his base in Germany, Hiesgen explains the key energy challenges for European data centres: availability of power; significant shortage of grid connections in key regions; and the length of time that grid reinforcement processes can take (currently up to ten years).
“There is an annual increase in AI data centre capacity of 78%,” says Hiesgen. “So, the availability of power is the biggest driver for data centre operations. The data centres themselves are getting bigger and bigger – we are talking between 200 and 1,000 megawatt connectivity. The electricity demand to run data centres for AI is around four to five times higher than for a conventional data centre. This means the power consumption is higher and you simply need more electricity.”
But it’s not just any power the data centres need, it’s green power.
“If you can use green power, you lessen the carbon footprint,” notes Hiesgen. “In the future, [data centres] will be obliged to show that they are buying green power. Green power can be PV or wind or a combination, but when there’s no wind and it’s not sunny, we cannot supply enough power. How do we bridge this gap?”
Another challenge is the different power connection challenges in each region, while local regulatory requirements and data sovereignty also play a crucial role. When it comes to location, proximity to fibre lines is crucial for data transmission speed and connectivity.
Hiesgen says that E.ON has been working hard on finding solutions to satisfy customer demand for green power, including on-site power generation using fuel cells or gas engines in combination with absorption chillers and removing waste heat to use for district heating.
Grid connections and infrastructure
Most importantly, data centres need the correct infrastructure, and suppliers are currently dealing with delays for standard transformers of more than a year, says Hiesgen. “We are also seeing a lack of engineering competencies in the field. Different industries are facing the same problem, but for data centres, capable electrical engineers are needed to plan it properly.”
E.ON is the only European company that has the full range of available solutions under one roof, says Hiesgen. E.ON offers comprehensive solutions for data centres, including reliable green power from the grid alongside on-site power generation and innovative waste heat utilisation. Coromatic, a market-leading provider of critical infrastructure solutions in the Nordic region, joined E.ON in 2019, and has designed and built more than 1,000 data centres and server rooms.
“Of course, many competitors can make PPAs (power purchase agreements) and green power purchases, but when it comes to the solutions, E.ON is the only provider who has everything in house, to bring the best benefit for the customer,” says Hiesgen. “This is unique to E.ON. If you look at our competitors – they may have part of the solution, but they do not have the electricity grids, they do not have district heating projects. This is somewhere where E.ON has a great footprint.”
For more information on E.ON’s innovative solutions for data centres, download the free white paper below.
[i] https://www.iea.org/energy-system/buildings/data-centres-and-data-transmission-networks
[ii] GlobalData: Deep Dive into The Environmental Impact of Data Centers,‘ August 2024.
[iii] GlobalData: Deep Dive into The Environmental Impact of Data Centers,‘ August 2024.
[iv] https://www.power-technology.com/analyst-comment/powering-ai-ata-centre-expansion/
[v] Source: GlobalData, based on data from IEA Electricity 2024; International Trade Administration, US Department of Commerce; Energy Consumption in Data Centers and Broadband Communication Networks in the EU (2024). Reported in ’Deep Dive into The Environmental Impact of Data Centers,‘ August 2024.
[vi] https://energy.ec.europa.eu/topics/energy-efficiency/energy-efficiency-targets-directive-and-rules/energy-efficiency-directive_en#energy-performance-of-data-centres
