Hyperscaler data centres and predictable power – top trends shaping Europe’s data centre landscape 

The soaring energy demand of data centres is necessitating tailored solutions to solve current and future grid connection and power supply challenges. 

Data centres are hardly off the news with their growing energy consumption, primarily associated with bitcoin and now artificial intelligence (AI) and its derivatives. 

To power these, and other services such as cloud and software-as-a-service, data centres have been undergoing rapid growth, with no sign of slowing. 

The International Energy Agency (IEA) highlighted in its report on ‘Energy and AI’ a near doubling in global investment in data centres since 2022, reaching $500 billion in 2024. 

The IEA further estimates that in 2024 data centres accounted for around 1.5% of global energy consumption – almost half in the US, about one quarter in China and around 15% in Europe – and driven by AI, that the consumption is projected to more than double to close to 4% by 2030. 

Data centres and other associated power sector stakeholders are thus facing significant challenges as this demand soars, necessitating the delivery of tailored solutions to address these. 

To find out more and understand what else data centres should consider developing, I sat down with Franziska Weiss, Vice President Market & Business Development Europe at Siemens Energy, whose responsibilities include meeting the needs of the region’s growing data centres.  

What are the key trends for data centres in Europe? 

The key trends are very clear to us; we work with customers from all four different types of data centre – the AI data centres, cloud providers, enterprise businesses where the data centre is dedicated to a single organisation, and co-locator hosts where businesses rent space for their data centre needs. We work with anything requiring double-digit MW output and above, from a 10MW enterprise set-up, to huge hyperscalers that require their own guaranteed source of power generation.  

The key market trends range from up-coming EU-derived policy, through continuity – and even availability – of energy supply to environmental and societal considerations for the future. These are, to a high degree, interwoven – so much so that we are producing a white paper with insight from our team into the most immediately impactful trends for operators in Europe. 

What about the geographical spread? 

The smaller data centres tend to be fairly scattered around Europe, for example, enterprise data centres obviously benefit from being close to the businesses they serve by their nature. Hyperscalers don’t necessarily have the same constraints. While there are some prominent centres such as London, Frankfurt, Amsterdam and Milan, right across Europe from Portugal to Kazakhstan we are seeing data centres and the need for them. 

But despite the location or size of the data centres, they all face essentially the same challenges from the technology point of view, especially the need for uninterrupted secure, reliable energy supply ideally via grid access. 

For us as Siemens Energy, supporting data centres facing the energy trilemma of driving sustainability, security and affordability is very similar, regardless of their size, specification or location. 

What are the main energy challenges data centres are facing in Europe right now? 

One challenge is their energy consumption. Projections are that within a year, data centre electricity demand globally could equal the energy demand of the whole of Japan, a country with extensive heavy industry and a large population. It is likely that we will see a ‘new nations’-worth of energy demand appearing regularly. 

A second challenge is the speed of change being seen in microchips and other data centre elements. There is a cycle of increasing their capability, more is being made possible by this additional capability, more being asked of the data centre – requiring new developments. All of this impacts the power demand. This in turn affects the planning and underlying business of the data centres, as well as the predictions of future demand. 

Thirdly, is that the growth of data centres is taking place in parallel with electrification and the decarbonisation of other industries. All are becoming competitors for grid connections and electricity, as well as facing the widely-publicised delays in permitting.  

As an example, it has been projected that as many as 40% of existing AI data centres could be operationally constrained due to power availability by 2027. 

Having said that, from the technology point of view, the challenge of providing reliable uninterrupted supply is not new and at Siemens Energy we have worked on it for decades in other industries and critical infrastructures, such as healthcare and oil and gas.  

We benefit from being well positioned across the value chain and, thanks in part to this, are a reliable partner that can be of great help in phasing these challenges when it comes to customising and integrating the different offerings into the market.

What are the key considerations in designing energy solutions for data centres? 

There are different players involved across the value chain – the designer of the data centre, the local utility, the off-taker and the data centre itself – and we can support each of them in designing the right solutions for both behind the meter and in front of the meter and in connecting them to the relevant players. 

Grid access is one of the biggest challenges, but no different for data centres than for any industry with which we work. Likewise compliance with national and international regulation; one example is our SF₆ free switchgear technology, to reduce SF₆ gases in line with phased EU regulation targets. 

Another aspect is grid fluctuation and the reliability of supply, where to ensure both things we have our E-STATCOM technology, which is a perfect fit for data centres. 

Then there is the need for the 99.999% uptime availability that data centres must provide. For this, they need back-up power. Typically, this has been provided by diesel generators, but we offer small gas turbines that are future-ready, able to accept hydrogen blends or other future efuel mixes. 

These fuels of course help to reduce emissions and enable data centres to meet the scope commitments in their strategies. We also know that indirectly for example, through the PPAs that data centres are purchasing, that lots of them are also being supplied from technology from Siemens Energy wind portfolio. 

Is there demand by data centres for on-site power? 

Some do, either for technology or business reasons. One of those business reasons is to address the grid access challenges. We also are seeing in some countries the emergence of policies that could require data centres to provide on-site power to balance their grid needs. No on-site power, no planning permission. 

There also is the trend of the rise of the prosumer, i.e. data centres that both produce and consume electricity. Some European countries already have capacity markets in which data centres can participate by offering their flexibility to reduce load during peak demand and receive payments for this capacity. 

Broadly the driver of these actions is policy, and I mentioned the EU’s determination for SF₆ free technology by 2032; one of our first ‘reference’ deployment is at the new Sines data centre campus in Portugal. 

In Germany data centres are required to implement energy management systems by July 2025. 

In Ireland we expect policies to emerge to address data centre demand, since half the electricity produced for the Dublin area is going to data centres. In that city we have a reference project of an aeroderivative gas turbine installation for backup power. 

What are the broader influences on the market for data centre operators? 

I mentioned the speed of change and achieving a balance with today’s needs against up-coming policy requirements. This requires forward planning and the provision of modular solutions. 

Other issues are the technology supply chain, and permitting challenges that are impacting the data centre decision-making and planning processes. 

Particularly noticeable with the hyperscalers and cloud providers, we are seeing a trend towards higher density and larger data centres. 

How does Europe compare to the rest of the world – are we seeing the same challenges/opportunities for data centres in other regions? 

The challenges are global. Europe is an important market, as is the US and China, but we are seeing massive growth rates in southeast Asia, for example, where we expect the data centre capacity to more than double by 2030. 

 As a global technology provider, we build global partnerships but with regional adaptation to policies and market needs, and the respective regional speeds of the energy transition. 

The issues and challenges data centres face are to them unique, and it is essential that their model builds in flexibility and reliability, whilst making technology choices to accommodate changing environmental and energy policy and increasing energy demand. 

But these situations are not unique to Siemens Energy, and for us it is very satisfying to be able take technologies we have delivered to other industries and to modularise, customise and scale them for data centres. 

The lessons learned from supporting other industries’ power requirements can be incredibly valuable to data centre operators seeking solutions support to their challenges. These lessons enable us to provide our expertise and services across the value chain. 

See Siemens Energy’s solutions supporting data centre power challenges:
https://www.siemens-energy.com/global/en/home/products-services/solutions-industry/data-center.html