Data centre industry may double in S Europe but hurdles remain | Montel News

Data centre industry may double in S Europe but hurdles remain | Montel News

(Montel) Southern European nations like Italy, Spain and Greece could see their energy-intensive data centre industry double in the next decade, though power sourcing and permitting remained key challenges, industry experts told Montel this week.

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“In the next 10 years, market capacity will double” in southern Europe, said Luca Beltramino, vice president of the Italian Data Centre Association (IDA).

With the zone hosting 20% of the continent’s population but only 10% of data centre power capacity, the region held huge potential for expansion, he added.

In Europe overall, including the UK, data centre power demand was projected to grow from 10 GW today to 35 GW by 2030, according to a recent report from consultancy McKinsey.

However, substantial challenges in “accessing energy quickly and heavy bureaucracy” remained, particularly in terms of southern Europe, IDA president Sherif Rizkalla told Montel.

“Driving growth”
Nevertheless, “consumers, businesses and public sector demand, combined with digitalisation and new business models, is driving the growth”, he added.

The data bore this out, with Europe’s data centre industry growing nearly 20% year on year in the first quarter of 2024, fuelled by development in the four main data centre markets of Frankfurt, London, Amsterdam and Paris, according to Global Commercial Real Estate Services.

Despite this, supply shortages persist across the region and sourcing new locations for such facilities was increasingly difficult, forcing the industry to turn southward for virgin territories, analysts said. 

In 2023, nearly 2% of Italy’s total electricity consumption was made up of data centre demand, the IDA said, with this expected to more than double to 1.4 GW by 2028.

“Italy is catching up on digital infrastructures compared to the FLAP [Frankfurt, London, Amsterdam and Paris] countries, considered the most digitally developed countries in Europe with the highest number of data centre infrastructures,” Rizkalla said.

However, higher electricity prices in Italy and a lack of political and fiscal stability could curb investment, said Francesco Sassi, a research fellow at think tank RIE, told Montel.

Grid connectivity key
Providing connectivity to the grid was crucial in this phase, said Valerio Usella, senior adviser at consulting firm Open Gate Italia.

“Data centres are one of the few certainties on the demand side… and they will be one of the major growth factors in the years to come,” Sassi added.

“The presence of data centres will certainly increase” in Italy and southern Europe, said energy consultant Sergio Giraldo.

“Microsoft and BlackRock have announced initiatives in this direction.” 

The former recently announced plans for a EUR 4.3bn data centre investment in Italy in the coming years, while the latter was seeking to purchase decommissioned power plants from local utility Enel to build such units, according to local press reports.

Watch Montel’s video report on this issue here.

Source link : https://montelnews.com/news/b58189c9-eebf-4da3-ba51-d20ab952ecd7/data-centre-industry-may-double-in-s-europe-but-hurdles-remain

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Publish date : 2024-10-30 09:14:00

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