Proactive electricity grid planning is a pull factor for data centres, driving economic activity.
The EU has made AI plans foundational to its drive to boost Europe’s competitiveness on global markets. To support this, in 2025 the EU launched InvestAI, which seeks to mobilise €200 billion for AI investments, and its AI Continent Action Plan, which sets the goal of at least tripling data centre capacity in the next five to seven years.
Data centres are key to unlock AI investments. However, grid constraints have become a significant barrier to deployment in traditional data centre hubs known in Europe as the FLAP-D markets (Frankfurt, London, Amsterdam, Paris and Dublin).
Data centres already have a huge local impact on power grids, and their presence is growing. In 2023, data centres consumed between 33% and 42% of electricity demand in Amsterdam, London and Frankfurt, and nearly 80% in Dublin. In these major markets, decreasing grid availability and increasing congestion is causing grid connection queues to build up.
With time to market being critical for industry players, better grid availability is becoming a defining factor for where developers bring investment. With data centres poised for rapid growth, countries that proactively plan grids for this will be best positioned to capture the economic and strategic benefits of AI.
As Europe courts AI industries, grids will be a make-or-break factor. While hosting AI infrastructure promises tantalising benefits such as economic growth and digital sovereignty, these cannot materialise if grid congestion gets in the way. Countries investing now in innovative grids will more than likely emerge as Europe’s data infrastructure hubs in the years to come.
Electricity demand of data centres in Europe is projected to grow from 96 TWh in 2024 to 168 TWh by 2030 and 236 TWh by 2035 – an increase of nearly 150% over the next decade. In markets such as Sweden, Denmark and Norway, demand is set to triple by 2030. This rapid growth positions data centres as one of the fastest growing sources of power demand in Europe, ahead of electric vehicles and comparable to electrified industry.
The Nordics and countries in Southern Europe – with uncongested grids and short wait times for connection – are expected to see data centre demand grow (+110%) at nearly double the rate of traditional market leaders Frankfurt, London, Amsterdam, Paris and Dublin (+55%) by 2030. This trend is expected to continue and by 2035, half of Europe’s data centre capacity will be located outside the traditional data centre hubs as developers shift their investments to new markets.
Long wait times are deterring data centre developers, but strategic choices by system operators and developers themselves can help overcome grid constraints, speeding up deployment of new facilities and reducing required infrastructure expansion. Solutions can include strategic siting of data centres, incorporating flexibility and applying smarter grid connection agreements. The latter could purportedly reduce time in the connection queue to just one year.
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