EU proposes energy consumption rating for data centres

A European Union proposal aims to assign energy and water consumption ratings to data centres in Europe in an effort to avoid potential public backlash as the bloc seeks to expand its computing capacity. The EU plans to triple its data centre capacity within the next seven years, in an attempt to catch up with the United States and China in the field of artificial intelligence.

However, expanding data centre capacity must not come at the expense of increased pressure on power grids, water supplies, and energy costs, warned Teresa Ribera, vice president of the European Commission for clean transition. Data centres that generate over 500 kW of power are already required to report key performance metrics to the EU, and the proposed rating system will provide the public with information about their water and energy consumption.

The rating system will follow a color-coded scale, with A/Green being the most efficient and G/Red being the least efficient, similar to the system used for household appliances. Efficient data centres that contribute to the grid, reuse waste heat, and incorporate clean energy generation will receive higher scores. EU Vice President Ribera emphasized that efficient, flexible data centres powered by additional clean energy and waste heat reuse are assets for the EU's energy transition.

The International Energy Agency predicts that the fast-growing sector will consume more than 3% of overall electricity demand in the EU by 2030. To address the growing energy demand of data centres, EU Commissioner for Energy Dan Jorgensen stressed the importance of understanding their energy and resource consumption. The labels will be automatically generated based on companies' reporting and will be accessible through an EU database, with the first ratings expected in 2027.

The EU is also exploring the possibility of setting minimum performance standards for data centres. In Ireland, data centres accounted for 22% of electricity usage in 2024, up from just 5% in 2015. In December, the Commission for the Regulation of Utilities announced that data centres could be constructed in areas that meet at least 80% of their annual energy demand through renewable electricity sources.