European datacenter boom threatens higher energy bills unless governments intervene
Moody's forecasts server farms could consume 17% of Dutch electricity and 30% of Ireland's by 2035
European datacenters are set to consume a growing share of the region's electricity by 2035, potentially driving up energy costs, according to Moody's. The agency is monitoring the financial impact on datacenter operators and electricity networks as these facilities are expected to become major drivers of electricity demand. Currently, power consumption by server farms is relatively low, with datacenters accounting for only a modest 2.5% of electricity in major European markets.
However, by 2035, some countries like the UK, France, and Ireland could see datacenters contribute 5.7%, 17%, and up to 30% of electricity demand, respectively. The EU aims to triple its datacenter capacity in the next few years, necessitating increased power generation and grid expansion. This could put pressure on grid operators' finances, particularly for transmission networks, which operators are only required to fund the connection costs.
To address this, utilities are exploring innovative solutions, such as repurposing existing fossil-fuel plant sites and partnering with developers for new facilities. Energy price hikes and political measures to limit customer burdens are likely responses, with some governments considering tax cuts, subsidies, price caps, or financial guarantees to manage the costs.
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