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
Datacenter demand in Europe could drive electricity costs upward unless policymakers step in, according to Moody's. The agency anticipates server farms' power needs to surge by 2035, straining utilities and grid infrastructure. Currently, datacenters account for a mere 2.5 percent of electricity consumption in major European markets, but projections show this share could swell to 5.7 percent in France, 17 percent in the UK, and as high as 30 percent in Ireland by 2035.
To meet this growing demand, the EU aims to quadruple datacenter capacity over the next several years, necessitating new power generation and grid expansion. The report notes that transmission networks may face short-term financial strain, while distribution networks could also be impacted due to operators' limited funding responsibilities for grid connections.
Some utilities are exploring innovative solutions, such as leveraging existing grid connections at old fossil-fuel plant sites. However, the cost of grid expansion and potential supply-demand imbalances could push energy prices higher. Moody's warns that this surge in demand could prompt governments to intervene through measures like price caps or subsidies to protect consumers.
Ireland, in particular, is implementing stricter requirements for grid connections, requiring operators to provide on-site or nearby power generation or storage capacity and meet significant renewable energy targets.
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