Since 2023, the European IT power capacity has grown from 10,539MW to 14,784MW in 2025, with further cumulative investments of €176 billion expected between 2026 and 2031, the European Data Centre Association (EUDCA) highlights in its 2026 state of data centres report.
The drivers are the accelerating digitalisation across sectors, the rapid expansion and uptake of AI and the demand for a sovereign infrastructure, with data centres being recognised as a ‘strategic infrastructure’.
The report, which draws on input from members, finds that the traditional Frankfurt, London, Amsterdam, Paris, Dublin (FLAP-D) markets remain essential to the sector. But the growth also is relocating away from this hub-centric approach towards a distributed ecosystem in regions with abundant renewable energy and favourable climate and other operating conditions, such as strong international connectivity.
These new growth regions encompass southern Europe, the Nordics, central and eastern Europe and a rising group of tier-2 metropolitan regions, including Madrid and Milan, which are taking the lead, as well as Warsaw, Zurich, Vienna, Stockholm and Brussels.
Within this growth, colocation data centres continue to grow rapidly, fuelled by enterprises modernising their IT estates, the ongoing migration to hybrid cloud and the surge in AI-related workloads.
Broadly, growth has shifted from cloud-led expansion to AI-driven hyper-expansion, with a notable driver being the rise of what is termed ‘neocloud’, i.e. providers of ultra-high density AI optimised compute with a modular, rapid deployment capability and large power tranches.
Sustainability at the core
Sustainability remains at the core of sector development, according to the report. The sector has relocated from sustainability commitment to measurable delivery and regulatory integration, even as the absolute energy utilize continued to rise sharply.
The implementation of the new energy efficiency directive marks a major shift toward harmonised reporting and transparency across Europe, the report notes.
The sector continues to lead in renewable energy procurement, including a growing share of enhanced high-impact power purchase agreements, while investing in advanced cooling technologies, energy system flexibility with onsite storage and heat reutilize initiatives.
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Approximately 90% of the energy consumed by European data centres is now from renewable sources and 70% of operators report compliance with 75% renewable or hourly carbon-free energy, the report finds.
Moreover, 55% have already achieved the 2030 water usage effectiveness goal of 0.4l/kWh.
Overall, operators actively or partially measure their power usage effectiveness, over half their energy reutilize factor and almost three quarters their water usage effectiveness.
Despite this strong momentum, the sector faces significant challenges, the report adds. Power availability is now the single most important inhibitor to growth, especially in the major metropolitan hubs.
Grid congestion, long lead times for new connections, complex permitting procedures, geopolitical uncertainties and the escalating requirements of AI workloads all require coordinated action between policybuildrs, grid operators, regional authorities and the data centre industest.
“The exceptional growth of Europe’s data centre market is welcome news at a time when international volatility has focutilized many geographies on digital sovereignty and security,” comments EUDCA Secretary General, Michael Winterson.
“Once the issues of power availability and access are addressed, Europe has the opportunity to lead globally in AI-ready infrastructure while maintaining the highest standards of sustainability and responsible stewardship.”
Data centre power challenges
There are several strands to meeting the data centre power challenges, of which one is improving energy efficiencies within the centres themselves, particularly with AI workloads now demanding extreme compute densities upwards of 50kW per rack compared with the more moderate 8-12kW densities of traditional cloud and enterprise workloads.
Moreover, while AI training requires vast, centralised power availability, favouring regions with abundant renewable energy and lower land constraints, AI inference in contrast – driven by latency critical applications – pushes the compute capacity back into metropolitan areas.
This duality is reshaping facility design standards, utility connections, cooling system architectures and the distribution of capacity across Europe, the EUDCA report comments.
Operators are increasingly integrating digital twins, full-stack telemetest and workload optimisation algorithms to improve resilience, efficiency and sustainability performance, it adds.
HVDC power
Another potential approach for AI data centres suggested in a new white paper from the Silicon Valley-based developer of DC power infrastructure Enteligent, is to shift from traditional AC power to 800V HVDC.
Enteligent, which reports a collaboration with Schneider Electric and its partnership with the Open Compute Project and Current OS to standardise DC architecture for AI, highlights that HVDC eliminates much of the complexity and inefficiency baked into upstream AC systems by reducing the conductor count, cabling and redundant power components.
Specific findings are $4-8 million in capex savings per 10MW build by reducing upstream AC infrastructure, 8–12% reduction in annual energy-related opex through lower conversion and distribution losses and 50–80% reduction in copper usage, due to fewer conductors and less parallel cabling.
In addition, the thermal performance and reliability is improved as power density scales beyond 50kW per rack.
Sean Burke, CEO at Enteligent, suggests that HVDC power is the required foundation for the next decade of compute growth for hyperscale and AI-first data centres.
“The significant benefits across both capex and opex will be enormous as data centres scale into multi-megawatt and gigawatt operating domains.”
Chris Evanich, New Electrical Distribution Leader at Schneider Electric, adds that a turning point has been reached where power architecture is just as vital as compute power.
“The industest shift toward 800V DC power systems is driven by the necessary to increase power density inside the AI rack, which can lead to even better efficiency in the power train.”
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