Europe Data Center Power Market Landscape 2024-2029

INDUSTRY OVERVIEW

The Europe data center power market by investment was valued at USD 4.21 billion in 2023 and is expected to reach USD 6.97 billion by 2029, growing at a CAGR of 8.76% during the forecast period. Growing investments in cloud and colocation services boost demand for next-gen generators worldwide. Notably, Europe, including Frankfurt, London, Amsterdam, Paris, and Dublin (FLAP-D), Russia, Sweden, and have ramped up advanced power infrastructure adoption in 2023 and 2024, while Denmark, Balkans, Poland, and other developing European nations are just beginning to integrate these advancements. Furthermore, in 2024, global investors are set to drive major mergers and acquisitions in the data center sector, spurred by AI's growing demand for digital infrastructure. This surge will likely boost the development of renewable-powered infrastructure to meet AI's energy needs and improve IT efficiency. Regions like Ireland and the UK are expected to see a rise in UPS and generator markets to address power availability challenges. Also, the Netherlands & Ireland are leading the Europe data center power market in adopting fuel cells for data centers due to cost efficiency amid rising energy prices. SK Ecoplant, Duke Energy, Honda & Lumcloon Energy plan to build Europe’s first gas-powered fuel cell data center in Ireland. The rise of fuel cell generators poses a significant challenge to diesel generator systems, which are projected to gain widespread adoption by 2025 all over the globe.

KEY HIGHLIGHTS

1. In the ever-changing world of data center operations, a noticeable trend toward sustainability is growing, pushing the adoption of novel solutions. One such idea is the integration of fuel-cell generators to meet the high-power demands of data center facilities. For instance, NorthC Data Centers installed 500kW hydrogen fuel cells at its new Groningen data center, using green hydrogen for backup power. The company plans to explore this eco-friendly technology at other data centers in the Netherlands.
2. AI adoption is skyrocketing across Europe, especially in the FLAPD industry, fueling a rise in AI data centers. To meet the high energy demands, operators like Vantage Data Centers, Telia, CoreWeave, Microsoft, and Equinix may collaborate with power infrastructure vendors in the coming years to find better renewable energy solutions to meet their sustainability needs.
3. Due to the ongoing Russia-Ukraine conflict and geopolitical tensions, supply chain disruptions in Europe may extend lead times for data centers and construction, impacting infrastructure availability. Data center operators might explore alternative strategies to minimize these disruptions and mitigate future outages and losses.

SEGMENTATION INSIGHTS

1. Diesel generators are still the most popular choice for procurement data centers in the European data center power market, but some facilities are switching to gas generators. For instance, NorthC Datacenters has chosen INNIO’s Jenbacher H2-ready engines for emergency backup power at its new Eindhoven facility. Six of these engines will run on natural gas or hydrogen and provide carbon-free power during grid outages.
2. European data center operators increasingly invest in UPS batteries like lithium-ion, Prussian blue sodium-ion, and nickel-zinc. Additionally, VRLA batteries are also gaining popularity in the Europe data center power market.
3. In the European region, especially in FLAPD regions, due to rising land and power constraints, governments have banned the construction of data centers, impacting the market of UPS and generators in the data centers market and adopting sustainability fuels and initiatives. For example, in Ireland, EirGrid temporarily halted new data center projects in the Dublin region until 2028 due to grid limitations. New applications will only be reviewed for other areas of the country on a case-by-case basis.
4. The Europe data center power market by generator type in the U.K., Ireland, Sweden, and the Netherlands stands out for its innovation in diverse fuel sources like DRUPS, fuel cells, and natural gas. Leading companies, including Hitachi Energy, FuelCell Energy, Bloom Energy, Panasonic, and Toshiba, provide cutting-edge solutions that boost data center efficiency.

GEOGRAPHICAL ANALYSIS

1. Western Europe is a rapidly growing market for data center development, driven primarily by the U.K., Germany, and France. Despite some investment restrictions in Ireland and the Netherlands, there's notable growth in greenfield and modular data centers. The region, however, faces land and power constraints in 2023, especially in FLAPD regions, with Ireland's EirGrid imposing a de facto moratorium on new data centers.
2. Data center operators favor the Nordics for their cooler climate, which lowers cooling costs and improves PUE. Additionally, they are partnering with renewable energy providers, like Telia and Telenor’s PPA with Better Energy for a Danish solar park, to enhance sustainability and reduce carbon emissions.
3. In 2023, data center investments in Central and Eastern Europe surged, particularly in Russia, Norway, and emerging markets like Czechia. The region prioritizes renewable energy, with operators like Orange signing power purchase agreements, such as the recent one with Enertrag for its Polish operations.

VENDOR LANDSCAPE

1. The Europe data center power market is highly competitive, with major players like ABB, Eaton, and Schneider Electric leading in power infrastructure. In 2023 and 2024, Cummins and Caterpillar will dominate the Europe data center power market generator segment.
2. Data centers across Europe increasingly prefer battery types like lithium-ion, nickel-zinc, VRLA, and Prussian blue sodium-ion for their UPS systems in data centers.