News / Power supply fears rise as demand for new data centres surges

Demand for data centres is surging across Europe and the Middle East, with a host of new projects being announced, but this brings issues of energy supply, leading to suspicions that many of these projects may not see the light of day.

More than 500 data centre projects have been announced across Europe alone, which would add some 16gw of energy demand to the continent’s already stretched energy grid – while in the Middle East, 170 such projects are planned.

Martyn Lawns, CEO of global industrial projects at DHL Global Forwarding, told The Loadstar: “We are seeing growth all across Europe when it comes to data centres, and we are also seeing demand surge for similar projects in the Middle East.

“But you need a good source of power for these. So will all the data centres that have been announced be built? Probably not, not at the pace they are being announced, because you are also competing for that secure supply of electricity to run them.”

Mr Lawns noted that for projects in the Middle East, the issue of energy supply may be less pressing, thanks to the region’s large supply of oil and developments from a sustainable energy perspective.

For European projects, the issue of energy security was thrust to the fore by the war in Iran, prompting a shift to developing data centres in Spain and Portugal, where it is hoped access to solar energy may provide the energy security needed.

Mr Lawns added: “We are seeing demand for battery energy storage [Bes] units supporting data centre growth. These units weigh 40-43 tonnes, but the next generation will go up to 60-80 tonnes, and while they are the size of a 40ft container, available capacity is an issue.

“The number of fires on vessels led to IMO regulations limiting sea freight transport to putting such cargo on deck, taking capacity out of the market, and carriers also limit weight to 40 tonnes, meaning we have to charter multipurpose vessels to move the units.”

Despite the added complexity associated with Bes units, the need for them in Europe could not currently be more pronounced, as energy infrastructure has been failing amid one of the most severe heatwaves in the continent’s recorded history.

And the pressure on outdated infrastructure will only grow with the AI boom, with new data centres expected to see demand for energy leap from 12gw to 28gw, despite capacity for just a further 5gw having been announced.

Indeed, such is the demand for data centre energy supply, that it is even leading to delays in shipbuilding, with Alphaliner reporting that diesel generators used by ships are being bought in to power data centres.

Alphaliner noted: “Most data centres use large industrial diesel generator sets in the 1–4 MW range. These are designed as backup power in case of regional power outages, or to support peak electricity demand that could otherwise destabilise the local power grid.

“Marine diesels with attached generator sets have become a popular choice here, due to their proven reliability. A single Amazon data centre in Virginia, for example, uses no fewer than 93 diesel generator sets of 2,500kw each.”

This size has proved popular for data centres as the generator can be carried in a 40ft container, easing transport costs and complications, with shipowners telling Alphaliner the demand had led to challenges, including lead times and price, with the procurement of auxiliary diesels.