Could The Data Center Boom Come Back To Haunt Europe?

Europe is racing to power the artificial intelligence boom as an energy crisis exposes the continent’s growing dependence on imported fuels.

The European Union wants to at least triple its data center capacity over the next five to seven years as it attempts to compete in the global AI race, according to the European Commission’s AI Continent plan. Europe’s lack of refining capacity and dependence on foreign imports to meet its energy needs complicates the picture, however, with net imports accounting for roughly 57% of the EU’s energy needs in 2024.

“The EU’s goal for rapid AI expansion is headed on a collision course with its ‘Green Deal’ climate policies, which heavily restrict new baseload power generation - either natural gas, coal or nuclear,” energy analyst David Blackmon told the Daily Caller News Foundation. “The data center industry figured out two years ago that unreliable intermittent generation (wind and solar) cannot meet its 99.999% uptime requirements even with battery backup. Natural gas quickly evolved into the generation of choice for a variety of reasons, and that isn’t going to change. ”

Brussels plans to build seven multi-billion-dollar “gigafactories” in the coming years, Politico reported. Data centers consumed roughly 68 terawatt-hours of electricity across the EU in 2024, according to the European Commission, which projects demand will climb to 114 TWh by 2030, accounting for roughly 3.2% of the bloc’s total electricity demand.

“[I]ntegrating data centres in the energy system in a sustainable way is key to contribute to security of supply and exploit their benefits for system integration,”Anna-Kaisa Itkonen, the European Commission spokesperson for Climate Action and Energy, told the DCNF. “This is what we put forward in the Strategic Roadmap on digitalisation and AI for the energy system in June.”

“Data centres, especially new generation data centres, are major consumers of energy. This is no secret,” Itkonen said. “The EU is making sure that their growth is well managed – in a way that does not put our energy system at strain.”

“It is worth remembering that data centers can also tailor some resources to improve the stability of grids or tap into their potential as sources of waste heat,” Itkonen continued. “To give you a number, reusing around half of all waste heat from data centres can cover the total heating demand of almost 4 million households in Europe.”

Google’s planned hyperscale data center in Kronstorf, Austria, could eventually draw electricity from the country’s power grid equivalent to roughly 7% of Austria’s current power demand, according to Politico. The facility is expected to rely on the existing power grid rather than an on-site or direct fuel supply, such as the natural gas pipeline arrangements being explored for some data centers in the U.S.

“We are facilitating a collaborative framework of Member State authorities, data centre operators and stakeholders (including grid operators, energy suppliers, clean technology and solutions providers, and waste heat off-takers) in the form of tripartite agreements,” Itkonen told DCNF.

“They will also focus on increasing the use of renewable energy to power digital infrastructure, including data centres, thereby reducing dependence on fossil fuels and lowering greenhouse gas emissions,” Itkonen said. “In addition, we have set up a European database to gather data the sustainability of the sector. Such Register is a first of its kind, there was no such system in place at EU or Member State level before.”

Europe’s energy challenges have intensified amid wars in Iran and Ukraine. The Iran conflict has constrained oil flows through the Strait of Hormuz, while Ukrainian attacks on Russian refineries have further pressured global fuel supplies. (RELATED: Diesel Prices Now Higher Than They Were Under Biden)

The Group of Seven (G7) agreed to release 100 million barrels of crude and diesel reserves Friday in response to a potential U.S. diesel export ban, Reuters reported. President Donald Trump floated the idea of a ban in recent weeks, which he ruled out hours after the G7’s release.

The immediate crisis was triggered by geopolitical disruptions, but Europe’s exposure comes after years of declining refining capacity on the continent.

Thirty-five European refineries have closed since 2009, cutting refining capacity by approximately 20%, according to FuelsEurope, the trade association representing the European refining industry. The EU’s natural gas production has plummeted since the 1990s.

European refining capacity has declined roughly 17% since 2000 while capacity in Asia increased approximately 74%, according to an April analysis from BNP Paribas. Europe’s dependence on imports has grown as a result, with imported supplies accounting for approximately 35% of its diesel consumption, according to the analysis.

Europe lost roughly a quarter of its diesel and jet fuel supply following disruptions to Middle Eastern exports after Iran closed the Strait of Hormuz earlier this year, Reuters reported in September. Fuel inventories subsequently fell to their lowest level in 12 years.

The European Commission announced in July that it wants Europe to become the world’s first “electro-powered continent,” aiming to increase electricity’s share of total energy consumption from approximately 23% today to 46% by 2040. The strategy calls for electrifying transportation, buildings and industry while Europe also races to construct AI infrastructure.

Europe has spent years shifting its energy system toward renewables as the EU seeks to cut greenhouse gas emissions 55% by 2030 and reach climate neutrality by 2050. EU rules target zero tailpipe emissions from new cars and vans by 2035, require new buildings to meet a zero-emission standard beginning in 2030 and extend carbon pricing to fuels used in buildings and road transportation.

Germany closed its final nuclear reactors in 2023, even as the energy crisis had forced the country to lean more heavily on coal. France, meanwhile, has maintained its reliance on nuclear power, which accounted for 67.3% of the country’s electricity generation in 2024.

Brussels has also imposed increasingly stringent climate rules across transportation, buildings and household equipment. The bloc has targeted zero CO2 emissions from new cars and vans by 2035, adopted new requirements aimed at transforming its building stock into zero-emission buildings by 2050 and restricted fluorinated gases commonly used in refrigeration and air-conditioning equipment.

Data centers consumed approximately 21% of Ireland’s metered electricity in 2023, surpassing the 18% consumed by urban households, according to Ireland’s Central Statistics Office, which found data center electricity consumption increased 20% in a single year. Grid operator EirGrid has since implemented a dedicated process for connecting new data centers to the country’s electricity system, including technical assessments of proposed facilities.

EU Energy Commissioner Dan Jørgensen recently urged member states to consider measures reducing gas and electricity consumption “for as long as necessary,” arguing that lower demand could help contain prices amid constrained global supplies, according to POLITICO.

“As long as Europe remains dependent on fossil fuels, our energy prices will be volatile and leave us exposed to geopolitical developments,” Itkonen said. “Digitalising the energy sector is a strategic imperative to secure tech sovereignty and it’s a key tool to integrate more clean energy and lower prices for Europeans,”