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Why Europe’s AI Boom is Running into a Power Problem - Video học tiếng Anh
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Why Europe’s AI Boom is Running into a Power Problem
Why Europe’s AI Boom is Running into a Power Problem
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Sous-titres (178)
0:01
Global investment in data centers reached record highs in 2025,
0:06
with deals totaling more than $61 billion.
0:10
The speed at which private capital has moved into the data center and AI space is unprecedented.
0:15
And that growth is only expected to continue.
0:18
McKinsey expects that, by 2030, data centers will need $6.7 trillion in investment to keep
0:25
pace with demand for compute power, with about 70% of that demand expected to come from AI workloads.
0:31
Data centers essentially form the backbone of the internet. We're not just talking about AI,
0:35
we're also talking about the apps you use.
0:37
Data processing is basically the brains of our digital civilization. The government relies on it,
0:45
the industry relies on it, logistics, everything.
0:47
As data centers’ electricity demand worldwide is expected to double by 2030,
0:52
providers are already citing access to power as a top concern.
0:56
If I take our data center in London, for example, we had our power connection,
1:00
a firm offer, and it was then moved by a decade. So, how can you move
1:04
forward into a multibillion-pound project with a customer contract.
1:09
Across Europe, major hubs like London have
1:11
become saturated and are increasingly facing restrictions. So where to build?
1:16
We're currently building out projects in Madrid in Spain,
1:19
and also in Seinäjoki in Finland. We're looking across the Nordics in particular,
1:23
where they have cheaper power and more readily available land.
1:26
And that demand isn’t just impacting local grids.
1:29
A lot of the data center construction is basically foreign direct investment. So,
1:35
it's large multinational companies investing
1:38
in the Nordics, and as they do that, their political weight also increases.
1:44
So how are data centers redrawing Europe’s grid map? And what risks come with that shift?
1:58
“I want the future of AI to be made in Europe.”
2:01
Europe wants to become an AI powerhouse, but in order to do that, it needs to have
2:05
the infrastructure, which means it needs to have these data centers housing these
2:09
advanced GPU chips and therefore being able to contribute to AI workloads.
2:13
In order to have those data centers, it needs access to power.
2:16
Data centers used to mainly be built where the population and the industry are in Europe,
2:22
and that means in the center of the heart of Europe, the so-called FLAP-D, Frankfurt, London,
2:29
Amsterdam, Paris and Dublin. They go to where electricity is available. And now data centers
2:36
are migrating to the edges, on the one hand, to the Iberian Peninsula. There's lots of renewable,
2:41
cheap energy there. And then the very other extreme of Europe, the Nordics,
2:46
also cool air, lots of renewables, wind, hydro and great quality grid as well.
2:52
While data-center power capacity is still growing in Europe’s traditional hubs,
2:56
newer markets like the Nordics and Southern Europe are expanding at a much faster pace.
3:01
This reflects rising demand: countries with less grid congestion and shorter connection wait times
3:07
are expected to see data-center demand grow at nearly double the rate of FLAP-D hubs by 2030.
3:13
There's an absolute appetite for secondary and even tertiary markets.
3:17
As data center operators look for cleaner and more available power,
3:21
interconnectors – the high-voltage cables linking national grids – are playing a
3:25
bigger role in moving electricity across borders.
3:27
Europe now has more than 400 of them, making it the world’s largest interconnected grid.
3:32
But that system is under pressure. In December 2025, the European Commission unveiled its Grids
3:38
Package to speed up permitting for energy infrastructure. It estimates
3:42
€1.2 trillion in investment will be needed by 2040 to modernize the continent’s electricity networks.
3:49
In the Nordics, in Finland in particular, the grid, there is a lot of capacity. But even here,
3:54
there's starting to be sort of local constraints. So, for instance, there was a case in Sweden where
4:00
a local bun bakery wanted to expand, and they needed more access to the electricity
4:05
grid. And at the same time, a large data center project wanted access to the grid,
4:10
and the utility allocated it to the data center, and the bun factory was unable to expand.
4:16
These facilities are getting bigger and bigger, increasingly over one gigawatt.
4:20
One gigawatt is an enormous amount of power for a single site,
4:24
equivalent to the average annual electricity consumption of almost a million people.
4:29
In some areas, we're seeing operators face waiting times of five, eight,
4:34
sometimes even ten years to connect to the grid.
4:36
Take the U.K., for example, where last year, companies applying to connect to
4:40
the grid, there was a 460% jump in applications in a six-month period.
4:45
In order to counteract that surge, the government is considering a proposal whereby projects that
4:50
have more economic viability will get priority access, and that includes data centers.
4:55
It's really interesting to contrast that example in the U.K. with the Netherlands,
4:58
where traditionally, grid applications work on a first-come first-serve basis,
5:02
but now they're considering instead, why don't we give priority access to
5:07
other businesses that really need the power, for example, a hospital or a local school?
5:11
The European Council says expanding the grid will take both public and private money.
5:17
Traditionally, the electricity grid is considered a public utility that should be funded from public
5:23
money. And then we have these questions, well, should we use this much public money to build
5:28
infrastructure, which is then used by a small number of very large data center operators? We're
5:34
looking at ways of involving also private money in investing in improving that grid capacity.
5:41
In fact, data center providers are already reshaping national grids in several ways:
5:46
though financing, planning and even on-site power generation.
5:50
In Ireland, where data centers already account for 22% of electricity consumption,
5:54
new grid-connection rules introduced in 2025 raised the bar. Large-scale
5:59
facilities now have to provide their own generation or storage and meet at
6:03
least 80% of annual demand with new renewable projects in the country.
6:07
In 2026, digital infrastructure developer Pure Data Centre Group partnered with power supply
6:12
solutions provider AVK to switch on Europe’s first microgrid-connected data center in Dublin.
6:18
Effectively, we had a natural gas connection, but we weren't able to get a grid connection. And so,
6:24
to ensure that we could meet our customer requirements,
6:26
creating a microgrid enabled us to move our project forward.
6:29
Here, we have gas generation, we have battery storage, and we have HVO standby generation,
6:35
all layered together that's providing redundant, continuous power to the data center.
6:39
If you just go with renewables, you end up building a significant amount
6:42
of renewables and a lot of batteries, with the dispatchable power piece,
6:45
you have your main power source being renewables, but in times where the wind
6:49
isn't blowing and the sun isn't shining, you're reverting to this microgrid.
6:53
For now, the microgrid operates independently of the main grid.
6:56
But eventually, it will need to connect.
6:58
When we do finally get a grid connection, we will be able to offer dispatchable power. It
7:02
will be able to balance off the renewables that were already on the grid in Ireland.
7:06
If you think back to the days, go back 100 or so years, when electricity grids were first
7:12
being formed, they took a load of islanded, isolated assets in various villages and towns,
7:16
and they connected them together and formed national grids in different countries. We're
7:20
almost going back to that sort of stage where you might end up with these private
7:24
grids being built out because of the long ended-ness of power connections.
7:28
If we look at the evolution of preferences of the data center operators, what used to be a
7:33
number in the 5-10% range of people who are willing to consider behind-the-meter
7:37
solutions such as microgrids, that number has almost doubled in the last 18 months,
7:41
and now 20% or more are considering the use of that.
7:45
The problem with requiring data centers to be self-sufficient in terms of electricity
7:52
production is that that means they will have to use quite small-scale electricity
7:58
production. For instance, in the U.S., they're using a lot of gas turbines.
8:02
The second element is the actual reliability of the system. As we know,
8:05
data centers like to operate with five nines reliability.
8:08
Achieving that in a microgrid system,
8:10
while possible, is difficult, just from a feasibility and technological standpoint.
8:14
From the point of view of planning an industrial geography that's as energy
8:20
efficient, you really want to make sure that you're using renewables.
8:25
In Europe, a data center can take just one to two
8:28
years to build. But getting connected to the grid can take up to a decade,
8:33
which is why operators are working more closely with utilities and energy developers.
8:37
Take Spain, for example, where Amazon Web Services and Microsoft have signed long-term renewable
8:43
power deals with Repsol. These agreements help lock in electricity supply for major customers,
8:48
while giving developers like Repsol the revenue certainty to finance new wind and solar projects.
8:53
The same is true in the Nordics,
8:55
and I think the same will start to happen even in other places like Poland.
8:59
You're also seeing investment going, capacity expansion for the manufacturer of everything
9:02
from gas turbines to electrical equipment like transformers, switch gears, etc.
9:07
We're seeing a new type of investor come in who's specifically interested in the microgrid itself,
9:13
not necessarily the data center build. So, they're infrastructure funds who are looking to build,
9:18
own, and operate microgrids and supply power to the data centers.
9:21
So, who stands to benefit from Europe’s data center construction boom?
9:25
Some of the biggest winners could be European electrical equipment,
9:29
cooling and engineering firms, as well as utilities and grid operators.
9:33
Over the past year, shares in some of Europe’s biggest electrification companies have climbed,
9:38
as investors bet on rising demand from data centers.
9:41
It was a very strong start to the year for ABB, 24% order growth, data centers up triple digit.
9:48
Take Schneider Electric for instance,
9:50
where data centers accounted for around 30% of its total orders in 2025. At Legrand,
9:56
they made up 26% of revenues, and the company says that share could rise to as much as 40%.
10:03
Big tech and hyper-scalers are trying to adapt their projects to suit the
10:06
country of where they're going. A really interesting example is Meta’s Odense data
10:10
center project in Denmark. In order to get that facility off the ground,
10:14
there was upgrades and investment that needed to happen. That therefore contributed to investment
10:19
in the grid. That project also took place with a sort of waste heat-recovery program. So that
10:24
meant that excess heat from the data center was then providing heat for residential buildings.
10:29
This is known as district heating, and it’s widely used across the Nordics,
10:33
especially in cities. Data centers are becoming a growing source of that heat.
10:37
In the port city of Hamina in southern Finland, waste heat from Google’s local
10:41
data center is expected to cover up to 80% of district-heating demand from the end of 2025.
10:48
But that growing interdependence also raises new questions around reliance,
10:52
control and digital sovereignty.
10:54
Nearby in Mäntsälä, Amsterdam-based Nebius had started to recover heat waste for residential use.
11:00
Nvidia has just recently announced that they are investing $2 billion in
11:06
a Netherlands-registered AI computation data center company called Nebius.
11:12
Nebius was once Yandex N.V., the Dutch-registered
11:16
parent company of Yandex, one of Russia’s biggest tech companies.
11:19
After Russia’s invasion of Ukraine, the company came under geopolitical pressure,
11:23
sold its Russia-based businesses and rebranded as Nebius in 2024.
11:28
In April 2022, their major data center in Mäntsälä,
11:33
Finland, which was heating the city, couldn't purchase electricity anymore,
11:38
and they had to basically power down most of the operations.
11:43
The data center had to run on diesel at reduced capacity,
11:46
and its contribution to the local heating system was disrupted.
11:50
The interesting thing is, not only as a result of computation moving northward,
11:55
not only do other countries become more dependent on the Nordics, but also Nordics in terms of
12:00
basic infrastructure, like heating, become more dependent on computation from other countries.
12:07
Geography is really important when it comes to thinking about where
12:10
data centers are located and where the investment is going.
12:12
In a sort of ironic twist, one of the Europe's digital sovereignty
12:18
AI compute champions is actually a former Russian digital champion.
12:25
We have Nebius building further, very large AI computation facilities in Eastern Finland,
12:31
quite close to the Russian border.
12:33
Also, Google's major data center complex in Finland, also, hundreds of megawatts in
12:39
terms of total peak capacity, is located only about 40 kilometres from the Russian border.
12:46
As data centers migrate, the question is will these new areas of growth see
12:51
the same challenges that existed in those traditional markets? Can Europe
12:54
invest fast enough to be able to support the grid and the infrastructure around it?
12:59
A lot of the discussion around the potential return of AI in general hinges on their ability
13:03
to prove return from these data centers. Data centers also run a natural course of life.
13:08
In the area of AI compute, there's now a lot of industrial policy aimed
13:13
at supporting with public funds the construction of local capacity here.
13:19
Even if it's physically located here, a lot of the times, in terms of ownership and investment
13:26
and in terms of technology, it's still very much reliant on the U.S. in particular.
13:32
We could accept some of that inbound investment, but de-weaponize it,
13:37
make sure that it can't be used as a means of geopolitical pressuring against Europe.
