As the demand for data centers increases globally, the Iberian Peninsula, particularly Spain and Portugal, is emerging as a central hub for data center investment in Europe, driven primarily by the region’s rising energy needs and strategic positioning. Data centers in Iberia currently account for around 2.8 TWh of electricity consumption, making up 1% of the global market. This demand is forecasted to quadruple to 12.8 TWh by 2030, propelled by technological advancements and increasing connectivity.
One of the key factors driving this growth is the ability of data centers to absorb excess energy generated by the region’s ample renewable energy sources. Data centers contribute to grid stability while promoting further investment in the renewable sector. This surge in energy consumption is reshaping Iberia’s energy landscape, with major hubs like Madrid, Barcelona, Zaragoza, Lisbon, and Sines witnessing significant growth and larger, more advanced facilities under construction.
Seasonal variations influence cooling requirements, resulting in up to 21% fluctuations in annual demand. Despite these variations, data center energy consumption remains stable throughout the year, demanding base-load generation technologies. Advances in cooling technologies, such as liquid cooling systems, have optimized energy use, further enhancing the region’s attractiveness for data centers.
Several factors contribute to the Iberian Peninsula’s appeal for data center investments. These include low electricity prices from renewable energy, a strategic geographical location offering connectivity advantages with the Americas and Africa, a well-developed fiber network, and an extensive amount of land suitable for large-scale facilities. Spain’s mature market for Power Purchase Agreements (PPAs) is particularly noteworthy.
Looking ahead, data centers are expected to significantly increase their contribution to the Iberian Peninsula’s total electricity demand, potentially reaching 11% by 2060. In Spain, data center energy consumption could rise to approximately 25 TWh by 2040, an increase of nearly 80%. Similarly, in Portugal, demand is expected to grow to 10 TWh within the same period. This surge in energy demand is driven by substantial projects, such as the 1.2 GW installation in Sines and the 1.8 GW facility in Aragon, reflecting a shift towards large-scale operations and broader regional electrification and industrial transformation.
The article highlights the necessity for collaboration between policymakers and industry stakeholders to streamline permitting processes, reinforce renewable energy integration, and promote innovations in energy efficiency. Spain’s leadership in the Iberian data center market is attracting significant interest from major tech companies, while Portugal, with a smaller market share, is also emerging as a competitive force within the EU due to its strategic ambitions.
Aurora Energy Research’s Christina Rentell noted that improvements in data center efficiency, particularly in cooling systems, have reduced energy requirements, making the Iberian Peninsula a more attractive location for data center capacity installations. Spain’s mature market for PPAs, coupled with ample land availability, adds to the region’s investment appeal.
In conclusion, the Iberian Peninsula has grown in importance as a data center hub, supported by renewable energy abundance, strategic location, and favorable market conditions. This trend has driven significant energy demand growth, requiring strategic collaboration and innovative solutions to fully harness the potential of this development.
