A Data Center Tale: The Hunger for PPAs

Data centers are emerging as the largest single source of new renewable PPAs in Europe, already accounting for a third of the market. As grid bottlenecks slow traditional hubs, growth is shifting north, with the Nordics positioned to capture the next wave of large-scale clean power demand.

After the 2022 energy savings program, European electricity demand flattened on the back of efficiency gains and temporary conservation. As countries pursue decarbonization targets toward 2030, total demand is expected to resume steady growth.

The projected demand by sector shows that data centers represent one of the largest single additions to European load through 2030 – more than 85 TWh of new consumption, outpacing electric vehicles and the entire residential-commercial sector. This shift marks the emergence of the data center industry as a structural component of Europe’s power system.

Sources: IEA, Synergy Research

The Three Drivers of Data Center Demand

1. Rising digital workloads: Enterprise and consumer data volumes continue to increase, particularly in cloud storage, streaming, and industrial digitalization. Each additional terabyte processed adds incremental compute and cooling demand across regional hubs.
2. Cloud migration: Roughly half of corporate IT workloads in Europe are still hosted on-premises. Ongoing migration to public and hybrid clouds will require significant new compute capacity concentrated in large data facilities.
3. AI and GPU deployment: Training and running AI models have become the largest incremental load in modern data centers. AI clusters consume up to 25 times more power per operation than conventional workloads and require continuous uptime.

The share of hyperscalers (>100 MW) within the European fleet has grown sharply and will continue to rise as GPU clusters dominate future expansion.

Scaling Power Procurement

In 2024, European data center demand was just under 100 TWh equivalent around 19 GW of grid connected data center capacity. According to Pexapark PPA Tracker database, 13.6 GW, or 72%, is already contracted through PPAs, one of the highest clean-power procurement ratios of any industrial segment.

Source: Pexapark, Ember

Projections show demand increasing to about 236 TWh by 2035. To meet that trajectory, total connected capacity must reach 25.3 GW by 2030 and 33.5 GW by 2035. This implies an additional 11.7 GW of new contracted capacity within five years – equivalent to adding the size of the 2024 total German PPA market each year. An additional 8.2 GW would be required from 2030 to 2035.

Since 2018, 142 deals were signed by tech companies to decarbonize their operations. A capacity of 4.3 GW was signed in 2024 only, an increase of 18% compared to 2023. Currently, a third of the European PPA market is dedicated to data centers. In 2025, most data center PPAs were signed in Italy (568 MW), Finland (472 MW) Spain (314 MW) and Ireland.

This scale of procurement already makes data centers one of the largest single sources of long-term clean energy contracting in Europe. It also influences PPA pricing (as Tech companies might not be as price sensitive as industrials) and contract structures. Tech companies are increasingly seeking 24/7 clean-energy portfolios that combine solar, wind, and storage to match hourly consumption, as outlined by the agreement between Shell and Google in the UK.

Where will the demand materialize?

Several technical and economic factors determine where new data centers can be developed. Projects depend on access to low-latency fiber networks and robust digital infrastructure, as well as on stable institutions and predictable permitting frameworks. Land availability, cooling conditions, and wholesale power prices also play an important role in determining overall feasibility.
However, the main constraint is now grid connection speed. Developers increasingly prioritize locations where capacity can be energized quickly, even if power costs are slightly higher. The chart below illustrates this shift, comparing average connection lead times by country.

Source: Pexapark, Ember, IEA

Northern Europe stands out for its readiness. Sweden, Denmark, Norway, and Finland combine affordable renewable abundance, low temperatures, stable policy, and fast connection processes. From a relatively small base today, their data center load is expected to quadruple by 2035.

By contrast, legacy FLAP-D markets – Frankfurt, London, Amsterdam, Paris, and Dublin – are constrained. Connection queues average can go up 7 to 10 years, and Ireland has effectively paused new connections until 2028. The IEA Energy & AI report estimates that about 20% of planned data center projects could face significant delays if grid expansion does not keep pace.

By 2035, data centers could exceed 5% of total European electricity demand. Their expansion will drive long-term renewable contracting and accelerate the adoption of grid-connected storage. For energy, PPA, and BESS professionals, the signal is clear: data centers are now a cornerstone of Europe’s electricity growth. Success will depend on who can connect quickly, secure firm renewable supply, and operate flexibly within increasingly complex grids.

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