A lot has been said about the intense competition and building of new data centers. This is a global phenomenon, which is driving changes not only in the IT industry, but in entire regions’ policies. Europe has a chance to take advantage of this dynamic moment and to attract more investments towards new digital infrastructure and data centers.
As such, the European Data Centre Association (EUDCA) has issued its inaugural report called “State of European Data centers”. “The State of European Data Centres 2025 will be one of the first comprehensive data-driven reports on the entire European Data Centre industry. It marks a new era of collaboration and data reporting based on insights from experience, operational records, and identifying future opportunities. The European Data Centre Association (EUDCA), a non-profit organisation, commissioned the European-wide study with the objective of creating a solid, reliable data set that independently qualifies and quantifies the sector’s impacts on the European economy, data sovereignty, societal development, and environment”, says EUDCA in its report. So, let’s explore what the State of the European Data Centers is.
A lot more facilities than you might expect
It’s not a surprise to say that the demand for data center capacity in Europe is rising constantly. It’s a given, considering the rapid developments of AI, the increase of cloud and computing demand by organizations, end users’ expanding consumption, etc. The digitalization of economies is continuing and robust digital infrastructure is now a top priority for them.
Naturally, data centers play a vital role in this infrastructure. And in Europe they are a lot more than you may think. The report counts a grand total of 10 539 data centers of all sizes and capacity. Of them 19 are hypescale. Naturally the vast majority are smaller, between 50kW and 0.5MW of capacity. Those are 6342. Also, 9052 are for enterprise uses. A further 1403 are for colocation and 64 are for scale colocation.
“Data centres significantly contribute to Europe’s socio-economic landscape. In 2023, colocation data centres alone accounted for €30 billion in GDP, with forecasts predicting €83.8 billion by 2030, alongside the creation of thousands of direct and indirect jobs”, says the report. It’s clear the majority of facilities are small, while colocation data centers dominate the larger ones (5MW or more). Enterprise ones remain common, but smaller, which is expected – a lot of organizations still prefer to use their own data centers or rent local ones.
“The European colocation market is rapidly expanding, with diverse growth patterns across regions. The FLAPD countries dominate as central hubs due to their connectivity and established infrastructure, representing over 70% of Europe’s IT power supply”, the report notes. “The market is increasingly leaning toward scale colocation to meet demand from hyperscalers and AI workloads, with investment well exceeding €100 billion by 2030. Despite this growth, power constraints, regulatory hurdles, and sustainability challenges remain critical issues, shaping the future trajectory of the sector”, it adds.
The report also finds out, that investment in hyperscale infrastructure is accelerating, particularly due to advancements in AI and increasing demand for cloud services. By 2030, the total investment in hyperscale data centres in Europe is projected to exceed €40 billion, with an average annual IT power supply growth of 11%, reaching 5,6 GW.
Challenges remain
Of course, it won’t be a smooth road all the way to success. There are still a lot of significant challenges that remain. More than 75% of survey respondents consider access to power as the biggest challenge for the sector in the next three years, despite a willingness to invest in alternative solutions to access power. Over 50% expect to have grid stabilisation/energy trading in place.
36% of respondents also point to regulatory compliance as a serious challenge. 34% think of permitting as a hurdle as well. Respondents are also worried about high energy prices, adapting design, finding enough skilled technical staff, sustainability, and more. They are also thinking about possible supply chain disruptions, finding suitable locations and more. In order to address these challenges, coordinated efforts in grid infrastructure improvements, streamlining regulatory processes, and investing in education and diversity initiatives to develop a skilled workforce are required, the report noted.
“While the sector already employs thousands of people and contributes significantly to the GDP growth of Europe, it still struggles to be considered an attractive career option, with more than 50% of survey respondents considering the lack of data centre-oriented studies as the main cause for shortages of people in the industry”, the report adds.
It seems it has to work better on sending the right message. Especially since data centers have a “significant socio- economic impact in Europe. The most important contribution of data centres is providing the digital infrastructure required to build the digital economy”, the report notes. But is that being realized by Europeans?
In reality, most don’t think of data centers as driving forces of the economy. For most people these big facilities are “what makes the Internet happen”. The industry needs to do more to send the message that:
“Digitalisation makes enterprises more efficient and competitive: It empowers employee productivity, finds new solutions to old and new problems, and allows national governments and the public to build new value-added services and develop entirely new business models. These “downstream effects” are key to modernising the European economy, enabling it to “stand on its own feet”, as per the report.
So, what does the future look like
It’s dynamic. That’s the short answer. The longer one is that it will feature a lot of changes as data centers will have to both grow and improve their capacity and capabilities, but also navigate through the challenges. So, they will have to also find and develop the needed skilled workers, for example. And to continue to improve on their sustainability goals. Those remain key for the industry.
“By 2026, new data centres with an energy capacity of 1 MW or more must reuse at least 10% of their heat, increasing to 20% by 2028, or establish contracts to supply heat to district heating networks. Currently, 31% of colocation and hyperscale data centres, as cited in the report, have the capability to provide heat coupling, with 38% investing in such initiatives. Sustainability is a core commitment of the European data centre industry. This is demonstrated by initiatives such as the Climate Neutral Data Centre Pact (CNDCP), the voluntary initiative launched in2021 by leading data centre operators and cloud providers. It focuses on several key areas, including improving energy efficiency, transitioning to 100% renewable energy, reducing water consumption, promoting a circular economy by reusing and recycling equipment, and reducing greenhouse gas emissions”, the report adds.
Currently 94% of the data centers’ energy is already sourced by renewable sources. 22% of data center operators are providing grid stabilization or energy trading services. This niche is of particular interest for operators and is expected within two years 59% of them to be actively participating in it. Also, 28% of operators have already invested in on-site renewable energy generation and 41% are planning to do the same.
As for the cooling, 41% of colocation data centers are using liquid solutions already. Within two years that number is expected to jump to 84%. Also, about half of the operators are already utilizing residual heat from their data centers. A further 38% are planning to implement the approach within two years.
As for skilled workers, the industry needs 100 000 trained engineers within five to seven years, if it wants to double or triple its market. Currently it’s not possible to provide this amount of workers in that timeframe. The EU can help by establishing apprenticeship programs and helping with the training and reskilling of workers.
Now is the time
Europe remains a very attractive environment for investments in digital infrastructure. It has all of the main qualities and covers the major factors operators need, Michael Winterson, Secretary General of the EUDCA, told Data Center Knowledge. The region though needs to better emphasize those qualities.
“It is time for us to say: We are a safe and a good place to invest. We will respect human rights. We will respect data rights”, he adds. Even regulations, which are normally seen as EU’s weak side because they are so complex and that may be a deterrent for companies, are not that scary, says Winterson. “A lot of companies are saying, ‘Wait a second, Europe is actually not a bad place to invest’,” he said.
With that said, more can and should be done by the EU on regulations and its desire and abilities to help the data center industry. For example, a much needed step would be better clarity on EU’s plans for addressing the skills shortage, solving the regulatory challenges and giving an overall better and decisive political messaging.
“All Ursula von der Leyen has to do is say we hear you loud and clear, and we are going to fix these things. If that was the one thing said in the next few months, I think you would see a lot more investment money coming into Europe”, Winterson says.