Integration of Digital and Energy Transitions

• The digital revolution and energy transition must be approached as a unified challenge.
• Binding these sectors early will improve strategic planning and investment outcomes.

Capital Markets & Investment Challenges in Europe

• Europe lacks a unified capital market (unlike the US), which impedes massive infrastructure investment needs (~trillions by 2040).
• Calls for a Capital Markets Union (CMU) to accelerate capital deployment.
• Asset-Backed Securities (ABS) seen as part of the solution – but underdeveloped in Europe.

Uncertainty in Data Centre Energy Demand

• Energy demand from data centres is highly uncertain, with wide forecast ranges (up to 1,400 TWh by 2030).
• Poor coordination on grid access and renewable siting (e.g. solar vs. data centre proximity) limits efficiency.
• Co-location of data centres with renewables and batteries seen as a major opportunity.

Data Centre Infrastructure Bottlenecks

• Long lead times for equipment (e.g. transformers take 24–36 months).
• Permitting delays and national regulatory complexities hinder project execution.
• Modular and flexible build-outs proposed to improve speed and cost-efficiency.

Financing and Yield Challenges

• Harder to finance long-term, large-scale data centre projects in Europe vs the US.
• Europe struggles to hit competitive yields (e.g. US: ~10% yield vs. lower in EU).
• Equity capital recycling and improved access to pension capital are needed.

Competition Between Digital and Energy for Capital

• Digital infrastructure threatens to absorb disproportionate capital at expense of energy and general infrastructure.
• Distortions in the US seen where data centres attract higher valuations than riskier energy projects.

Strategic Concerns: Sovereignty, Defence & AI Leadership

• Europe at risk of falling behind the US in tech infrastructure and AI.
• Local data centres are vital for sovereignty, defence, latency, and public trust.
• Concerns over governments not supporting the sector adequately (e.g. €60bn investment at risk in Spain).

Private Wire & Colocation Opportunities

• Private wire networks and behind-the-meter solutions offer major cost and efficiency benefits.
• Closer collaboration between energy developers and data centres could unlock shared grid, export/import, and battery synergies.

Efficiency & Energy Waste in Data Centres

• Data centres can waste ~50% of incoming energy.
• Divergent views: some see lack of focus on efficiency, while others highlight active energy optimisation via capex and EUE tracking.

Risks of Boom & Bust in Data Centre Sector

• Overbuild risk, potential demand shortfalls, or disruptive technologies could trigger bust scenarios.
• Analogies drawn to past fibre investment cycles with poor design/planning.

Policy, Pricing & Permitting Imbalances

• Higher power prices and permitting hurdles make Europe less attractive for global data centre siting.
• In contrast, US remains appealing due to ease of permitting and lower energy costs.

Battery & Grid Innovation

• Integration of BESS and smart PPAs could strengthen energy resilience for data centres.
• Digitisation of grid and new balancing mechanisms seen as key future solutions.

Hyperscaler Influence and Market Dynamics

• A few major hyperscalers dominate a secretive energy market with different priorities:
  • 1st: Speed of connection
  • 2nd: Reliability
  • 3rd: Cost
  • Green energy is a low priority.

Summary 

• In order to position itself for success the market must:
  • Unify capital markets
  • Accelerate permitting
  • Support co-location models
  • Balance digital vs. energy investment
  • Recognise data centres as strategic assets for defence, tech leadership, and economic resilience