Powering development
Mission critical and strategic sectors require uninterrupted, high-reliability power due to their impact on economic stability, national security and essential services.
Power is a critical enabler for mission-critical and strategic sectors, such as data centres, semiconductor manufacturing, battery and EV production, and bio-pharma manufacturing. In 2024, data centres consumed an estimated 415 TWh of electricity—around 1.5% of global electricity demand.¹ By 2030, Goldman Sachs expects AI adoption to push that demand up by 160%. The semiconductor industry consumed 149 TWh of electricity in 2021, and this is projected to increase by nearly 60% to 237 TWh by 2030.²
Data centres
Key drivers of high-power consumption
- Hyperscale cloud, colocation, AI and high-performance computer workloads
- 24/7 uptime, high redundancy needs
- Cooling, backup power and storage requirements
Semiconductor manufacturing
Key drivers of high-power consumption
- Clean room air filtration and conditioning
- High-powered tools, e.g. for lithography, etching, and deposition
- Miniaturisation/reduction of node sizes
EV battery manufacturing
Key drivers of high-power consumption
- Clean and dry room requirements
- Electrode coating and drying
- Cell formation
Pharmaceutical and life sciences
Key drivers of high-power consumption
- Cleanroom and HVAC for R&D and production
- Cold storage and precision manufacturing
- Continuous power for vaccine and drug production
Growing importance in site selection
In the current landscape, power availability has become more than just a utility—it is a strategic consideration in site selection and a critical factor in enabling future development, particularly for mission critical sectors.
Historically, site selection has focused on connectivity, real estate costs and proximity to a skilled workforce and end users. Now, power availability, reliability, and sustainability have emerged as key drivers, transforming power into a strategic differentiator. In the data centre sector, power influences operational resilience, downtime prevention and long-term sustainability. An Uptime Institute survey found that 52% of respondents indicated that major outages were due to power disruptions, underscoring the need for reliable power infrastructure.⁵
The growing need for energy-intensive technologies, including AI, high-performance computing as well as advanced manufacturing, presents a quandary to organisations that want to grow and innovate, while simultaneously lowering their energy usage to achieve their Environmental, Social, and Governance (ESG) objectives. As a result, there is a strong emphasis on securing sustainable and low-carbon energy solutions. However, navigating this transition is complex, as each region faces distinct challenges related to energy supply, grid quality and infrastructure.
When assessing power source feasibility for site selection, key factors include the energy mix and power generation landscape of the country, grid availability, capacity and reliability, as well as proximity to substations and transmission lines to reduce infrastructure costs. Access to renewable energy—via Power Purchase Agreements (PPAs) or green tariffs—is crucial for meeting sustainability goals, along with evaluating energy costs, carbon intensity and regulatory conditions. It's also important to consider alternative backup power options, scalability of infrastructure and utility lead times, to ensure timely and efficient deployment.
Andreas Zeus Director, High Tech Industrial
After years of stagnation, electricity demand in the EU began to grow in 2024 and this trend is projected to continue. In addition to energy efficiency efforts, project owners are placing growing emphasis on the availability, reliability, cost and sustainability of power when selecting sites for new investments.
Energy landscape
Europe’s energy landscape is undergoing a major transformation—driven by crisis response, policy shifts, and a rapid rise in renewables to reduce fossil fuel dependence and boost energy security.
This is bolstered by growing demands and net-zero targets for decarbonisation and self-sufficiency. The Russia-Ukraine conflict triggered an energy crisis, causing record-high electricity prices in late 2021 and 2022. By mid-2023, government subsidies, tax cuts, and levies helped stabilise costs, and since then Europe has reduced its dependence on Russian imports and increased renewable energy objectives.
In 2023, fossil fuels accounted for 68.7% of the EU’s energy mix, while renewables rose to 24.5%. Nordic countries made significant strides in non-fossil energy, and the UK increased its non-fossil share from 12% to 23%, from 2010 to 2023. The EU aims for renewables to account for 42.5% of energy consumption by 2030, with a target of 45%.⁶
After a decade of stagnation, EU electricity demand is rising, fuelled by AI, semiconductor manufacturing, and data centres. While net-zero efforts drive investment in low-carbon infrastructure, grid constraints and regulatory uncertainties may challenge future energy reliability and costs.¹
EU electricity demand remained largely flat from the post-2008 financial crisis until 2021. The COVID-19 pandemic and the Russia-Ukraine conflict further suppressed demand. Long-term stagnation is also driven by energy efficiency gains reducing heating demand, and structural shifts in the economy.
However, recent data shows a moderate uptick driven by rising connection requests and the expansion of power-intensive sectors, like data centres, AI infrastructure and semiconductor manufacturing. Data centre electricity consumption in Europe is forecast to rise from 96 TWh in 2024 to 236 TWh by 2035.¹⁰
The push towards net zero, reinforced by EU policy, is accelerating investment in low-carbon digital infrastructure. Despite some pauses in development, strong regulatory frameworks, cloud growth and AI deployment continue to attract large-scale digital and high-tech infrastructure investments to Europe. However, regional disparities in renewable integration, grid capacity constraints and regulatory uncertainty pose challenges that impact energy availability, reliability and cost—critical for power-intensive operations like data centres and semiconductor facilities.
Final energy consumption
Evolution over the last decade
Fell by 9% between 2010 and 2023, due to reduced demand, improvement in energy intensity of the economy and increased renewables integration into the energy system which is bringing efficiencies.⁷
Future outlook
EU aims to reduce consumption by 11.7% (compared to 2020 baseline) by 2030, in line with the European Green Deal.⁸
Energy mix
Evolution over the last decade
This represents a percentage point increase in share of renewables in final energy consumption, across the EU region which rose from 14.4% (2010) to 24.5% (2023).6 ⁷
Future outlook
Binding target of 42.5% renewables for energy (including electricity generation) by 2030, with an aspirational goal of 45%.6
Electricity demand
Evolution over the last decade
Declined by 9% across the region between 2010 and 2023. As of 2023, demand was 5% below 2019 level.⁹
Future outlook
Expected to grow between 1% to 7% CAGR from 2023 through to 2030 in major economies in-region. McKinsey projects 2% CAGR due to high energy prices and ongoing deindustrialisation.3
Electricity generation
Evolution over the last decade
Fell by 8% in the EU region between 2010 and 2023.¹⁰
Future outlook
REPowerEU is targeting 72% renewables by 2030.⁸
Key considerations
High import dependency
The EU relies on both domestic production and imports for its energy needs. In 2023, the energy import dependency rate was 58.3%, up from 56.9% in 2003.¹¹ The main suppliers were the US (oil and petroleum), Norway (natural gas), and Australia (solid fossil fuel).¹¹ The UK, a net importer since 2004, saw its import dependency rise from 37% in 2022 to 40.8% in 2023. ¹² ¹³
The REPowerEU roadmap aims to reduce fossil fuel import dependency. In order to achieve this, the EU plans to increase renewable capacity by 70% by 2030, targeting 1,236 GW from wind, solar, hydro and other sources.⁸ ¹⁰
Full energy independence will take time, but projections from the US Federal Reserve paper on European Energy Import Dependency, shows import reliance could decline to between 42.7% and 52.9% by 2033.¹⁴
Aging and congested grids
Europe's electrical grid is aging, with 40% of distribution lines over 40 years old, requiring urgent upgrades to support renewable energy goals. The revised Trans-European Networks for Energy (TEN-E) regulation, effective June 2022, aims to modernise the grid as part of the European Green Deal.¹⁵
As part of the Deal, in November 2023, the EU launched a €584bn action plan focusing on smart grids, streamlined permitting, improved financing and renewable integration.¹⁶ The UK's 'Great Grid Upgrade' plans to invest £30bn between 2025 and 2029 to modernise its 1950s-era infrastructure, preparing for a 50% rise in electricity demand by 2035 and a doubling by 2050, driven by clean energy technologies.¹⁷
Grid enhancements are crucial for the energy transition and balancing pricing dynamics. Investments in substations, modern transmission lines and smart technologies will ensure reliability, efficiency, and scalability.
The chart illustrates the distribution of planned grid developments between 2023 and 2032, showing the breakdown of new additions to grid lines and upgrades to existing infrastructure in selected countries.
Grid congestion, caused by insufficient transmission capacity to meet power demand, is exacerbated by aging infrastructure, increased peak-hour demand, and decentralised renewable energy. In 2023, EU power systems saw a 14.5% rise in congestion management needs, costing €4bn.¹⁸ Northern Europe, with high renewable energy penetration, faces significant congestion, as wind and solar generation often exceed local grid capacity. To enhance grid resilience, the EU is aiming for 15% electricity interconnection capacity by 2030.¹⁹
This graph shows the volume of remedial actions for grid congestion management by country, expressed as a percentage of electricity demand. This metric indicates how much of a country's electricity demand required costly interventions to manage grid congestion, serving as a proxy for grid stress. In 2023, Germany and Spain had the highest levels of congestion management needs, reflecting significant strain on their power systems.
The map shows the grid transition index for 2024 by GLOBSEC, which evaluates the readiness of 35 European countries for the green energy transition, assessing their performance across specific dimensions: the current state of grid infrastructure, economic fundamentals, the grid state in 2030, and the adoption of enabling technologies that are critical for a successful grid transition.²⁰
The index highlights notable variation among neighbouring countries, driven by differences in energy policies and geographical conditions. Germany falls into the ‘partially prepared’ category for grid readiness, while France is classified as ‘highly prepared’. France’s extensive fleet of nuclear power plants allows it to decarbonise effectively, while Germany faces challenges due to nuclear phase out.
Spain with high renewable potential, falls under the category of a highly prepared grid, however it faces challenges particularly in relation to low interconnection capacity. In late April 2025, the Iberian peninsula experienced a 12 hour power outage across Spain and Portugal, the reason for which is still being investigated.
Permitting delays
Permitting delays significantly hinder renewable energy deployment in Europe, especially in the wind energy space. The process can take seven to ten years, impacting project costs and viability. In 2022, the average permitting time for onshore wind projects in the EU was around six years. To address this, the EU's Net-Zero Industry Act aims to streamline and harmonise permitting, targeting a reduction to 2 years.
Intermittent nature of renewables
The intermittent nature of renewables causes supply-demand mismatches, which can lead to fluctuating electricity prices. High renewable output can lower prices, sometimes turning negative, while low output can cause spikes.
There is also an increasing need for grid congestion management for renewables, as evidenced by over 12 TWh of electricity from renewable energy sources being curtailed in the EU in 2023 due to grid congestion.²¹
Addressing energy constraints
To tackle energy challenges and enhance sustainability, mission-critical sectors are adopting new ways of accessing power. These include renewable self-generation, Corporate Power Purchasing Agreements (CPPAs), heat reuse, and battery storage.
Efficient energy use is also a priority, starting with smart design and operations. Cooling, which accounts for 30-55% of a data centre's energy use, can be optimised with AI-driven systems that adjust temperature and humidity in real time, reducing energy consumption while protecting equipment. Upgraded power infrastructure, including smart power distribution units and low-voltage switchboards, ensures energy is used efficiently. Smart management tools enable real-time monitoring of power, cooling and lighting, improving performance and early detection of power issues.
Corporate Power Purchase Agreements (CPPAs)
The European PPA market surged to 17.1 GW in 2023—a 57% year-on-year jump. Corporate PPAs led the way with a total 12.7 GW of power secured. These are long-term agreements between corporate buyers and energy producers for direct purchase of electricity. Spain and Germany dominated the landscape, together accounting for nearly half of total contracted volumes.²⁰
However, permitting timelines vary significantly by country. When considering greenfield PPAs or planning near-site energy integration, it's crucial to account for local permitting timelines in feasibility and risk assessments.
Building on this momentum, 2024 saw a 14% rise in long-term CPPAs, even as overall capacity dipped. Cross-border activity also accelerated, with 13 deals totalling 497 MW signed across Spain, Sweden and Romania—highlighting growing regional integration. At the sectoral level, Information Technology continued to lead clean energy demand, securing 3.8 GW across 38 deals. It is reported that Amazon stood out as the top buyer with 1.5GW, followed by Google at 638 MW.¹⁰ ²²
For mission critical sectors, selecting the right CPPA is pivotal in balancing sustainability goals with operational efficiency. Factors like energy price volatility, renewable generation sources and grid infrastructure constraints must be thoroughly analysed. Long-term contract durations, often spanning 5–20 years, should align with both sustainability strategies and energy procurement plans.
Emerging alternative energy solutions
Mission-critical sectors must incorporate forward-looking power feasibility planning in site selection and business expansion to hedge against external energy supply shocks. This is why many are exploring innovative power alternatives including on-site power generation using renewables or conventional power. To ensure consistency of power, on-site renewable generation combined with battery storage can help to reduce exposure to grid instability, in addition to supporting ESG and net-zero goals.
Small modular reactors are attracting interest from investors, although the technology is in an early stage and has several challenges to overcome. Battery Energy Storage Systems (BESS) are experiencing a boom across Europe and are becoming increasingly interesting for application in data centres and manufacturing sites. These cutting-edge technologies aim to reduce emissions, enhance energy efficiency, and align with renewable energy goals.
Sources
- IEA- Energy and AI Report, Published April 2025, Licence CC BY 4.0; IEA Global Energy Review 2025, published March 2025 Licence CC BY 4.0;
- Semiconductor industry electricity consumption to more than double by 2030: study, Greenpeace East Asia, April 2023; AZo Nano: Editorial Feature :Resource 3 Consumption in the Semiconductor Industry, December 2023
- Bringing energy efficiency to the fab, McKinsey & Company
- Energy technology in battery cell production: Efficiency, innovation, sustainability, Fraunhofer Research Institution for Battery Cell Production FFB, May 2024
- Uptime: Frequency and severity of data center outages on the decline, Data Centre Dynamics Ltd (DCD), April 2024
- Renewable energy targets, European Commission
- Primary and final energy consumption in the European Union, European Environment Agency, January 2025
- Energy efficiency targets, European Commission
- Electricity 2025, IEA, Published February 2025, Licence, CC BY 4.0
- Global Electricity Review 2024, Ember, May 2024
- Shedding light on energy in Europe – 2024 edition, Eurostat
- Energy imports and exports, House of Commons Library, UK, Briefing Paper Number 4046, October 2018
- Digest of UK Energy Statistics (DUKES): energy, Chapter 1, GOV.UK
- European Energy Import Dependency, Board of Governors of the Federal Reserve System, April 2025
- Trans-European Networks for Energy, Eurostat
- The EU’s Grid Policy Framework, Ember, September 2024
- The Great Grid Upgrade, National grid 2025
- Capacities for cross-zonal electricity trade and congestion management, European Union Agency for the Cooperation of Energy Regulators, July 2024
- Electricity interconnection targets, European Commission
- Ready, Set, Go: Europe’s race for wind and solar, Ember, July 2022
- ACER - Transmission capacities for cross-zonal trade of electricity and congestion management in the EU, May 2025
- Renewable market outlook 2025, Pexapark
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