Currently, almost all of the world’s IP traffic, the flow of data across the internet, goes through data centres and is not just captured once. According to the International Energy Agency (IEA), for every bit of data that travels the network from a data centre to end users, another five bits of data are transmitted within and among data centres. Data centres have, therefore, a vital role in facilitating the current and forecasted data usage and generation as data centres are used to host networked computer servers that store, process, and distribute large amounts of data.

There are currently slightly more than 1,240 data centres in Europe, totalling 8.3 million sqm of space and a power capacity of approximately 8,300 Mw. This represents about 18 watts per capita in Europe. Most of these data centres are located in Western Europe, accounting for 76% of the total power capacity in Europe, more specifically in the FLAP-D markets, named Frankfurt, London, Amsterdam, Paris and Dublin. There are over 300 data centre operators in Europe amongst all types of data centres (wholesalers, carrier-neutral colocation, bandwidth providers, proprietaries and resellers). The ten biggest operators account for 36% of the total data centre power capacity in Europe, with the biggest operator being Digital Realty (773 Mw), closely followed by Equinix (463 Mw).

New data centre developments have been rapidly increasing over the past few years. In the last five years, slightly more than 240 data centres have been completed across Europe, adding a power capacity of more than 2,230 Mw. This year alone, 56 new data centres are expected to be delivered. We estimate this will add approximately 560 Mw to the market by the end of the year. According to TeleGeography, 32 new European data centre projects are in the pipeline until 2025, which will total approximately 600 Mw. Based on these projects, we expect the European data centre power capacity to reach about 9,000 Mw by 2025.

Based on the assumption that the current European bandwidth is fully accommodated within the existing data centre supply, we estimate that by 2025, the number of data centres in Europe needs to increase nearly 2.5 times to more than 3,000 data centres (approx. 20,750 Mw). This means that the currently planned data centre developments are far from sufficient to meet the forecasted increase in demand. That said, this assumption does not consider future technological developments that will likely increase the efficiency of data centres and increase their power capacity.

Data centre operators are investing more heavily in hyper-scale data centres’ large and scalable computer architecture. The hyper-scale model provides nearly instantaneous database backups with no impact on computer resources; in other words, latency is limited whilst the power efficiency is optimised. It is also an efficient financial option for operators to increase their footprint and address the surge of digital transformation initiatives, which continues to accelerate across industries. The Sines 4.0 campus project in Portugal is a good example of the scale of future data centres. The campus will consist of nine seawater-cooled buildings totalling 495 Mw on 60 hectares of land. The project is set to become the largest data centre across Europe.

Separately, increased legislation in the more mature and interconnected markets (e.g. FLAP-D region) puts the supply of new data centres under pressure. New supply in these markets will be limited as new laws and policies regarding energy consumption, sustainability, and NIMBYism will make developing new data centres significantly challenging. However, the current data centre operators will use the limited development pipeline to adapt and improve their existing facilities to cope with increased demand levels. It is likely that new locations will be identified for the development of new data centres that are, for now, less challenged by law and policymaking.

_{Read the articles within Spotlight: European Data Centres below.}