How much of Europe's electricity will data centers use in ten years, and who pays for the wires? Moody's Ratings has put numbers on both questions in a report covered by The Register on 13 October. In most of the large European markets, data centers took a low single-digit share of electricity in 2025, typically about 2.5 %. By 2035 the agency expects at least 5.7 % in France and the UK, up to 17 % in the Netherlands and up to 30 % in Ireland.
Ireland is the outlier and already far along: data centers used 23 % of the country's electricity in 2025, against 5 % in 2015.
The Balance Sheet Problem
The report's main concern is the grid companies. More load means more generation and more network, and under many European regulatory regimes the money spent on new lines and substations is recovered only with a delay. Moody's sees short-term pressure on the operators' balance sheets in the meantime, and more of it on transmission than on distribution, because a data center operator pays only for its own connection. The deeper reinforcement behind it lands on the transmission owner and, in the end, on every customer's bill.
The EU wants to more than triple its data center capacity within five to seven years and to move beyond the established hubs of Germany, Ireland, France and the Netherlands into the Nordics and southern Europe. The UK and France are expected to see faster growth in the number and size of facilities.
What Governments Are Already Doing
Higher grid costs and tight supply tend to raise prices, and higher prices tend to bring political measures. Moody's notes that some governments are looking at tax cuts and subsidies for end users, that a growing number of transmission operators ask for financial guarantees to filter out speculative or duplicate connection requests, and that the UK government has been considering a fee for connection applications. Price caps, extra taxes or levies could follow if the build-out keeps its present pace.
Ireland shows the harder version. The Commission for Regulation of Utilities replaced its moratorium on new data center connections with a framework under which any applicant for 10 MVA or more has to provide matching generation or storage on site or nearby, and has to cover at least 80 % of its annual demand with additional renewable projects in Ireland. Moody's expects more European governments to follow Ireland and the United States in intervening.
On-Site Plant Moves Up The List
The Irish rule is the one to watch from the plant side. Once a connection depends on generation at or near the site, the engines or turbines are no longer a backup line in the electrical scope; they are part of the permit, they may run for long hours, and their emissions, noise and cooling become planning questions in their own right. Moody's also mentions utilities reusing former fossil plant sites that already have a grid connection, which is the case for at least one UK AI Growth Zone. Old power station sites come with transformers and space, but also with neighbours who remember the old plant.
The same pattern has played out in the United States this year, from off-grid campuses in Texas to utilities building plants for single customers. For data center projects in Europe the question at the first meeting is shifting from when the grid can connect the site to what the site has to bring with it.
Sources: The Register
