Energy provide points flagged as main progress inhibitor of European datacentre market

Energy availability is the European datacentre market’s “single most essential” progress inhibitor, forcing operators to look additional afield for websites with ample renewable power to fulfill the rising demand for synthetic intelligence (AI) compute capability.

That’s in keeping with the State of European datacentres 2026 report, printed by commerce physique, the European Datacentre Affiliation (EUDCA), which revealed that the geographic unfold of datacentres in Europe is now increasing in response to this pattern.

“The sector is increasing at report pace throughout a number of areas in Europe [and] whereas the Frankfurt, London, Amsterdam, Paris and Dublin markets stay important to Europe’s digital core, progress is now more and more distributed throughout Southern Europe, the Nordics, Central and Jap Europe, and rising group of Tier-2 metropolitan areas,” the report said.

“From 2025 into 2026, Europe’s datacentre sector is reaching a structural inflection level. Demand continues to speed up, pushed by AI, cloud adoption and the digital sovereignty crucial. Nonetheless, progress is more and more constrained – not by capital or buyer urge for food, however by power availability, grid readiness and allowing complexity.”

The European colocation market continues to go from power to power, in keeping with the report, and is rising quickly as a consequence of enterprises trying to modernise their IT estates, migrate to hybrid cloud setups and faucet into AI-related compute capability.

“Scale colocation campuses – designed to accommodate cloud and AI platforms at industrial scale – are actually the first driver of recent capability additions,” the report continued. “Investments in new development are reaching new highs, with €176bn in cumulative investments anticipated in Europe between 2026 and 2031.”

The hyperscale cloud and web giants are persevering with to construct out their presence throughout Europe, with these gamers credited with driving a lot of the expansion occurring outdoors of the continent’s conventional datacentre hubs.

“The market has shifted usually from hub-centric growth to a distributed, energy- pushed location technique, basically altering Europe’s datacentre geography,” the report said.  

And whereas the demand for cloud providers stays a robust supply of datacentre market progress, enterprise appetites for AI providers are inflicting what the report described as “hyper-expansion” to happen within the sector.

Nonetheless, points round energy availability and safety danger hampering how a lot progress can happen, the report continued: “The continued problem of entry to energy is holding again a whole lot of investments [and] consequently, whole datacentre energy will be unable to triple as required, in keeping with the European Union.”

The report additionally noticed operators quizzed on what they suppose would be the greatest challenges for his or her organisations over the subsequent three years, with entry to energy rising as their greatest concern with 67% of the vote, adopted by allowing points (44%), sourcing technical employees (39%) and excessive power costs (30%).

The report additionally highlighted the socio-economic influence of the European datacentre market, and concluded the sector contributed €53bn in GDP in 2025, which is a determine that’s predicted to rise to €137.5bn by 2031.

EUDCA secretary normal Michael Winterson mentioned that whereas the market shouldn’t be with out its challenges, the “distinctive progress” it’s on the right track to attain is welcome information.

“As soon as the problems of energy availability and entry are addressed, Europe has the chance to guide globally in AI-ready infrastructure whereas sustaining the very best requirements of sustainability and accountable stewardship,” Winterson added.