Datacentre growth could push up European electricity bills without intervention
Moody’s forecasts that Europe’s expanding datacentre sector could raise electricity costs for consumers unless governments intervene. Building enough generation and grid capacity to meet the facilities’ growing demand will require major investment, while the costs and timing of recovering that spending could put pressure on network operators.
Datacentres accounted for about 2.5 per cent of electricity use in most large European markets in 2025. By 2035, Moody’s estimates their share could reach at least 5.7 per cent in the UK and France, 17 per cent in the Netherlands and 30 per cent in Ireland, where it was already 23 per cent in 2025. Ireland now requires larger new connections to include matching generation or storage and to meet at least 80 per cent of annual demand through additional renewable projects in the country.
- Datacentre growth could push European electricity bills higher.
- Ireland’s datacentres may use 30 per cent of power by 2035.
- Governments could respond with price caps, taxes or connection rules.
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Datacentres are facilities that store and process digital information for companies, governments and online services. They require enormous amounts of electricity to run computers and keep them cool, making them one of the fastest-growing users of power in Europe.
Datacentres currently account for about 2.5 per cent of electricity use in major European countries, a relatively small share. However, demand is rising rapidly and forecasts suggest their share will increase substantially within the next decade, particularly in Ireland and the Netherlands.
Building the power plants and grids needed to support this growth will require billions of pounds in investment and take many years to complete. Without government intervention, the costs of these upgrades could be passed on to consumers through higher electricity bills. Some countries like Ireland have already started requiring datacentres to generate or source their own renewable energy.
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The case for
Europe faces an unprecedented challenge as datacentres could consume up to 30 per cent of electricity in some countries by 2035, creating infrastructure investment needs that private markets alone cannot adequately coordinate or fund. Without government intervention to plan capacity, align investments, and allocate costs fairly, network operators will struggle to recover spending whilst consumers face steep bills for infrastructure they did not request. Governments must establish binding frameworks ensuring datacentre operators contribute proportionally to grid and generation capacity, preventing ordinary households from effectively subsidising technology companies' expansion.
The case against
Datacentre operators already possess strong incentives to secure reliable, affordable power through long-term agreements and renewable investment, making heavy government intervention unnecessary and economically harmful. Ireland's emerging market-based approach—requiring companies to provide matching generation capacity—demonstrates that clear rules and commercial negotiation work effectively without state planning or restrictions. Aggressive intervention risks driving this economically vital sector to other regions, costing Europe jobs and competitiveness. Energy markets are sophisticated enough to signal scarcity and attract investment; government should establish transparent rules but allow competition to solve infrastructure challenges efficiently.
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Originally published by The Register as “European datacenter boom threatens higher energy bills unless governments intervene”.