The rapid growth of artificial intelligence is fuelling a surge in demand for data centre capacity in various regions worldwide, according to the latest research by Savills.
The global real estate advisor forecasts that hyperscale data centre capacity will need to double within the next four years to accommodate this increasing need.
However, energy infrastructure and grid capacity will pose significant challenges in many markets. Northern European cities like Malmo, Gothenburg, Stockholm, and Oslo are expected to be prime locations for data centre development due to their favourable energy conditions.
Savills benchmarked 68 global locations to assess the impact of energy constraints on data centre development. The analysis revealed that power capacity is often the primary limiting factor. Larger cities, with competing demands for energy, may face difficulties accommodating new data centres. Smaller cities, especially those with abundant renewable energy resources, are more likely to facilitate data centre development.
Paul Tostevin, head of Savills World Research, said: ‘Data localization requirements and the ongoing need for proximity to key markets will continue to drive development even in energy-constrained hubs. However, locations where limitations are fewer and time to market is faster are likely to benefit from the current unstoppable need for more capacity, especially as a cloud-based services such as AI have made site-selection more location-agnostic.’
Scott Newcombe, EMEA head of Data Centres, added: ‘AI is significantly transforming European data centre markets by driving increased demand for processing power and storage capacity. As organisations adopt AI technologies, they require advanced infrastructures to handle vast amounts of data. This surge leads to the expansion of existing data centres and the construction of new ones, fostering innovations in energy efficiency and cooling systems. Moreover, with stricter regulations on data protection and sustainability, data centre operators in Europe are investing in green technologies to meet compliance requirements and consumer expectations. Overall, AI is shaping a more robust, efficient, and environmentally conscious data centre landscape across EMEA.’
While data centres currently account for approximately 2-4% of total electricity consumption in large economies like the United States, China, and the European Union, their localized impact can be substantial due to their concentrated spatial distribution. In certain US states, data centres already consume more than 10% of the total electricity supply, while in Ireland data centre energy consumption exceeds 20% of the country's overall electricity usage, according to data from the International Energy Agency.
