MADRID (AURORA ENERGY RESEARCH)— Aurora Energy Research, a global provider of energy market analysis, has published a new report highlighting how data centres are becoming critical infrastructure in the Iberian Peninsula, driving significant growth in energy demand. Currently, data centres account Contact online >>
MADRID (AURORA ENERGY RESEARCH)— Aurora Energy Research, a global provider of energy market analysis, has published a new report highlighting how data centres are becoming critical infrastructure in the Iberian Peninsula, driving significant growth in energy demand. Currently, data centres account for approximately 2.8 TWh of electricity demand in Iberia, equivalent to 1% of the global market. This demand is projected to quadruple, reaching 12.8 TWh by 2030. According to Aurora, industrial energy demand is expected to grow by nearly 50% by 2040, with the petrochemical sector experiencing the largest increase.
The Iberian Peninsula is currently witnessing an oversupply of electricity due to high renewable energy generation relative to demand. Aurora anticipates that the arrival of data centres can help absorb this surplus energy from the grid and incentivise investment in the sector. With technological advancements and expanding connectivity, the energy consumption of data centres is set to reshape the region’s energy landscape. Key hubs such as Madrid, Barcelona, Zaragoza, Lisbon, and Sines are leading this growth, with larger and more advanced facilities under development.
Regarding energy use, seasonal variations in cooling requirements result in annual demand fluctuations of up to 21%, underscoring the need to optimise thermal systems. Advances have been made in cooling technologies, such as liquid cooling. However, despite seasonal differences, Aurora points out that data centre consumption remains stable, necessitating base-load generation technologies.
The Iberian Peninsula has emerged as a critical location for data centres, driven by several key factors. Its abundance of renewable energy contributes to low electricity prices. Additionally, Iberia''s strategic geographical location enhances its appeal as a connection point with the Americas and Africa. A well-developed fibre network provides connectivity advantages, while the availability of land offers extensive opportunities for large-scale facility development. In Spain specifically, the mature market for PPAs is a standout feature.
As data centres expand, their contribution to the Iberian Peninsula''s total electricity demand is projected to increase, reaching 11% by 2060. Aurora''s projections for Spain indicate a sharp rise in data centres demand, with consumption reaching approximately 25 TWh by 2040—a growth of 7% of total electricity demand. In Portugal, demand is expected to grow to 10 TWh over the same period. This significant growth is driven by projects such as the 1.2 GW installation in Sines and the 1.8 GW facility in Aragon, marking a shift towards large-scale operations. This trend reflects a broader movement towards electrification and industrial transformation in the region.
The rising demand for data centres highlights the urgency for collaboration between policymakers and industry to streamline permitting processes, strengthen renewable energy integration, and promote innovations in energy efficiency. Spain leads the data centre market in the Iberian Peninsula, attracting significant interest from major tech companies. Meanwhile, although Portugal has a smaller share, it is also emerging as a competitive market within the EU, thanks to its strategic ambitions.
Christina Rentell, Research Lead for Iberia and France at Aurora Energy Research commented:
"Following improvements in data centre efficiency, which have reduced energy requirements for cooling, the Iberian Peninsula has become a more attractive location for installing data centre capacity. Spain in particular stands out as an appealing location due to its mature PPA market and land availability."
The report "A shift in Iberian demand: from machinery to data centres?" is available now for subscribers. Get in touch for further information.
ABOUT AURORA ENERGY RESEARCH
Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 15 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of over 800 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to ease the global energy transition through widely trusted quantitative analysis and high-quality decision support.
MADRID, Spain and NEW YORK, USA, April 6, 2021 – MERLIN Properties SOCIMI, S.A. (MC:MRL), the Iberian Peninsula''s largest and most technologically advanced REIT and a leading developer and operator of green assets, announced today a long term, multi-phase strategic partnership with Edged Energy, a subsidiary of Endeavour devoted to net zero digital infrastructure, to build a major network of ultra-efficient, waterless data centers in the cities of Madrid, Bilbao, Barcelona and Lisbon, within MERLIN''s existing land bank.
"We service a wide range of customers, from high tech companies in our signature office buildings to international logistics operators in our warehouses," says David Brush, co-founder of MERLIN and Special Advisor to the Data Center Program at the company. "The Iberian region is perfectly positioned to be the principal gateway connecting the digital economies of Europe, North America, South America, Africa, the Middle East and beyond. This world class infrastructure platform will allow cloud and technology companies to better service and connect to a diverse customer base."
"The Iberian Peninsula is fast-becoming one of the most strategically connected places in the world with excellent fiber networks and an abundance of solar and wind energy resources," adds Jakob Carnemark, founder of Endeavor and a 25-year veteran of the industry, with more than $5B in data center built. "This region is a major focus for us as we continue building the first carbon-neutral and water-neutral global platform for data center edge infrastructure."
Both MERLIN and Edged Energy are fully committed to the green building principles. Each of the initial four data centers will consume zero water for cooling, have a guaranteed Power Utilization Effectiveness (PUE) of 1.15 annually, and use 67% less energy for cooling and overhead systems than average European data centers, which the Uptime Institute estimates to have a PUE of 1.46.
The power that each facility uses will come from local renewable energy sources, primarily MERLIN roof-mounted and ground PV installations. Each data center will also have hours of battery energy storage which will allow for 24/7 renewable energy use and will dramatically increase its reliability. The sites in Barcelona and Madrid will support up to a total of 20MW of load each, while the data center campus sites in Bilbao and Lisbon have the infrastructure to support hyperscale builds in excess of 100MW each (20MW in a first phase). "Our team has built data centers for the last 25 years, yet these are some of the best sites from a fiber and power perspective that we have seen", says Carnemark.
Additionally, Edged and MERLIN are also partnering to install a network of more than 100MW of advanced truck-charging positions to support the fast-growing shift to electric trucking.
"MERLIN is the largest logistics provider in the Iberian region and all of our clients will face competitive pressure to develop more sustainable business models. We can help them reduce their carbon footprint by building advanced EV charging stations for fleet operations that will also provide support to electric truck companies by providing access to our customer base and our investment in charging infrastructure," says Brush.
For Carnemark, "Electric trucking is a competitive imperative of booming e-commerce logistics —reducing the cost per mile of transport by more than 60% —but the infrastructure investment is clearly a major hurdle. By deploying this infrastructure as part of the Edged platform, we can better support MERLIN''s logistics clients."
Brush adds, "This partnership will allow us to provide more value to our shareholders and dramatically improve our added value offering to our logistics tenants, but it also helps us meet the needs of our most important stakeholder—the Earth."
About MERLIN Properties
MERLIN Properties SOCIMI, S.A. (MC:MRL) is the largest real estate company trading on the Spanish Stock Exchange. Specialized in the acquisition and management of commercial property in the Iberian region. MERLIN mainly invests in offices, shopping centers and logistics facilities, within the Core and Core Plus segments, forming part of the benchmark IBEX-35, Euro STOXX 600, FTSE EPRA/NAREIT Global Real Estate, GPR Global Index, GPR-250 Index, and MSCI Small Caps indices.
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About Edged Energy
Edged Energy is a vertically integrated global platform of on-demand edge data centers. Its operations are carbon and water neutral. Edged Energy is an Endeavour Company. Please visit https://.
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