BY UE STUDIO
Updated Friday,3November2023 - 13:14
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QUESTION. Data centers are booming all over the world. Do you think Spain has the potential to become a major data center hub in Europe?
ANSWER. For a few years now, Spain has already positioned itself as a major data center hub in Europe. Our country is one of the main points of digital interconnection in Southern Europe. Our geographical location between Europe, Africa and America has a solid network of connections (both land and sea) and one of the best logistics infrastructures in the world, which makes us a strategic place for the development of this industry.
Q. Are there many investors interested in building data centers in Spain?
A. Yes, there are many investors and companies in the sector interested in building their data centers in Spain and in fact they have been investing for years. Colocation companies such as Interxion, Globalswitch, Nabiax, Data 4 and Equinix, among others, have been growing substantially with new infrastructure. Likewise, hyperscalers such as Amazon, Meta or Microsoft have established themselves in Spain with large Data Center campuses; and new specialized investors/developers, such as AQ Compute, are already executing their projects and thinking about the next one.
Q. What are the prospects?
A. Definitely, the forecast is that this investment will continue to grow in our country. According to the forecasts of Spain DC, the Spanish data centre employers' association, our country will multiply its installed capacity by six by 2026 and will rub shoulders with the main European markets. The direct investment that our country will receive between now and 2026 will be around 7,000 million euros plus another 10,000 million indirectly. To cope with this growth we are going to need a large number of qualified personnel. It is estimated that in 4-5 years more than 2,000 professionals will be needed.
Q. What are the main challenges facing the sector?
A. Currently I believe that there are three important challenges to be faced: the supply of electrical power, which we will talk about later, the administrative procedures: The administrations are slower than the progress of the sector and sometimes the administrative obstacles mean delays, but the important thing is that they are going in the same direction. They know the importance of this sector for the growth of our country and have no doubts about the need to support it, and the third challenge is sustainability, as there is more and more regulation at European and global level, but the commitment of the sector is total and absolute. In fact, it is the only sector in Europe that has signed a pact for climate neutrality by 2030 and is acting on that commitment.
Finally, the sector also has another less technical challenge, but just as important, which is that of information and greater knowledge of it by the general public. There have been many negative publications about this industry presenting it as the great consumer of energy and therefore not sustainable and that, in addition, it generates few jobs and all this is false. Society must know what a data center is and what it is for, and the need to have them is vital because today without them we could not do practically anything we do on a daily basis.
In terms of sustainability, we have already highlighted that it is a highly committed sector and that, in Spain, it has been consuming energy from renewable sources for some time. In terms of jobs, perhaps directly in a data center infrastructure, direct jobs are few, but the indirect impact of the implementation of a data center is exponential and we have already mentioned the need for qualified personnel related to the sector that will be needed in the next three years. I don't think it's negligible. In fact, as a source of indirect employment generated related to data centers, we are a clear example of what we are talking about, as we are having serious problems finding available specialized engineers and what we are doing is uniting engineering companies to be able to deal with the volume of work related to data center projects.
P. Data centers are especially energy-intensive. Are Spain's electricity grids ready? What is the challenge in electricity consumption and supply?
A. Regarding the consumption of data centers, global figures are used to explain this consumption that have nothing to do with the case of Spain.
While the energy consumption of data centers is around 2% worldwide, in Spain and according to data from Spain DC, it does not reach 0.2%. and much of this energy consumed comes from renewable sources and the commitment of our sector in Spain is to self-generate in a few years. We are not a problem for energy consumption in Spain.
On the other hand, our country does not have a problem of energy production but access to it. but it is not something that affects only Spain, but is general throughout Europe.
Despite having one of the best electricity grids in Europe, we believe that we should invest in new infrastructures or distribution and transmission networks to meet not only the demand for power by data centers but also the rise of renewables in order to comply with the decarbonization regulations that will lead us to a digital economy. sustainable and more robust. In this sense, it is important to maximize public-private collaboration to avoid bottlenecks in access to energy.
Q. Do you think that the problems of network saturation that are arising in the Community of Madrid will increase?
A. I'm not an expert in power grids and maybe you should ask Red Eléctrica that question directly, but as far as I know it's a matter of planning. It is important to identify the real projects and their needs, not only in terms of potential but also in terms of timings in order to be able to schedule the supply. The Community will progressively have the power to absorb all the projects.
Q. Can it pose a risk for the cancellation of projects and the departure of investors to other countries? Will it scare away investment?
A. Companies and investors who want to come and invest in Spain in Data Centers are well informed about the situation in terms of power and electricity supply. Most of the time, after approval of the investment, studies are carried out to determine the power that they will be able to obtain and when through a letter of intent by the electricity suppliers. In this way, whoever decides to invest in Spain has that prior information and therefore if they decide to make the investment it is that they accept the terms so, unless something unexpected happens, the projects are not cancelled once this procedure has been passed. Besides, as I said before, this supply problem is not only in Spain but also in the rest of Europe, so there is no "paradise" for data centers to flee to in search of that immediate supply of electrical power.
Regardless of this, there are two other important factors that indicate that investment is not only not being scared away from Spain but is consolidating:
(a) Offshoring. Many data center campuses are already being established in regions other than the Community of Madrid, such as Zaragoza, Catalonia, Valencia, Andalusia or the Basque Country.
b) The tendency towards self-production and direct self-consumption of renewable energies, which will avoid dependence on the current electricity grid.
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