Spain and Portugal Data Center Boom Faces Grid Bottlenecks

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Or sign-in if you have an account.(Bloomberg) — Spain and Portugal are experiencing a significant data center boom, but constraints around electrical grid capacity, network access and permitting are slowing the pace of new project development.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAlthough 10.5 GW of data center power capacity has been announced across the Iberian Peninsula, only 4.5 GW is considered “active,” meaning it’s tied to identifiable projects backed by institutional capital and development capability, according to a new report published Thursday by real estate consultancy CBRE. As a result, around 57% of the announced capacity faces uncertainty over whether it will ultimately be delivered.This is mainly because bottlenecks, including limited electrical grid capacity and permitting constraints, are slowing down timelines. Demand for data center capacity exceeds what the electricity infrastructure and permitting system can currently support.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againIn Spain, the grid is nearing saturation, with almost 90% of the electricity network having little or no remaining connection capacity. Rising electrification, together with growing demand from large consumers, is adding even more stress after years of limited investment in network expansion.Power availability has become the central factor in determining where data centers are built, according to the report. Rather than concentrating solely around traditional hubs, developers are increasingly locating projects where large amounts of electricity are available. Major investors include hyperscalers like Amazon Web Services Inc., Microsoft Corp., Google LLC and Meta Platforms Inc.According to CBRE, the Iberian Peninsula’s renewable energy resources, available land and strategic location have helped make the region an attractive destination for data center investment, despite the mounting infrastructure constraints.Consequently, Zaragoza and Sines have emerged as key hubs for future expansion. While Madrid is expected to remain the region’s largest data center market, with a projected capacity of 1.3 GW, approximately 67% of the development pipeline is expected to be concentrated in Zaragoza, Sines, and other regional markets. Zaragoza alone is projected to exceed 600 MW of capacity, with additional hyperscale projects yet to be announced.In Portugal, Lisbon is entering what CBRE describes as a “new growth phase,” with installed data center capacity increasing to 15 MW in 2025 after several years of stagnating at around 8 MW. With multiple projects currently under construction, the market’s installed capacity is expected to nearly double again by 2027.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.