For the past decade, Europe’s electricity system has been adapting to a new reality. The rapid rollout of renewable generation, electric vehicles and heat pumps has transformed the way utilities and grid operators plan and connect new customers. Distribution and transmission system operators have been redesigning connection processes to cope with an unprecedented volume of new connection requests arriving in a relatively short period.
Now, another challenge is emerging, as data centres powering artificial intelligence are becoming one of the fastest-growing sources of electricity demand Europe has ever seen. Unlike most new loads, they combine the speed of deployment seen with electric vehicles and distributed energy technologies with the very large power requirements traditionally associated with heavy industry.
For utilities, system operators and policymakers planning Europe’s electricity system to 2050 and beyond, this fundamentally changes the equation.
Two developments are now unfolding at the same time. Data centres are becoming a major new customer for the electricity sector, while utilities are increasingly using artificial intelligence themselves to operate smarter, more efficient and resilient electricity systems.
In other words, AI is becoming both a major customer of the electricity system and a critical tool for running it.
This is the central theme of Eurelectric’s new flagship initiative, The Era of Electric Intelligence. This week’s #FridayFeature explores what happens when Europe’s digital and energy transitions become inseparable, what it means for grids and infrastructure planning, and why closer cooperation between the power sector and technology companies will be essential in the years ahead.
Power for AI: why Europe’s AI ambitions start with electricity
The debate around AI is often framed around computing power, algorithms and technological leadership but increasingly it is also becoming a debate about electricity.
According to a joint Eurelectric and EY-Parthenon analysis, data centres could account for around 28% of the growth in European electricity demand by 2030. Total data centre electricity consumption is projected to reach between 149 and 287 TWh by the end of the decade.
This means that by 2030 Europe’s data centres alone could consume almost as much electricity as Spain does today (270 TWh in 2025).
This illustrates the scale of the challenge, Europe is not simply connecting more customers; it is preparing to connect electricity demand on the scale of an entire Member State, delivered at a pace rarely seen before. centres could account for around 28% of the growth in European electricity demand by 2030. Total data centre electricity consumption is projected to reach between 149 and 287 TWh by the end of the decade.
The scale of the challenge is not simply about supplying more power. It is about delivering it where it is needed, when it is needed and at the speed required by investors.
Today’s AI data centres are very different from the facilities Europe built a decade ago because they are larger, more energy-intensive and built on much shorter timelines. While a major data centre can often be developed within 18 to 24 months, securing a grid connection in some European hotspots can take between seven and ten years and that gap is becoming one of Europe’s biggest competitiveness challenges.
As highlighted in the Draghi Report, Europe’s ability to host cutting-edge AI infrastructure will increasingly depend on the availability of reliable, affordable and clean electricity, to put it simply, AI sovereignty starts with the power system.
The challenge is not that Europe lacks electricity, it’s whether infrastructure can be delivered quickly enough.
At the same time, geography is becoming increasingly important.
Traditional data centre hubs such as Frankfurt, London, Amsterdam, Paris and Dublin continue to dominate capacity. However, concentration is creating new challenges. Ireland, for example, hosts around 87% of its data centre capacity in a single city, Dublin.
As a result, investment is increasingly spreading towards Nordic countries and other emerging locations where clean power, available land and cooler climate conditions offer competitive advantages.
The question facing policymakers is how Europe can ensure they strengthen the electricity system rather than place additional pressure on it.
The twin transition commitments: utilities and hyperscalers working together
No single sector can solve this challenge alone. Recognising this, Eurelectric launched the Twin Transition Commitments at Power Summit 2026, bringing together the European power sector and leading digital infrastructure players in a joint effort to prepare for AI-driven demand growth.
Developed in partnership with EY-Parthenon, the initiative acknowledges a simple reality – the energy transition and digital transition are increasingly the same conversation.
Over the coming months, participating organisations will work together to explore three research areas:
- Data centre development – examining future demand growth, priority locations, flexibility opportunities and ways to minimise system-wide costs.
- Power system readiness – including grid expansion, advanced technologies and improved forecasting methodologies needed to accommodate growing AI demand.
- Sustainable and secure strategies – looking at new utility-hyperscaler partnerships, innovative contractual models, energy efficiency and clean electricity sourcing.
The work will feed directly into Eurelectric’s flagship Era of Electric Intelligence study planned for 2027.
What the case studies are already showing
While much of the debate around AI and electricity focuses on future challenges, practical examples are already emerging across Europe.
Several of the case studies featured in the project demonstrate how cooperation between the power and digital sectors can unlock benefits for both.
In Belgium, CTC Global‘s advanced conductor technology has helped rapidly increase transmission capacity, allowing more power to be delivered to large customers without waiting for entirely new infrastructure to be built.
In Spain, Iberdrola and Echelon Data Centres have established a joint venture to co-develop data centre infrastructure, demonstrating how energy planning and digital infrastructure development can be aligned from the beginning.
Portugal offers another example, where Schneider Electric and Start Campus are developing infrastructure designed specifically to support future AI and cloud workloads while integrating sustainability considerations into project design.
Perhaps one of the most striking examples comes from Finland.
In Espoo, Microsoft’s data centres now provide approximately 40% of Fortum’s electricity-based district heating through waste heat recovery. Rather than treating excess heat as a by-product, the project turns digital infrastructure into a valuable energy resource for local communities.
Taken together, these examples demonstrate that the relationship between data centres and electricity systems does not need to be in opposition: with the right planning and tools, both sectors can benefit.
AI for power: how utilities are deploying artificial intelligence
The story does not stop with powering AI since the electricity sector is increasingly using AI itself.
As Europe’s power system becomes more complex, utilities are turning to machine learning, deep learning and generative AI to help manage growing volumes of renewable generation, distributed energy resources and customer interactions.
The project’s AI for Power use case catalogue reveals that AI adoption is moving beyond experimentation and into day-to-day operations.
Around 70% of the case studies analysed use machine learning technologies to improve forecasting, optimise operations and enhance decision-making.
Deep learning appears in approximately 23% of the use cases examined, while generative AI is already being deployed in a similar share of projects. Even agentic AI, capable of taking autonomous actions, is beginning to emerge, appearing in around 9% of the cases.
What is particularly striking is how widely AI is being applied. It is no longer confined to innovation teams or research departments. AI is increasingly supporting generation forecasting, grid operations, trading activities, maintenance planning and customer engagement.
In many cases, it is helping utilities extract more value from existing infrastructure, improving efficiency without requiring major physical investment. As the electricity system becomes more decentralised and data-rich, AI is rapidly becoming a core operational capability.
One transition, two sides of the same coin
The Era of Electric Intelligence highlights a fundamental shift in how Europe should think about its energy and digital ambitions.
For years, the energy transition and digital transition were often treated as separate policy discussions but today, they are becoming deeply interconnected.
AI is creating one of the most significant new sources of electricity demand Europe has seen in decades. At the same time, it is becoming an essential tool for managing a power system built around electrification, renewables and flexibility.
The success of one increasingly depends on the success of the other and Europe’s challenge now is to ensure that data centre growth, grid investment, clean electricity deployment and AI adoption evolve together.
Because in the era of electric intelligence, power is no longer simply enabling the digital economy, it is becoming one of its most important strategic foundations.
This week’s edition written by: Erin Kalejs – Strategic Communications, Eurelectric
Disclaimer: This article is for communication purposes only and may not reflect Eurelectric positions. Any positions taken in this article shall not be attributable to Eurelectric’s official positioning. Official Eurelectric positions are reflected only in position papers published here.