Europe’s shortage of data centres could stall its growth, ING says

The delay in developing data centres in Europe could slow down the country’s growth, ING said on Monday.

During a media briefing on the bank’s position on datacentre financing and tackling significant energy demands, ING’s director of global satellite and technology Wim Steenbakkers stated the US and China that are driving this growth, leaving Europe behind.

During a briefing on the bank’s position on data centre financing and managing significant energy requirements, Wim Steenbakkers, ING’s global head of satellite and technology, said that the United States and China are driving this growth, leaving Europe behind.

He added that Europe’s slow pace could cause it to miss out on AI growth and innovation opportunities.

The ING director pointed out that the US, China and the Middle East are experiencing much faster expansion in new data centre projects than Europe.

“US is leading, with data centre growth expected to be about five times faster than in Europe,” he said.

He added that China is growing at about three and a half times the pace of Europe.

“In terms of projects, Middle East is also eclipsing Europe at the moment,” Steenbakkers said. “While there is a huge global investment of about $7 trillion expected to be spent by 2030, Europe is falling behind in data centre growth.”

According to the tech expert, it is harder to find enough land or secure enough power for data centres in Europe, and to quickly build new data centres.

“Additionally, Europe’s power grid is old as it was built around 40 to 50 years ago, and difficult to expand,” Steenbakkers added.

He also highlighted the complexity of regulations, which vary from country to country, making it more difficult to implement large projects quickly.

Commenting on the current situation in Europe, Steenbakkers said that it would be beneficial for Europe to adopt a unified approach to the development of AI and data centres.

“The UK already has such a plan with major investments, and I expect other countries will adopt similar strategies,” he said.

He also pointed out that France is better positioned than many other countries in Europe because it has extra power from its diverse energy sources.

“Currently, I think France is one of the few countries that actually has excess power due to its mix of power generation,” he said.

Gerben Hieminga, ING’s senior economist in the energy sector, also emphasised that the country’s success will not only be measured by the number of data centres, but also by its success in applying AI technology, which can be equally powerful for economic development.

“However, there are also important political questions, such as whether a region wants to be self-reliant or maintain control over its own data and digital infrastructure, which go beyond pure economics,” he said.

In an ING report set to be published tomorrow, the bank says that based on the International Energy Agency’s (IEA) baseline scenario, global data centre capacity will increase by approximately 15 per cent per year until 2030.

According to the study, the largest market in the US, Virginia, is bigger than the five largest European markets combined, with the gap set to widen in the coming years.

However, signs of progress are emerging in Europe, with plans for significant expansion in Frankfurt, Paris and London and the emergence of important second-tier markets including Madrid, Milan and Helsinki.

“Data centre and energy infrastructure are now essential for economic growth and innovation, and every country or region must have a proactive plan for developing this infrastructure, it’s not optional,” Steenbakkers said.