The Government wants to establish new conditions for data centers to access the Spanish electrical grid, at a time when the expansion of artificial intelligence and digital services is multiplying the supply needs of these facilities.
The main requirement is that new larger projects ensure that at least 80% of the electricity they consume is backed by new renewable generation, an obligation that companies consider excessively restrictive and that has opened a confrontation with the Ministry for Ecological Transition.
The controversy has now taken on a European dimension. According to El País, the Executive has included the approval of the royal decree regulating these facilities in negotiations with the European Commission regarding the last disbursement of the Recovery Plan, amounting to 25.861 billion euros. The incorporation of this regulation into the discussions with Brussels introduces a new element of pressure on its processing, although there is still no public confirmation that it constitutes a specific condition for receiving the funds.
The project seeks to solve a problem that goes beyond data centers. Although Spain has significant renewable generation capacity, electricity cannot always reach the places where it is requested because the transport and distribution networks have limited capacity. The Government aims to prevent large digital facilities from occupying a considerable part of that capacity and hindering the connection of industries, homes, or other economic activities that also need to be electrified.
Why the consumption of data centers is concerning
Data centers house the servers that allow for storing and processing information, providing cloud services, and developing artificial intelligence applications. To operate, they require a continuous electricity supply, both to power the computing equipment and to maintain the cooling systems that prevent overheating.
The growth of this activity has triggered requests for connection to the electrical system. According to the documentation from the Ministry for Ecological Transition, since the end of 2023, more than 6 gigawatts (GW) of access capacity to data centers in the transmission network have been granted, to which around another 6 GW awarded in the distribution networks since 2020 are added.
These figures do not mean that data centers are currently consuming 12 GW, but rather represent the maximum access power authorized for existing or projected installations. Not all projects have to be built or use all the granted capacity simultaneously, but the authorizations condition the availability of the network for new requests.
The Government's concern is precisely centered on that difference between the electricity that the country can produce and the physical capacity to transport it to consumers. The construction of new lines and substations requires investments and execution timelines that do not always coincide with the pace of development of business projects.
To this is added that data centers need electricity 24 hours a day, while solar and wind generation depends on weather conditions. Therefore, contracting a quantity of renewable energy equivalent to the annual consumption of a facility does not guarantee that this electricity will be available at every moment it is needed.
The new obligations posed by the Executive
To address this situation, the Ministry for Ecological Transition has developed a draft royal decree that establishes specific conditions for the electricity supply of data centers. The proposal, submitted to public hearing between August and September, mainly affects new installations with an access power to the grid equal to or greater than one megawatt.
The most relevant measure consists of requiring that at least 80% of the electricity consumption is backed by additional renewable generation, through self-consumption installations or long-term supply contracts linked to new production capacity.
The concept of additionality is fundamental to understanding the proposal. The Government does not intend for data centers to only purchase renewable electricity that is already produced in Spain, but rather to contribute to incorporating new generation facilities into the electrical system to meet the increase in demand associated with their activity.
Furthermore, the project introduces a requirement for hourly correspondence between consumption and renewable production. This means that it would not be enough to offset the electricity expenditure of an entire year by purchasing an equivalent amount of clean energy, but operators would have to demonstrate that they meet the coverage conditions during the hours their facilities operate.
The text also includes a differentiated treatment when the penetration of renewables in the system exceeds 90%, as well as requirements related to energy efficiency, water consumption, and the protection of information hosted in these infrastructures.
Among the proposed provisions are also conditions linked to digital sovereignty, aimed at reinforcing European control over certain operations and data. These requirements expand the scope of a regulation that, although it arises from the problem of access to electricity, also affects the business and technological activity of the operators.
Why companies reject the proposal
The employers' association Spain DC, which groups companies linked to the development and operation of data centers in Spain, believes that the conditions proposed by the Ministry may hinder the execution of projects and reduce the country's competitiveness compared to other European destinations.
The main disagreement revolves around the obligation to back consumption with new renewable generation and demonstrate its hourly correspondence. For operators, meeting these conditions may require additional investments and supply commitments that increase project costs and hinder their financing, especially when the facilities are in advanced planning phases.
The association also questions the uncertainty that introducing new obligations for investments whose viability was calculated under different regulatory conditions would entail. SpainDC estimates that around 9 billion euros in investments could be compromised by the proposal, a figure that represents a valuation of the sector on the potentially affected projects and not confirmed cancellations.
Business opposition does not necessarily mean a rejection of data centers using renewable energies. The controversy focuses on how they must prove it, what costs the obligation to incorporate new generation entails, and to what extent those requirements can become an obstacle to obtaining electrical permits.
Companies linked to energy supply and telecommunications have also spoken out about the regulation. Iberdrola has defended the importance of attracting this type of installation due to its capacity to generate economic activity, while Telefónica has warned of the effects that certain requirements could have on the development of the sector.
The negotiation with Brussels and European funds
The dispute has reached European institutions in the final phase of the Recovery Plan, the program funded by European Union funds to promote reforms and investments after the pandemic.
Spain submitted its seventh and final payment request on September 30, amounting to 25.861 billion euros, linked to the fulfillment of 148 milestones and objectives. Of that amount, 21.463 billion corresponds to transfers and 4.398 billion to loans, according to information released by the Government.
The operation of the European mechanism requires that States prove compliance with the commitments agreed upon with the Commission to receive disbursements. Therefore, it is not an automatic transfer of money, but payments subject to the evaluation of previously committed reforms and actions.
In this context, the Government has offered the approval of the data center decree within the negotiations with Brussels, after some of the reforms initially planned in the Recovery Plan did not materialize, including the increase in diesel taxation.
The link between both issues is relevant because the Executive has a limited time frame to finalize the regulation. The European Commission must complete the disbursements of the mechanism before the end of 2026, and Spain is also facing general elections scheduled for the next November 29.
However, the public documentation of the last payment request does not individually identify the data center decree as one of the 148 milestones subject to evaluation, so its eventual role in the disbursement must be attributed to the information published by El País and not presented as a condition already confirmed by the European Commission.
A regulation pending approval
The Government now faces the decision to maintain the main demands of the project or introduce modifications that allow for rapprochement with companies before its approval.
For the Ministry, the goal is that the development of data centers does not compromise the connection capacity of other activities nor increase the needs for electricity generation without an equivalent contribution of new renewables. The operators, for their part, demand that the obligations be adapted to the technical and economic possibilities of the projects to avoid Spain losing investments to other countries.