Category: News | Published: 2025-11-25
Data Spending Overtakes Oil For The First Time
The International Energy Agency has reported that global spending on data centres will reach around 580 billion US dollars this year, overtaking the 540 billion dollars allocated to new oil supply projects. The agency described this comparison as a clear marker of how modern economies have become anchored in digital services, cloud computing and large-scale AI models, all of which require vast physical infrastructure and reliable electricity.
Usage To Triple By 2035
Electricity use from data centres is projected to approximately triple by 2035. AI systems are a major driver, and the IEA expects half of all demand growth to take place in the United States, with Europe and China accounting for most of the remainder. Many new facilities are located near existing clusters around large cities, with around half of the sites currently in development designed to deliver at least 200 megawatts.
The concentration of this growth is, therefore, already testing the limits of energy systems. Grid connection queues for new facilities continue to lengthen, and in several regions networks are so congested that new requests have been paused. Shortages of transformers, cables and other grid components are adding to delays. These issues highlight how the rise of AI is now tightly linked to national energy planning, rather than being a purely digital challenge.
Electricity Systems Under Growing Pressure
The IEA describes the global system as entering an _“Age of Electricity”_, with most new energy demand coming through power grids rather than fossil fuels. Investment in electricity generation has increased significantly since 2015, yet grid investment has not kept pace. New solar and wind capacity is being deployed at record levels, but the lines and substations needed to carry this electricity to major users are often slowed by planning processes and supply chain constraints.
Cooling demand is creating additional pressure. For example, rising temperatures and rising incomes in many regions are driving higher peak electricity loads from air conditioning. These peaks often coincide with the load patterns of data centres, electric vehicles and electrified heating. As a result, grids are increasingly stretched while they await new capacity and greater flexibility from storage technologies.
In several established markets, energy regulators have warned that large electricity users may need to be subject to stricter technical rules or new pricing structures to ensure network stability. Data centres are therefore becoming part of broader energy security discussions, particularly in regions where supply margins are tightening.
Power Shortages Slow Construction Across EMEA
It’s also the case now that power constraints are directly affecting the pace of new construction across Europe, the Middle East and Africa. For example, new research from Savills shows that only around 850 megawatts of new power capacity for data centres has been delivered across the region so far this year, representing an eleven per cent decline compared with the same period last year. New take-up has also slowed to approximately 845 megawatts, roughly half of 2024’s level.
This slowdown is not driven by falling demand. In fact, total contracted power capacity has risen to almost 14,500 megawatts, up by twelve per cent year-on-year. Also, occupancy rates have increased to ninety-one per cent, and around a quarter of new take-up is now pre-let. These figures illustrate that operators are securing power well ahead of time because there is no guarantee that future capacity will be available when needed.
Property advisory firm Savills found that established hubs continued to expand over the past year, including France, Germany, the UK and Ireland. Strong growth was also recorded in emerging markets such as Portugal, Saudi Arabia, Spain, the UAE and Sweden, where land and power availability are more accessible. This trend suggests that some operators are shifting attention to secondary and tertiary locations that offer fewer bottlenecks and more flexible permitting.
The Effects of Cost Inflation
It seems that cost inflation remains a significant factor. For example, across EMEA, data centre build costs now range between roughly 7.3 million and 13.3 million US dollars per megawatt of IT load. It seems that some cities have even experienced double-digit annual increases in land prices, labour and equipment. The result is that these rising costs are lengthening project timelines and prompting developers to form closer relationships with suppliers to secure key components earlier.
Also, electricity consumption forecasts continue to add urgency. For example, one well-known industry analysis last year suggested that up to forty per cent of data centres could face power availability constraints by 2027, and that total electricity consumption for AI-optimised servers could reach around 500 terawatt hours. This would represent more than two and a half times the level recorded in 2023.
Superconductors Move Into Data Centre Design
While grid upgrades are essential, many of the most immediate challenges are emerging inside existing data centre campuses. For example, as AI systems become more computationally intensive, rack-level power has risen from tens of kilowatts to around 200 kilowatts in just a few years. Some operators are now planning for 600 kilowatts per rack, and there is growing discussion of multi-megawatt rack architectures.
A US-based engineering company, backed by several major technology investors including Microsoft, has now adapted high temperature superconducting cables for use within data centres. The firm’s first commercial system is designed to deliver three megawatts of low voltage power through superconducting cables cooled with liquid nitrogen to approximately minus 196 degrees Celsius. This cooling allows the material to carry electricity with zero loss, which in turn supports far higher power density.
The company reports that its cables require around twenty times less physical space than equivalent copper cables and can deliver power roughly five times farther within a campus. A demonstration installation has already been completed at a simulated facility, and pilot deployments at live data centres are expected next year ahead of a planned commercial launch in 2027. These technologies do not replace the need for additional grid capacity, but they allow operators to make better use of limited on-site power and cooling infrastructure.
Data Centres And AI Companies
For data centre operators, the expansion in investment highlights both opportunity and risk. For example, facilities with dependable power connections, competitive energy prices and space for expansion can attract long-term demand from cloud providers and AI companies. At the same time, rising construction costs, lengthy permitting and potential regulatory intervention make project planning more complex. There is increasing attention on how much electricity AI infrastructure consumes, which may influence approval processes in some regions.
It seems that AI companies now face equally important considerations. Access to high-density, well-powered infrastructure directly shapes the pace at which new models can be trained and deployed. Delays in securing suitable hosting capacity can slow research progress or increase operational costs. There is also growing pressure for AI to run on renewable energy, which means the location of data centres and the structure of power contracts matter more than ever.
Governments, Economies And Businesses
Governments now have to balance national competitiveness with energy security and climate commitments. D