Europe’s Energy Utilities Poised for Massive Gains as AI Demand Skyrockets

Europe's power giants are quietly positioning themselves as the unlikeliest winners of the AI revolution.

The insatiable energy demands of artificial intelligence data centers are creating a gold rush for utilities—while tech CEOs brag about algorithms, old-school energy firms are counting their euros.

Power Play: AI's Dirty Secret

Every ChatGPT query, every deep learning model training session, every algorithmic trade—they all guzzle electricity like a 1990s crypto miner. And Europe's utilities are ready to flip the switch.

The Grid Strikes Back

While Silicon Valley talks disruption, the real power (literally) remains with the companies keeping the lights on. AI might be virtual, but its energy needs are brutally physical—and someone's got to foot the bill.

Bonus jab: Funny how the 'disintermediation' crowd still needs middlemen to keep their servers running—just this time they're called 'utility providers' and charge by the megawatt.

Energy utilities stand to win in Europe

European utilities such as France’s Engie, Germany’s RWE and Italy’s Enel are working to convert shuttered power stations into digital infrastructure hubs.

The MOVE helps offset the costly process of decommissioning old sites, while potentially generating new income through long-term power deals with tech partners.

“You have all the pieces that come together like … water infrastructure and heat recovery,” said Bobby Hollis, Microsoft’s vice president for energy.

Amazon’s EMEA energy director, Lindsay McQuade, noted that permitting may be faster at these sites, where much of the infrastructure is already in place.

Energy firms stand to gain more than just rental income. By leasing land or developing and operating data centers themselves, utilities can secure high-margin, long-term power contracts.

“It’s more about the long-term relationship … that enables you to de-risk and underwrite your infrastructure investments.”

Simon Stanton, RWE’s head of global partnerships.

Many of Europe’s 153 hard coal and lignite plants are set to close by 2038 to meet emissions targets. Already, around 190 plants have shut down since 2005, according to data from NGO Beyond Fossil Fuels.

Data centers are expected to unlock billions in potential revenue

Data centers have become highly lucrative. Operators often pay a “green premium” for low-carbon energy, up to €20 per megawatt-hour, according to Gregory LeBourg, environmental director at French data center firm OVH.

With some centers requiring hundreds of megawatts or more, long-term contracts could be worth hundreds of millions, or even billions, of euros, according to Reuters calculations.

One emerging model is the “energy park,” where a data centre is directly connected to a renewable power source and only uses the grid during emergencies. While still a nascent approach, it is attracting interest.

Engie aims to double its renewable capacity from 46 GW by 2030 and has identified 40 potential data center sites worldwide, including many retired coal and gas plants. One notable location is the Hazelwood coal plant in Australia, which closed in 2017.

Other European energy giants, including Portugal’s EDP and France’s EDF, are also pitching old sites for digital infrastructure use.

“This is business model diversification,” said Michael Kruse, managing partner at consultancy Arthur D. Little.

For tech firms, the appeal is clear—it’s time. Grid connection delays in Europe can drag on for over a decade, while converted power plants offer faster access to energy and cooling.

“You actually have the opportunity to move faster,” said Microsoft’s Hollis.

Data from Synergy Research Group shows Europe lags the US and Asia in data center capacity, partly due to slower permitting and grid delays.

Some real estate players are already involved. JLL is developing a 2.5 GW data center at a former German coal plant, and four sites in the UK for an undisclosed tech client, said Tom Glover, who leads JLL’s data center transactions.

Britain’s Drax is also offering parts of its former coal site in Yorkshire, now partially converted to biomass, for digital redevelopment. “Behind-the-meter” arrangements are being proposed, where the data center draws power directly from the plant, using the grid only when needed.

EDF, meanwhile, has selected developers for two gas plant sites in central and eastern France.

“Speed to power is just the phrase we keep hearing over and over again,” said Sam Huntington, director at S&P Global Commodity Insights.

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