The Government raises requirements for data center investors to avoid a bubble

The Government raises requirements for data center investors to avoid a bubble

The Government will impose new requirements on promoters and investors in data centers in Spain with the aim of regulating the development of this booming sector, which is key to the promotion of artificial intelligence and other technological applications. To this end, the Executive will urgently put the Draft Royal Decree regulating the requirements of energy, environmental sustainability, resilience, and digital sovereignty applicable to data centers out for public consultation this very week, according to Government sources.

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This new regulation fulfills one of the mandates included in Royal Decree-Law 7/2026 responding to the crisis in the Middle East. The new regulation will require data center developers to comply with the most demanding European standards for water and energy efficiency. Besides having to report their consumption parameters, as established by community efficiency legislation, these facilities must have the highest rating, A, in a labeling system similar to that of household appliances, in the development of which Spain is ahead of the EU.

Additionally, data centers must offset their high energy consumption with new renewable generation within national territory that covers 80% of their energy expenditure, and during the same hours in which that consumption occurs. To do this, they must either produce that renewable energy themselves or secure power purchase agreements (PPAs) with third parties.

From the perspective of digital sovereignty, the regulation will require that the installation be operated by an entity established in the European Union that will keep the data related to the operation of the center within the community territory, and that measures be adopted against access by authorities of third countries not covered by European law.

All these new requirements, Government sources indicate, must involve the commitment of promoters through responsible declarations. Non-compliance will entail penalties, sanctions, and in more extreme cases, could lead to the loss of network access connection. The ministries of Ecological Transition and Digital Transformation are involved in drafting this decree, but Moncloa has been directly involved in the preliminary procedures.

The Government wants to avoid problems in planning a sector that, according to industry estimates, could involve a total long-term investment of up to 70 billion euros. However, the Executive warns of problems due to lack of regulation that have already emerged in countries such as Ireland and the Netherlands, and therefore the new regulation aims to prevent such problems from reaching Spain.

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Faced with the flood of investors interested in this type of project, the Government assures that they are in a position to choose the best developments, as there are some limitations that prevent all interested parties from carrying their projects through to completion. For months, the Executive has been trying to avoid speculation over network connection access points, which suffer from heavy saturation due to high demand and represent a bottleneck. To this end, applicants for network access points have been required to specify the activity for which they have requested access reservation. Likewise, they are imposed with increasing financial penalties while that reservation remains unused in order to free up as much capacity as possible to be occupied by real projects.

Currently, the Government indicates that six gigawatts (GW) are already available in the transmission network for data centers and another six gigawatts in the distribution network for the same purpose. More capacity will have to be added with the development contemplated in the new planning of Red Eléctrica. The current Artificial Intelligence Strategy estimated four GW of electrical demand by 2030.

All the regulations in process aim to avoid a bubble in this sector, where large multinationals such as Amazon, Google, or Microsoft have already announced mega-projects on Spanish soil. In addition to foreign interest, Spanish firms such as Merlin Properties, ACS, or Iberdrola are also betting on this new strategic market niche for digital development and artificial intelligence in Spain and the European Union.

The Government assures that for months it has been in talks with the main multinationals and associations intending to invest in datacenters in Spain and there is widespread consensus. This Wednesday, government officials will meet with Spain DC and Ametic, the trade associations representing this new industry, to explain the details of the new regulation they are going to draft.

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