Some aging fossil fuel power stations in Europe may soon become high-tech and start powering the digital economy, as demand for AI services keep souring.
Tech firms including Microsoft and Amazon are looking to repurpose disused coal and gas plants into large-scale data centers, attracted by their existing access to electricity infrastructure and water cooling systems. This comes as AI systems have been proven to take up vast energy resources, forcing tech firms to think of alternative renewable energy sources to power their systems, while the likes of Google want to limit data center power usage during peak demand periods.
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.