Europe's data centre industry is struggling to get enough electricity to meet surging AI-driven demand while also meeting decarbonisation rules and commitments. Amidst this backdrop, the utility EDP's groundbreaking collaboration with Start Campus in Portugal, offers a possible way forward, demonstrating how utilities and data centre operators can leverage existing infrastructure to accelerate deployment whilst maintaining decarbonisation commitments.
Ahead of Data Center World Europe, we spoke with Ana Quelhas, EVP of Hydrogen and Data Centres at EDP, to explore that groundbreaking Start Campus project, as well as other critical challenges facing energy providers and operators today. Ana leads EDP’s global business unit driving growth with data centres and renewable hydrogen. Based in Lisbon, EDP operates across four continents (Europe, North America, South America, and Asia-Pacific), with regional hubs in Lisbon, Houston, Singapore, and São Paulo.
From grid connection bottlenecks to shifts in how data centre facilities must approach energy sourcing, Ana discusses why behind-the-meter generation remains a second choice in Europe, the missing piece of integrated planning across demand, grids, and generation, and how creative co-development partnerships are emerging to share the cost and risk burden. Below are edited excerpts from our conversation.
Ana explained what techniques are working to get data centres powered up faster, how the approaches vary by geographic market, and why a grid connection remains the preferred option globally:
“We're seeing several approaches gain traction. Phased capacity is one clear path forward, starting with whatever grid capacity you can secure immediately — particularly if there are expedited procedures for lower capacities — then building optionality to increase that capacity over time.
Hybrid strategies combining self-generation with grid connection are also emerging, though the dynamics differ significantly between markets. In North America, we see large developers bringing their own generation, especially gas-fired, to bypass grid connection bottlenecks. However, in Europe, this approach faces unique challenges. The economics of gas are completely different from North America, and the licencing procedures for such generation can take years, potentially negating any time savings to securing grid connection.
Hybrid solutions (combining a grid connection with on-site generation) do make sense wherever possible because they help avoid grid connection charges on the behind the meter component.
However, it's important to understand that behind-the-meter generation is typically a second choice. Data centres always prefer grid connection because on-site generation fundamentally changes the risk profile.
When you are connected to the grid, you're sharing the reliability burden with the wider grid ecosystem. With behind-the-meter generation as your primary source, you need to guarantee redundancy, and you replace system risk with asset risk. It only makes sense to pursue this alternative if it can offer clear benefits in cost and/or time savings.”
A lack of integrated planning presents the biggest challenge to better collaboration among data centre operators, energy providers, and transmission operators, Ana says.
“The key word here is integration. Specifically, integrated planning, which is currently missing. In broader terms, data centres pose a completely different challenge than regular industrial loads because of their scale. We're dealing with three distinct key stakeholders that need to be coordinated: the demand centre (data centre), the network operators, and the generation providers. Each plans and operates somewhat independently, creating gaps.
The primary bottleneck is typically grid access, but once data centres secure grid connection a second bottleneck may immediately emerge: where will the energy actually come from? Grid operators have no responsibility for providing energy, they provide the wires and substations for energy to flow, but that doesn't guarantee someone will supply it. In some markets, energy availability and firm capacity could become challenges alongside network limitations.
Theoretically, the market should solve the energy and firm capacity gap through price signals that make generation viable. But here's the challenge: we're talking about such large volumes that traditional market mechanisms struggle. Data centres are increasingly aware they can't simply launch a standard RFP (Request for Proposal) to secure a PPA (Power Purchase Agreement), because there may be no one in the market able to offer the required energy volumes.
The missing piece is integrated planning across all three components: generation (including firm capacity), transmission, and demand. While demand and transmission become integrated through the grid connection procedures, generation remains disconnected. Energy is no longer a commodity for hyperscale projects. Of course future constrains may differ across markets, but, in addition to grid limitations, generation capacity and system adequacy could prove equally important topics for large-scale data centre deployment. . When energy becomes scarce rather than liquid, new partnership models naturally emerge.”
There is an upside to new data centre projects struggling to get enough power, Ana explains. They’re more willing to share development risk with utilities in bringing new power online, especially renewables.
“We're seeing large data centres increasingly willing to share development risk on the generation side, whether renewable or gas. As a renewable developer, we have our pipeline of wind and solar projects, but we can only move forward when we have visibility on the business model. Creating more pipeline and opportunities involves risk.
When we have a partner willing to share that risk from the very beginning, we can create more options, build more pipeline, and be ready to activate projects once demand is firm. This creates the conditions for faster development. We're seeing more large data centres entering upstream into the energy system, finding the right partners to share development risk from the earliest stages.
This shift is happening precisely because energy is no longer a commodity for these projects. The scarcity of available energy and/or firm capacity at the required scale is driving these strategic partnerships to emerge.”
Securing energy on the open market isn't viable for a project that could draw 20% of Portugal's electricity consumption. Ana explains how the Start Campus and EDP strategic partnership is designed to align large-scale data centre development with new renewable energy generation.
“Start Campus is developing a 1.2-gigawatt data centre next to a site of a former EDP’s coal power plant. To put that in perspective, Portugal's peak load is about 10 gigawatts and the electricity consumption is about 50 terrawatt hours a year, so this single project could represent roughly 20% of our national consumption. At that scale, going to market and saying “We need this much power by this date, can you supply it?” simply doesn’t work.
They recognised this early on and approached us to gain visibility on how they would secure energy and where it would come from. Our agreement is then structured around accelerating renewable energy development to support their electricity demand needs, while also exploring potential synergies between Start Campus project and the infrastructure we manage at the site of the former Sines coal plant. For example, by repurposing our existing sea water-intake infrastructure, Start Campus can channel deep-sea water directly from the Atlantic into their facility. This allows them to run a highly efficient liquid cooling system that requires zero freshwater, significantly lowering the project's overall environmental impact while repurposing industrial assets.
This brings me to a broader point about synergies between utilities or generators and large loads in solving grid connection issues. We have substantial infrastructure, substations and private lines, built to connect our generation plants to the grid. This infrastructure was designed solely to transfer the energy we produce, one way, into the grid. But if we can share those assets and that entry point into, that physical door into the grid with a large load like a data centre, we can cut costs and save significant time on grid access.
We're actively promoting regulatory framework evolution to allow this. It's a win-win-win solution: a win for generation, a win for the load, and a win for the system, because we can make infrastructure that often sits underutilised more productive. This is an angle we're exploring across all our locations with renewable or conventional generation.”
Ana contends that it’s not a black-and-white choice between data centres expanding quickly and achieving sustainability. Hydrogen probably isn’t the answer for data centres, but lots of viable choices exist.
“First, let me address hydrogen specifically. We don't see a significant role for hydrogen in data centres currently. Hydrogen applications we're seeing move forward in Europe are primarily to serve refineries and green ammonia production. These are feedstock applications, not energy vector applications.
On the broader sustainability question, the challenge with data centres is that this is bringing a brand-new significant source of energy demand to European grids. This is not a process of electrification or greening existing fossil fuel consumption with renewable power. This is a net-new demand that is being added to the system.
We may need to rely on gas generation to ensure firm capacity and security of supply, especially given the need for reliability. However, in certain regional markets which have substantial renewable energy sources, like hydro-electric power in Iberia, it’s easier to accommodate large loads while maintaining a decarbonised grid.
We also cannot neglect the flexibility and contribution that large loads like data centres can provide for the system. We should not treat them as an inflexible baseload. Their load profiles offer opportunities to facilitate grid integration without jeopardising decarbonisation objectives.
So the answer isn't black or white, it's not one or the other. We need to stick to our sustainability objectives and decarbonisation commitments without compromise. But I believe we can achieve both scaling and sustainability if we design the system correctly. It requires thoughtful planning, flexibility, and the right partnerships, but both objectives must be achieved together.”
Join the conversation at Data Center World Europe
Ana's insights underscore a fundamental transformation in how Europe's data centre industry must approach energy procurement and partnerships.
Ana will explore these themes further at Data Centre World Europe alongside Start Campus, TenneT TSO, Pure Data Centres and Eurelectric on the panel Co-Building the Data Centre Future: Can Traditional Energy Models Deliver Europe's AI Vision? bringing together perspectives from operators, utilities and energy providers grappling with the industry's most pressing challenge.
Ana Quelhas, EVP of Hydrogen and Data Centres, EDP