Energy production is on every agenda, while the Straits of Hormuz are closed, but even before the current confllict in the middle east, Europe had an energy problem. Europe’s data centre boom is colliding with one of its biggest policy commitments, the European Green Deal. The challenge is simple to describe but complex to execute: how do you power a rapidly expanding digital infrastructure without blowing past climate targets?

The consequences of energy policy are often not revealed until it is too late to change course. France’s nuclear strategy enabled it to generate revenue through energy exports, while Germany’s renewable-led approach resulted in an overreliance on Russian gas. What is clear is that if predictions are correct, and the demand for compute doubles due to AI expansion, then every nation will need significantly more investment than it is making today.

There is no single solution, but rather a layered system combining clean generation, smarter consumption, and tighter regulation. To give ourselves a chance, we need a massive expansion of renewable energy. Hyperscalers are already signing long-term Power Purchase Agreements (PPAs) to directly fund new capacity. This means that, in theory, each new data centre can be matched with newly built green generation, rather than drawing from an already stretched grid.

Nuclear is here to stay and must grow. French power stations will need to be renewed, and other nations must consider building new nuclear plants. The average cost of a new plant ranges from €6–10 billion, with a significant portion driven by regulatory requirements, particularly around waste management. While safety must remain paramount, there is ongoing debate about whether regulatory frameworks could evolve to make projects more financially viable for already stretched government budgets.

Third, the EU is pushing radical efficiency gains inside data centres themselves. New facilities are expected to meet strict Power Usage Effectiveness (PUE) targets, reuse waste heat, and optimise workloads. Building data centres in extremely cold locations, or even underwater, is being explored. Desert locations are also being considered, thanks to abundant solar energy and cooler night-time temperatures.

Fourth, grid modernisation and flexibility are critical. Data centres are increasingly being designed as flexible loads, capable of shifting non-critical workloads to times when renewable energy is abundant. This aligns with a broader EU push toward smart grids and demand response mechanisms, helping to smooth peaks and reduce reliance on fossil fuel backup generation.

The result is a pragmatic model. The EU is not banning growth, it is reshaping it. In a Green Deal environment, data centres will continue to expand rapidly, but every megawatt must increasingly be justified, optimised, and, above all, decarbonised