Europe's Data Centre Boom Has a Power Problem, And Small Tenants Pay For It

The first months of 2026 have been loud for European infrastructure announcements, and the theme underneath them has been the same. In many of Europe's largest data centre markets, electricity availability has become the primary constraint on new capacity.

Microgrids and a billion euros

TikTok committed a further €1 billion to a campus in the Kiveriö district of Lahti, Finland. It's the company's second billion-euro Finnish investment, after Kouvola in 2025, and part of Project Clover, TikTok's €12 billion European data sovereignty initiative. 1 Reuters put the site's initial capacity at 50 MW, with potential to reach 128 MW. 2

In March, Pure DC announced what it calls Europe's first on-site data centre microgrid, in Dublin. 3 It pairs three energy centres of up to 30 MW each with a 20 MW battery system, for up to 110 MW of combined on-site power capacity, running on dual-fuel engines fed primarily by natural gas. It is intended to provide power during the campus's initial development phase, before the site is fully integrated onto the electricity grid. 4 Later the same month, Echelon Data Centres launched Ireland's first Green Energy Park at its DUB20 campus in County Wicklow, built around a shared 220 kV substation with SSE Renewables designed to support access to up to 800 MW of offshore wind from Arklow Bank. 5

Building dedicated on-site generation is increasingly a practical response to delayed utility connections rather than a sustainability flourish. The Pure DC microgrid runs primarily on natural gas.

For scale, Cushman & Wakefield put the EMEA development pipeline at close to 15 GW at the end of 2025. Their read on where that capacity actually lands is the more useful part: power availability, grid access, regulatory complexity and sustainability requirements increasingly determine where new capacity can be delivered. 6

Brussels is drafting rules

Regulators are moving in the same window. The European Commission has been preparing a package of data centre energy efficiency measures, alongside a strategic roadmap on digitalisation and AI for the energy sector, pushing towards highly efficient and increasingly decarbonised data centre infrastructure by 2030. None of it is settled law yet. 7

The Commission has indicated it is exploring minimum energy-performance standards for both new and existing facilities, with a formal assessment of the sector's energy needs due by 2027. Analysts and policymakers have warned that unmanaged data centre growth could complicate fossil-fuel phase-out plans. Electricity demand across Europe is forecast to rise by as much as 50% over the next decade, driven by data centres and wider electrification together. 7

Three ways this reaches your invoice

If you rent one server, none of the above sounds like your problem. It becomes your problem through three channels.

Power gets priced in, though rarely as a line item you can see. When a metro's available megawatts are scarce, the cost per kW rises through colocation and wholesale leases first, and works its way into retail VPS and dedicated pricing from there.

GPU capacity can crowd out general compute. A rack that can be filled with high-density AI hardware at AI margins is less likely to be filled with €5 VPS customers. Availability of ordinary compute in the hottest metros may become more constrained as AI demand grows.

Compliance costs land on operators. Minimum performance standards and reporting obligations are real work, and that work is recovered from tenants.

The case for not being in the hottest metro

There's a contrarian position here, and it's ours. For most workloads, you don't need to be in the metro everyone is bidding for.

AVS ISP runs Tirana, Skopje, Amsterdam and Dublin. Amsterdam and Dublin are in the thick of the European market. Tirana and Skopje aren't, and that's a feature. Costs in many Balkan markets have not yet seen the same capacity pressure as Europe's largest hubs, power availability has generally faced less competition from hyperscale AI deployments, and for users in Southern and Southeastern Europe the latency is often lower.

We're also honest about scale. A €5/mo VPS, a VDS from €40/mo, or bare metal from €150/mo is a right-sized amount of compute for an enormous number of real workloads. The most efficient server in Europe is the one you're not over-provisioning. A workload that fits in 2 vCPU and doesn't need to sit next to a GPU cluster is cheaper and often faster to deploy outside the hotspots.

Right-sizing beats relocating

Right-size before you relocate. Many fleets still carry substantial idle capacity, costing money and power for nothing.

Separate latency-critical from latency-tolerant. Batch jobs, backups, CI runners and cold standbys have no business paying Frankfurt prices.

Put your second region somewhere structurally different: a different power grid, a different fibre corridor, and a different flood and seismic profile. That's also, conveniently, the resilience answer.

Ask your provider where their power comes from. In two years it will be a compliance question. It's a cost question already.

The capacity race will resolve eventually. Until it does, the cheapest megawatt in Europe is the one you didn't need to rent.

Sources

1. TikTok announces additional €1 Billion investment in Finland, TikTok Newsroom
2. Exclusive: TikTok to build a second billion-euro data centre in Finland, Reuters
3. Dublin data centre powered by 110MW microgrid, 'Europe's first', Solar Power Portal
4. Inside Europe's First Microgrid Data Center, Data Center Knowledge
5. Echelon plans first Green Energy Park in Co Wicklow, RTÉ
6. EMEA Data Centre Update H2 2025, Cushman & Wakefield
7. Data centres and energy consumption: evolving EU regulatory landscape and outlook for 2026, White & Case