COPENHAGEN, Denmark – The Nordics, long seen as a magnet for data center investment due to their stable climate and abundance of renewable energy, are now placing limits on the development of power-hungry facilities as rising energy demand forces a rethink.
At the center of the debate is Denmark, the first Nordic country to confront this question head-on, as the formation of a new government and an increase in grid access requests means a freeze on new projects.
Data centers around the world are increasingly facing opposition due to concerns about their energy use. In America, Maine came closer recently Ban on data center construction And in Pennsylvania, the backlash could hurt incumbents ahead of the election. There are other states, including Virginia and Oklahoma consideration of postponement.
Only two European countries, namely the Netherlands and Ireland, have implemented a complete moratorium on data centers. Both member countries have relaxed the restrictions under certain conditions. But grid pressure is spreading across the continent, as the AI boom accelerates electrification that was already being boosted by the energy transition and digitalization.
The ‘Hunger Games’ of energy policy
In March, Denmark’s state-owned grid operator Energinet introduced a Temporary A spokesperson told CNBC that new grid connection agreements have been put on hold due to an “explosion” in capacity requests. About 60 GW projects are waiting for connection. This is much more than Denmark’s maximum electricity demand of about 7 GW. Data centers are responsible for about a quarter (14 GW) of the 60 GW of potential new grid connection projects, the spokesperson said.
“If you can’t locate your AI workloads in Denmark, you’ll move them elsewhere, and that’s what we’ll see.
Pernille Hoffman
Managing Director of Nordics in Digital Realty
Data Center Industry Association (DDI) CEO Henrik Hansen told CNBC that an extension of the moratorium cannot be ruled out.
“We have to be realistic and look at what’s actually available. It’s not really possible to go crazy with all kinds of connection agreements just because the power is not available. We have to engage in this discussion and maybe even discipline our industry a little more.”
He said the increase in applications has resulted in “imaginary” queues, where the gap between what is available and what is requested is widening. Therefore, the industry needs to take a closer look at projects that may not be as viable, he said, adding that the association is calling for more criteria to determine which should be given the highest priority and fastest connections.
“We debate a lot the need to clear that line and look at stronger criteria in terms of maturity, actual investment decisions, clients and social value,” Hansen said. For some countries, such as the Netherlands, choosing who should gain entry has been reduced to a debate. what is more important: a data center or a hospital.
Sebastian Schwartz Böttcher, Country Sales Director of Energy Management Specialists schneider electric, described the debate on LinkedIn as the “Energy Policy Hunger Games” between data centers and businesses. He suggested that specific industries should not be segregated.
His sentiment was echoed by Tobias johan sorensenThe senior analyst at think tank Concito said no one should be left behind in the queue, but there should be separate queues based on criteria.
In Denmark the moratorium is to last three months or until Energinet conducts an overview and implements new measures to increase capacity. Energinet said that to begin deciding on how to prioritize the many access requests that are clogging the queue, new political agreements and adjusted regulatory frameworks will need to be created.
No political decisions have been made as Denmark is currently in the process of forming a new government following a general election. The Energy and Climate Ministry declined to comment.
Before the elections, Energy Minister Lars Aagaard told the local media It will investigate the possibility of providing priority grid access to Danish customers by placing data centers at the back of the queue.
“I suspect that data centers and battery parks, among other things, are taking up much of the available capacity in the electricity grid,” Aagaard told business news outlet Finans in January, according to comments translated by Google.
It was against this backdrop that questions related to the moratorium and who should get priority energy access were discussed at the Data Center Denmark conference in Copenhagen last week.
danger of falling behind
Gone are the days when you could quietly build a data center, says Joanna Reicherts, EMEA Datacenter Government Affairs Director MicrosoftThe statement was made during a panel moderated by CNBC at the conference. This statement is also echoed by other hyperscalers and operators as they look to engage more with communities who are becoming aware of the reality of huge server warehouses in their backyards.
Denmark had approximately 398 MW of installed data center capacity in 2026, with an additional 208 MW under construction. According to DDI Association, it is set to increase by 1.2 GW by 2030. Hyperscales make up 60% of Denmark’s current capacity.
“You can only wait so long,” said Diana Hodnett, global director of data center public affairs, partnerships and economic development. Googletold CNBC in an interview. When there is no certainty that the moratorium will be lifted in three months’ time, and the outcome is unclear, there is an immediate pivot to focus on other markets, he said, noting the need to move quickly to service customers.
“I’m not sure governments and TSOs realize how quickly this could happen,” Hodnett said, referring to transmission system operators who manage the grid.
A woman walks through a Google-themed barrier in front of a Google data center in Fredericia, Denmark on November 30, 2020. (Photo by Frank Silius/Ritzau Scanpix/AFP) / Denmark Out (Photo by Frank Silius/Ritzau Scanpix/AFP via Getty Images)
Frank Silius | AFP | getty images
Pernille Hofmann, managing director for Nordics at data center services firm Digital Realty, said how times have changed. “In the past, there has always been an abundance of electricity here, so it’s never been an issue. … I think we’re also seeing this huge demand from data centers that aren’t really aligned at all with the distribution network or the grid. So that needs to be addressed,” Hoffman told CNBC.
Asked whether the temporary halt to grid applications could be extended, Pernille said, “I fear it will, but I hope it won’t.”
“If you can’t locate your AI workloads in Denmark, you’ll just move them elsewhere, and that’s what we’ll see. And this applies to Denmark, but also to the Nordics as a region. If we’re not able to supply the areas of need that are located here for AI deployment, they’ll go elsewhere,” she said.
Some are hoping that Denmark’s situation will lead to new rules that could provide an example for the rest of the Nordics and other European countries. Energinet Chief Operating Officer Soren Dupont Christensen said during a panel discussion that the temporary pause could be seen as a “window of opportunity” to rethink regulation.
Microsoft’s Joanna Reicherts, Google’s Dianne Hodnett, Digital Realty’s Pernille Hofmann, Energinet’s Soren Dupont and Concito’s Tobias Johan Sorensen speaking on a panel at the Data Center Denmark conference in Copenhagen. (Datacenter Industry)
datacenter industry
Ireland relaxed its restrictions late last year, creating “one of the most comprehensive regulatory frameworks in Europe for managing large energy users,” said Alistair Spears, general manager of Azure infrastructure at Microsoft. Microsoft plans to invest $3 billion in data center capacity on Danish soil between 2023 and 2027.
“Our investment is in response to a request from our Danish customers who want their data stored and processed closer to home and under EU law,” Spears told CNBC via email. “We hope that we will be able to continue to supply our Danish customers with the level of computing power for cloud and AI solutions they demand, to support Danish economic competitiveness and the functioning of an increasingly digital society.”
He emphasized that utilities are essential infrastructure that keeps the modern world running.
“The key question is not whether demand for compute power has slowed down – but how fast infrastructure and policy can catch up,” he said.
