With rising power demands driven by AI, regulatory uncertainty, and the urgency of net-zero commitments, the discussion provided critical insight into how the sector can navigate its future.
The session, chaired by Anna Klaft, chairwoman of the German Data Centre Association, began by acknowledging the dramatic increase in energy demand, forecasting global data centre power needs to reach 84 GW by 2027.
The panel reflected a consensus that while this demand is theoretically attainable, the current state of infrastructure—particularly power generation and transmission—poses significant constraints.
Sanjay Kumar Sainani, global SVP and CTO at Huawei Digital Power, warned of systemic inertia: “Power on the supply side… takes between eight to 12 years to lay out. So while there is real demand out there… there is always a risk of strategy.”
He added that the utilities must distinguish between speculative and actual demand, a task complicated by rapid investment flows and evolving technology.
Ciaran Flanagan, VP and global head of Siemens Data Centre Solutions, echoed this concern. He said: “The industry has gotten ahead of the ability of the utility providers to bring on renewables… We’re not only asking them for this big, huge picture… we’re also asking them to maximise the amount of carbon-free energy.”
This dual requirement places a significant burden on energy providers already operating within outdated regulatory and infrastructural constraints.
Matt Pullen, EVP & MD Europe at CyrusOne, focused on Europe, highlighting a critical problem: “The problem in Europe with power is not generation, it’s transmission.”
Lengthy upgrades to transmission networks are hindering data centre expansion, especially as AI accelerates demand. He noted that while the US is seeing five gigawatts of headline signings annually, European growth remains shallow due to infrastructure limitations.
Pullen explained their strategy: “We’re trying to mitigate delays by working with TSOs, DNOs and energy companies to explore local gas and hydrogen-ready generation.”
His remarks emphasised the urgency of engagement with grid operators and the exploration of alternative energy sources.
Marc Garner, president for cloud and service providers at Schneider Electric, positioned innovation as the solution to time-to-market delays. He presented Schneider’s “Alpha Structure” model: “We provide on-site generation to work in parallel until you get connected to the utilities, or as an island if need be.” This decentralised, energy-as-a-service approach enables rapid deployment and enhances resilience.
Garner stressed the importance of modernising infrastructure: “Our energy supply isn’t linear anymore… we need an infrastructure which is modernised today.”
He also highlighted battery storage and liquid cooling technologies as critical to addressing immediate inefficiencies, especially as rack densities continue to rise.
“Liquid cooling is no longer just a buzzword,” Garner noted. “We are putting capacity in at 40, 50, 60 kilowatts per rack. You can’t look at the cooling infrastructure as an island—it needs to be optimised as part of the whole power system.”
Sainani added a global perspective on cooling and flexibility. He suggested using AI to dynamically adjust workloads to grid conditions: “Most grid capacity is sized for peak events.
“That leaves 15 to 25% unutilised… AI software could allow data centres to demand less power when needed.” Temporal and spatial load shifting, he argued, can help optimise capacity across hyperscaler portfolios.
He also recommended behind-the-meter solutions, such as distributed microgrids, as a way to bypass transmission constraints: “This could be renewable energy, gas turbines, or hydrogen fuel cells… we are doing a couple of projects in Europe in that sense.”
On sustainability, the panellists agreed that the industry has made significant strides but warned against complacency.
“No industry has done more to facilitate bringing on renewables around the world than the data centre industry,” Flanagan said. “The most significant thing a data centre operator can do is source renewable energy.”
Siemens, he noted, is investing in digital twin technology, AI-based cooling optimisation, and phasing out harmful gases like SF₆, replacing them with “blue GIS” switchgear.
Pullen outlined CyrusOne’s environmental strategy: “We’re targeting BREEAM Very Good or Excellent… in operations, we focus on energy efficiency, clean energy, water conservation and circular systems like waste heat reuse.” He noted that enterprise and hyperscale customers differ mainly in approach, not in ambition: “The hyperscalers tell us what to do. We tell the enterprises what we’re going to do.”
Regulation was identified as both a catalyst and a constraint. Flanagan expressed concerns over the EU’s AI Act: “It’s my belief that the AI Act in its current form is going to disadvantage us in the long term… It’s a hugely political discussion.”
He also called out policy paralysis: “Still in many countries in Europe, our legislators are not able to keep up with what looks like an increase in demand.” Regulation must evolve to support, not stifle, innovation.
Garner warned: “We’re not going to have a big bang that’s going to transform the power problem… Regulation is stifling innovation in this industry.” Instead, he argued, small incremental gains through innovation—unhindered by rigid regulation—would be key.
Pullen noted the burden of the EU Energy Efficiency Directive: “It wasn’t well thought through… it put a wedge between operators and hyperscale customers.” However, he welcomed recent signs of leniency from Brussels, suggesting they now recognise the risks of over-regulation on growth.
The panel concluded with reflections on European independence in a rapidly changing geopolitical landscape. Garner advocated supply chain diversification: “We’ve brought more manufacturing to local environments… but we also embed net zero into product design.”
Sainani supported a shift to localised, self-sufficient energy generation. “If transmission is a bottleneck, go behind the meter… create your own distributed energy microgrid. This offers autonomy and resilience.”
This panel illuminated a path forward that requires collaboration across industry, government, and utilities.
The challenges are vast—transmission bottlenecks, rising AI-driven demand, and uncertain regulations—but so too is the collective capacity for innovation. As Klaft summarised, “It’s a fun topic eventually,” and one whose complexity demands a unified and strategic response from all stakeholders.
RELATED STORIES
