Summary

The Europe data center power market is expected to grow at a CAGR of 7.46% during the forecast period. Growth in the number of data centers in the region is leading to an increase in electricity demand and the emergence of a new electricity-intensive industry.

Key Highlights
The region has been witnessing strong growth with an increase of efficient power infrastructure spending, which is shifting the old, outdated data centers to modern facilities. According to the European Commission, by 2020, data centers in Europe will utilize 259 TWh of electricity, which represents 1.7% of the world’s total energy consumption. In the next ten years, the market is expected to generate 30 times more data with an increased number of servers, leading to a higher amount of energy consumption.
Many European policymakers have identified data centers as one of the fastest-rising sectors when it comes to energy consumption. The price of energy in Europe is also on the rise, and according to the British Computer Society’s Data Centre Specialist Group, it has impacted data center business, three models.
For instance, Germany is often cited as the European country with the highest data center energy consumption. It also has the largest data center market, holding approximately 25% of Europe’s total capacity. If these trends continue, it’s predicted that data center energy consumption in Germany will reach as high as 16.4 billion kWh by 2025. As a result, energy security and availability are also becoming issues for data centers in Europe.
European policymakers have formulated an EU code of conduct to inform and encourage data center operators to reduce energy consumption in a cost-effective manner, without impacting the critical functionality of data centers.
The spread of COVID-19 has negatively affected major data center operations across the region, and some of the countries such as the UK, Germany, the Netherlands, France, and Ireland being the most affected as many governments had halted their construction work in the first half of a year. For instance, the government of France has stopped all non-essential construction projects to avoid the spread of the virus. Hence, the outbreak of pandemic is expected to hamper the growth of the data center power market in 2020.


Key Market Trends

Increasing Investment in Data Center in Europe is Expected to Drive the Market


The growing adoption of cloud computing services in European countries leads to an increased number of IT infrastructure components. Finland, Sweden, and Denmark are the leading contributors to cloud adoption, with a minimum of 50% of enterprises opting for cloud computing services, which are expected to fuel the investment in the construction of new data centers in the region.
Many technology companies are launching their cloud services and helping many businesses in their digital transformation journey. For instance, in 2019, Google revealed its plan to open a new cloud region in Poland in partnership with Poland’s Domestic Cloud Provider (DCP) to accelerate the adoption of cloud services in the country as cloud computing is one of the fastest-growing segments in the IT services market in Poland.
In September 2020, DigiPlex, Datacenter provider, announced to open a second facility at Fetsund in Lillestrom. The new data center is 2,200 square meters and is built to support 3 MW. Similarly, in 2020, Green Mountain, a Norwegian colocation provider, has expanded its DC1-Stavanger data center with a new 2.5MW data hall. The size of the completed mountain hall, including infrastructure in the tunnels, is about 1800 square meters. The power capacity data hall is 2.5 MW, but a project to double this to 5 MW is already started and will be ready for service in 2021.
Moreover, Nordic countries, due to the vast resources of renewable energy, low power prices, favorable climate conditions, good infrastructure, has resulted in a surge of foreign investments in the region over the years. For instance, Lefdal Mine Datacenter is the unique mountain hall facility on the west coast of Norway with a water-based cooling system, allowing 10 KW/rack with a PUE of less than 1.15, which is an ideal facility to meet the current and future demands.


Digital Transformation of the Healthcare Sector in European Countries is Expected to Drive the Market


The healthcare organization relies on the maximum level of available automation and digitization equipment, systems, and patient data for every-day operations. The data center used in the healthcare sector needs a reliable, easy-to-install power solution in order to minimize the downtime and unplanned outages by regularly refreshing the power units, such as UPS. This also ensures the optimum level performance of the critical power equipment used in the data centers.
The healthcare sector is increasingly adopting cloud services to manage critical clinical and IT applications, such as PACS and EHR. For instance, according to Nautix Inc's report, healthcare providers are increasingly focusing on adopting a hybrid cloud, and hybrid cloud deployment is expected to jump from 19% to 37% in two years.
These organizations are actively investing in power solutions. Linton Hospital has adopted a UPS for replacing all the single-phase UPS with double-conversation technology, a data center system UPS, in order to ensure the highest level of protection to the power available at the hospital.
Further, governments have often played a key role in instigating systemwide digital health projects. For instance, England has established national bodies, like NHS Digital and NHSX, to support and transform NHS and social care. Also, the Danish government has announced investment into an app-based platform known as the World-Class Digital Service (WCDS); it can be used to access all publicly held data on Danish citizens and is jointly financed with local authorities via the country’s Technology Investment Fund.


Competitive Landscape

The Europe data center power market is moderately concentrated due to higher initial investments and low availability of resources. It is dominated by a few major players like Schneider Electric SE, Fujitsu Ltd, Cisco Technology Inc., Eaton Corporation, and ABB Ltd. These major players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.


June 2020 - Schneider Electric introduced an uninterruptible power supply (UPS) portfolio for small data centers and edge deployments. The new Easy UPS 3 phase for commercial and industrial locations is a cabinet that can be scaled up to 600kVA while also being easy and relatively light so it can be used in smaller areas. The Easy UPS 3L is available in two versions, the 500 and 600kVA, with a weight of around 640kg and 720kg, respectively, and are available globally.
February 2020 - Eaton Corporation, Ireland based company, has completed the acquisition of Power Distribution, Inc. (PDI). PDI is one of the leading supplier of mission-critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. Through the acquisition, Eaton has expanded its product portfolio and will be in a better place to serve its data center clients.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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