Power Grid Delays Challenge Amazon's Data Center Expansion in Europe

Amazon Faces Power Grid Delays in European Data Center Expansion

Challenges in Power Grid Connections

By Kate Abnett

Impact of Connection Delays

BRUSSELS, Feb 3 (Reuters) - Long delays to get power grid connections are challenging Amazon's plans to expand data centers in Europe, the company told Reuters, as industries ramp up pressure on policymakers to upgrade ageing energy grids.

Proposed Legal Changes

Energy-intensive industries have urged the European Union to invest more in grids, warning that a fast connection to stable, reliable power networks is a key criteria for investments in new industrial sites in Europe.

Industry Responses and Initiatives

Pamela MacDougall, Amazon Web Services' (AWS) head of energy markets and regulation in EMEA, said the timeline for getting a grid connection had become one of the biggest deciding factors in the company's data center investments.

Connecting to the transmission network in Europe can take up to seven years - versus the roughly two years it can take to develop a data center, she said.

In the United States, connection queues average one to three years, according to the International Energy Agency, although they can sometimes also stretch to seven years.

"And we're finding more and more across Europe that certainty of the delivery date has continued to be delayed," she said in an interview.

The European Commission proposed legal changes last year to cap deadlines for authorities to approve grid permits at a maximum of two years, and exempt grids projects from environmental assessments, to speed up the modernisation of Europe's power networks. EU countries and lawmakers are negotiating the proposals.

NETWORK CONGESTION

MacDougall said "in many countries" in Europe, Amazon had wanted to build infrastructure but missing grid connections or power network congestion had made the project unfeasible.

"There's a misalignment. We want to expand and grow within two years," MacDougall said, adding that the delays were "challenging our growth aspirations".

Italy and Spain are among the countries where grid connections are slowed down by a backlog of so-called "speculative" projects which applied for connections as a precaution but will likely not go ahead, electricity industry association Eurelectric has said. 

First-come, first-served rules mean other projects cannot overtake them in the queue.

Another factor is long wait times for permits to upgrade European power grids. Slashing these deadlines are among the legal changes proposed by the European Commission. 

MacDougall is vice-chair of GIGA, an industry association launched last month to push policymakers to modernise Europe's power grids. Other members include energy-hungry tech companies Meta and Google, and electric vehicle charging infrastructure firm Fastned.

Amazon is building data centers across Europe as it expands its AWS - the world's largest cloud provider, which provides computing power, data storage and other digital services.

The company does not disclose exactly how many data centers it has in Europe, but it has existing infrastructure in more than 20 European countries and is expanding investments in countries including France, Germany and Spain. 

(Reporting by Kate Abnett; Editing by Susan Fenton)