Why Iberdrola's first data centre link up could be the start of something big
The Spanish wind and solar giant's international presence makes move into further markets a possibility, says its new partner
The JV of the utility and Irish group Echelon will build and run data centres in Iberdrola’s home market Spain after the two struck what's claimed as the largest agreement of its kind so far in Europe.
With grid connections one of the biggest hurdles facing data centre operators worldwide, partners such as Iberdrola offer the chance to secure sites with connectivity and access to the hefty capacities needed by the next generation of AI facilities.
While the partners will initially focus on the Spanish market, Echelon said it could be followed by similar joint moves elsewhere with Iberdrola, one of the world’s largest green power generators which also has a growing focus on networks.
Carlos Torres Diaz, head of gas and power markets research at Rystad, said the link-up is the latest example of a deepening relationship between data centre groups and the utilities that have access to their most sought-after commodity – power.
“[Norwegian power group] Statkraft now has a division that is looking to partner up with tech companies to provide the power for these projects,” he said.
Elsewhere, France's EDF has been holding a series of tenders with data centre owners for development sites with ready access to power.
The new JV – which will be 80% owned by Echelon – is the first high-profile outing for Iberdrola’s new subsidiary called CPD4Green, which is dedicated to facilitating data centre development and has been looking for its first partner.
CPD4Green was set up last year after Iberdrola executive chairman Ignacio Galan flagged the huge demands of AI data centres as one of the global green power giant’s key opportunities. The new unit has a 700MW portfolio of sites in Spain with a potential 5GW more down the line.
Iberdrola corporate development director David Mesonero Molina said data centres had already “become a key vector for the growth in electricity demand. The alliance signed with Echelon will allow us to value our portfolio of sites with access to electricity connection and our ability to offer these infrastructures secure, clean and competitive energy 24 hours a day, 365 days a year.”
Ireland-based Echelon is one of the fastest-growing data centre operators in its home country and the UK, and is backed by global investment giant Starwood Capital.
The Iberdrola tie-up allows Echelon to make a long-desired leap into the Spanish market, seen as one of the key potential growth markets for data centre deployment in Europe.
The first facility to be built by the two, called Madrid Sur, already has a 230MW grid connection secured and will be bolstered by an on-site PV facility built by Iberdrola.
“Spain has material benefits for our customers: access to large-scale renewable energy with some of the lowest prices in Europe and large construction and operation capacities,” said the Irish company.
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