Spain is proposing to make access to scarce electricity-grid capacity conditional on how data centres source and use power, including a requirement to match at least 80% of consumption with additional renewable generation every hour.

The proposals would apply principally to data centres with at least 1 MW of grid-access capacity and combine renewable electricity requirements with limits on energy and water use, alongside resilience and digital-sovereignty provisions.

Behind the intervention is a widening gap between the amount of grid capacity being reserved by data centre projects and the capacity Spain actually expects to be built.

Spain’s transmission system operator has granted more than 6 GW of access capacity to data centres since late 2023, while around another 6 GW has been granted through distribution networks since 2020.

Spain’s 2024 AI Strategy, by comparison, anticipates around 2.5 GW of compute capacity by 2030, corresponding to approximately 3.5-4 GW of electricity demand.

The draft argues that allowing substantially more grid capacity to be reserved than is likely to be used risks restricting access for other electricity consumers.

80% renewables, hour by hour

Under the proposals, qualifying data centres would need to cover at least 80% of their total electricity consumption through renewable generation.

That could come through self-consumption or power purchase agreements with renewable generators in Spain, but the rules are designed to ensure new data centre demand is accompanied by additional generation rather than simply reallocating existing renewable output.

Qualifying generation would generally need to have entered service no more than 18 months before the data centre starts operating or first uses the associated electricity.

PPAs would need to run for at least 10 years and identify the data centre and renewable generation – and, where applicable, storage – covered by the agreement.

The draft would then apply the 80% requirement on an hourly basis, meaning at least 80% of electricity consumed in each hour would have to be matched by qualifying renewable generation produced during that same hour.

That goes well beyond the annual renewable matching commonly used in corporate power procurement.

Ireland already requires new data centres to source additional renewable generation equivalent to at least 80% of annual demand, but allows a six-year period for the associated renewable projects to begin generating. Spain’s proposed combination of additionality, hourly matching and long-term PPAs would create a much tighter link between new electricity demand and the generation supporting it.

Penalties could extend to losing grid access

The requirements would carry financial penalties rather than operating simply as sustainability targets.

Data centres falling short of the additional-renewables requirement could face surcharges on network tariffs and electricity-system charges ranging from 100% to 500%, depending on the scale of the shortfall.

Separate monthly surcharges of between 10% and 50% are proposed for failing the hourly matching requirement, depending on how many hours during a month are non-compliant.

Repeated serious breaches could ultimately result in the loss of grid-access and connection rights, although that would require sustained non-compliance rather than an isolated failure.

For the renewable provisions, the draft defines serious repeated non-compliance as remaining below 60% additional renewable coverage for five consecutive years, or failing the hourly requirement during at least 20% of hours over the same period.

The regime could also affect projects already in Spain’s development pipeline.

Pending connection applications would have three months after the rules enter force to demonstrate compliance, while projects that have already secured access and connection permits but have not yet connected to the network would have six months.

If those permitted projects failed to demonstrate compliance within six months, their access and connection rights would lapse and their deposited guarantees would be called. Developers could instead surrender the permits within the six-month window without forfeiting those guarantees.

PUE and water limits

Spain is also proposing interim energy and water-efficiency requirements until the EU’s planned data centre sustainability labelling regime takes effect.

Facilities covered by the decree would initially need to achieve a maximum power usage effectiveness of 1.15 and water usage effectiveness of 0.1, corresponding to the proposed class A thresholds under the European scheme.

The Spanish proposals also include requirements covering resilience and data sovereignty. Operators would need to be established within the EU, while operational data, metadata and records under their own control would have to remain within the bloc.

Those requirements would not extend to customer systems, data or services that the operator cannot access or control.

Tighter localisation rules would apply where facilities host certain Spanish public-sector systems or systems linked to national security and defence, with relevant data, metadata, telemetry, logs, replicas and backups required to remain within the EU.

A harder approach to scarce grid capacity

Spain’s proposal comes as European governments grapple with project pipelines that increasingly exceed the electricity infrastructure available to serve them.

The UK faces a similar problem, with speculative projects occupying positions in the grid-connection queue alongside developments with a clearer prospect of being built.

But the UK’s policy has so far focused on connection reform and initiatives such as AI Growth Zones, intended to steer major AI infrastructure towards locations where sufficient power and planning support can be assembled.

Spain’s draft takes a more prescriptive approach by placing conditions directly on projects seeking or holding that capacity, linking grid access to additional renewable generation and demanding operational standards.

That shows a harsher stance, something that the UK is also beginning to explore. Ofgem recently proposed ‘commitment fees’ for data centre projects, which it hopes will lead to a reduction in the number of speculative projects in the connections queue. 

Like those proposals, however, Spain isn’t yet going forward with its own proposals. Instead, it’s currently under consultation, and further regulatory and legal reviews will be needed before it’s finally adopted.