Europe to give power plants digital makeover amid Al boom

Some of Europe's ageing coaland gas-fired power plants can look forward to a more high-tech future as big tech players, such as Microsoft and Amazon, seek to repurpose them as data centres, with ready-made access to power and water.

- FORREST CRELLIN

Companies such as France's Engie, Germany's RWE, and Italy's Enel are looking to benefit from a surge in AI-driven energy demand by converting old power sites into data centres and securing lucrative long-term power supply deals with their operators.

The data centre option offers the utilities a way to offset the hefty costs of shutting down ageing power plants as well as potentially underwriting future renewable developments.

Tech companies see these sites as a quick way to secure power grid connections and water cooling facilities, two big bottlenecks in the Al industry.

"You have all the pieces that come together like ... water infrastructure and heat recovery," said Bobby Hollis, vice president for energy at Microsoft.

Lindsay McQuade, EMEA energy director at Amazon, said she expected permitting for data centres to move faster at old sites, where a big chunk of infrastructure was already in place.

Utilities can either lease the land or build and operate the centres themselves, securing long-term power contracts with tech firms, he said.

The deals offer much more than just the sale of unused land as they include opportunities for stable, high-margin revenue, said Simon Stanton, head of Global Partnerships and Transactions at RWE.

"It's more about the long-term relationship, the business relationship that you get over time that enables you to de-risk and underwrite your infrastructure investments," Mr Stanton said.