Spain to require data centers to source 80% of electricity from renewables

On August 25, Spain’s Council of Ministers approved the urgent administrative processing of a draft royal decree that would establish a new regulatory framework for data center development, linking expansion to energy sustainability, water efficiency, resilience and digital sovereignty requirements.

Under the proposed rules, data centers would have to be operated by entities established in the European Union. Operators would be required to keep infrastructure-related operational data within EU territory and take measures to prevent access by authorities in third countries where such access is not authorized under EU law.

Data centers above specified thresholds would have to submit declarations confirming compliance with the requirements. Facilities hosting public administration or national security data would also have to formally guarantee that the data remains within the European Union.

The Spanish government said more than 12 GW of grid access and connection rights have been granted to data centers since 2021.

Renewable electricity

The draft decree would require data centers to certify that at least 80% of their electricity consumption comes from renewable sources. The requirement would remain in place until renewables account for more than 90% of Spain’s electricity mix, after which the threshold could be revised.

The renewable electricity would also have to meet an additionality requirement. Contracting existing renewable generation would not be sufficient. Each new megawatt of electricity demand associated with a data center would have to be matched by 1 MW of new renewable generation capacity commissioned no more than 18 months before the data center begins operating.

The additional capacity could come from on-site generation or long-term power purchase agreements (PPAs).

Hourly matching

The proposal would also introduce hourly matching requirements for renewable electricity consumption. During each hour of operation, renewable generation produced in the same hour would have to cover at least 80% of a data center’s electricity consumption.

The requirement goes beyond systems based on guarantees of origin or annual electricity matching, as operators would have to account for the hourly profiles of both data center demand and contracted renewable generation.

The requirement could encourage the deployment of energy storage to shift renewable generation between periods, although the draft does not explicitly require battery storage.

Grid access requirements

Data center projects seeking grid access would have to demonstrate compliance with the new requirements to obtain access and connection rights. Failure to comply could result in progressively higher charges and tariffs and, ultimately, the loss of grid access rights.

The mechanism is designed to allocate to developers part of the system costs associated with failure to meet the additionality and hourly matching requirements.

Data centers already in the permitting process would have six months to comply with the new requirements. Projects awaiting a grid access tender would have three months.

Developers could alternatively relinquish their grid access and connection rights without losing the associated financial guarantees.

1 MW threshold and water efficiency

The draft decree would apply the specific requirements to data centers with electrical capacity of at least 1 MW, reflecting their potential impact on local areas, water resources and the electricity system.

Data centers would also have to meet the highest energy and water efficiency standards under the European Union’s forthcoming labeling system for such facilities. Once the European framework takes effect, data centers covered by the royal decree would be required to achieve a Category A rating for both energy and water efficiency.