Big Tech meets Old Energy: Aging coal and gas power plants across Europe are getting a surprising second life — as AI-ready data centres, thanks to growing demand from tech giants like Microsoft and Amazon.
What’s Happening:
- Utilities like Engie, RWE, Enel, and others are partnering with cloud and AI leaders to repurpose decommissioned power sites.
- These old sites offer two rare resources that AI data centres desperately need:
- Direct grid access
- Water cooling infrastructure
- Direct grid access
- Companies can now skip the 10-year wait often required for new grid connections and permits.
Why AI Is Driving This:
- AI applications (from ChatGPT to video generation) require massive computing power, creating skyrocketing demand for power-intensive data centres.
- Tech firms are paying premiums of up to €20/MWh for low-carbon power via long-term contracts — often worth hundreds of millions of euros.
Utilities’ Perspective:
- Closing coal plants is costly — but turning them into data centres unlocks a new high-margin revenue stream.
- Long-term green power contracts help fund the expansion of renewable energy (e.g., solar/wind).
- Example: Engie plans to double its 46 GW renewable capacity by 2030 and is marketing 40 sites worldwide for data centre development.
Project Highlights:
- Germany: A former coal plant to become a 2.5 GW data centre.
- UK: Four sites in development by JLL for a major tech client.
- France: EDF has selected developers for data centres at two gas plants.
- Australia: Engie repurposing the Hazelwood coal plant closed in 2017.
- Drax (UK): Offers “behind-the-meter” supply from its Yorkshire biomass site.
Bottom Line:
Tech giants need “speed to power” to maintain AI growth — and Europe’s old power plants, once slated for demolition, may now become central to powering the next wave of artificial intelligence.