As Europe pushes towards decarbonization and phasing out coal plants, a surprising transformation is underway. Big Tech players like Microsoft and Amazon are repurposing old coal and gas power stations into AI-powered data centers, driven by soaring demand for computing power and energy access.
What’s Happening
Utilities across Europe — including Engie (France), RWE (Germany), and Enel (Italy) — are striking deals with tech giants to convert decommissioned fossil-fuel plants into state-of-the-art data centres. These aging sites offer:
- Existing grid connections
- Built-in water cooling systems
- Industrial-scale land availability
Microsoft and Amazon are already in talks or progress on several such conversions. Microsoft VP Bobby Hollis noted, “You have all the pieces that come together – water infrastructure and heat recovery.” Amazon echoed the efficiency advantage, expecting faster permitting processes at these sites.
Impact
This partnership benefits both industries:
For utilities:
- It’s a new revenue stream post-decarbonization.
- The long-term “green premiums” (up to €20/MWh) from tech clients help fund renewable energy projects.
- Example: A single contract tied to 1 GW data demand could be worth billions of euros over its term.
For tech companies:
- They gain fast-tracked energy access – a critical need as AI infrastructure scales rapidly.
- They avoid decade-long grid delays by moving into pre-connected power plant locations.
- Sites allow for “behind-the-meter” power deals, offering resilience and efficiency.
Context
Over 153 coal and lignite power plants in the EU and UK are expected to close by 2038, with 190 already shut since 2005, according to NGO Beyond Fossil Fuels. This creates a massive real estate and energy infrastructure opportunity.
Utilities like EDP, EDF, and Drax are aggressively marketing their decommissioned sites. For example:
- Drax is repurposing parts of its Yorkshire coal site, offering water cooling and “behind-the-meter” electricity.
- JLL, a real estate firm, is facilitating 2.5 GW of data centre developments at former coal plants in Germany and the UK.
What’s Next
- Engie plans to double its renewable energy capacity by 2030 and has 40 sites globally lined up for tech conversions.
- Tech companies will continue to pay a premium for fast-to-deploy infrastructure, especially with AI models and cloud services demanding higher power density.
- Expect to see “energy parks” – data centres directly connected to dedicated renewable sources – as the next frontier.
Industry insiders say this model is just the beginning:
“Utilities are not just shutting plants—they’re creating new business models,” said Michael Kruse of Arthur D. Little.With AI’s hunger for power showing no signs of slowing, Europe’s industrial past might just become the engine for its digital future.