Episode Details

Welcome back to The Pexapark Podcast!

In the first part of the episode, Luca Pedretti talks to Michael Winterson, CEO of the European Data Centre Association, about how Europe’s data center industry plans to power its next stage of growth. Michael walks through why Europe’s data center market is only about half the size of the US and Chinese markets, why capital is no longer the industry’s bottleneck, and why grid access has become its single biggest constraint, along with why onsite gas generation, common in the US, has little traction in Europe.

Key themes from the discussion include:

• Why Europe’s data center market is about half the size of the US and China, even as growth accelerates to 15–20% a year
• How capital committed to European data centers has more than doubled year over year
• Why grid connection delays, not capital or demand, are now the industry’s central bottleneck
• Why onsite gas generation, common in the US, is not seen as a viable path forward in Europe
• How EU programs like the AI Gigafactory initiative and the Cloud and AI Development Act aim to reindustrialize sites and build sovereign digital infrastructure
• Why efficiency, sustainability, and additionality rules are making renewable PPAs central to how data centers get rated and permitted

In the second part of the episode, Luca turns to recent Pexapark market intelligence. He looks at wind imbalance costs in the Nordics, which spiked in 2025 before easing through 2026 on 15-minute imbalance settlement, TSO actions, and new Aurora line transmission capacity into northern Sweden, though costs remain above pre-2025 levels in most markets. He then turns to Germany, where competition among direct marketers is compressing fees for solar and wind contracts, with some marketers now paying producers to take their power, particularly for wind in the southwest and, more unusually, for solar in the north.

NOTES

State of European Data Centres 2026 Report

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