Spain proposes new data center regulations to mandate renewable energy use

The Spanish government is advancing a royal decree to regulate data centers, focusing on sustainability, energy efficiency, water consumption, and digital sovereignty. Under the proposed rules, large facilities exceeding 1 MW must ensure that at least 80% of their hourly consumption is backed by new renewable energy capacity commissioned within the previous 18 months. This additionality requirement aims to prevent data centers from absorbing existing clean energy and displacing households or industries toward more expensive fossil fuels.

Prime Minister Pedro Sánchez has advocated for this regulatory shift, stating the goal is to “trade in bytes, not watts,” to ensure infrastructure growth aligns with the electrical system's capacity. The move addresses a significant gap between the projected 2030 electricity demand of 3.5 to 4 GW and the over 12 GW of access rights granted since 2021.

In developing these proposals, the Spanish government has utilized a report from France’s Autorité de la Concurrence regarding the competitive challenges posed by AI and data centers. The French regulator warned that electricity costs represent 30% to 50% of operating expenses and cautioned that the market dominance of large players could lead to unfair advantages in securing energy supplies, potentially creating barriers to entry for smaller competitors.