German data centers are building their own gas-fired power plants due to long waits for grid connections

Data center operators in Germany are planning to build their own gas-fired power plants because of slow connections to the electricity grid. The reason is the long wait for grid connections, which can take up to 15 years in extreme cases.

The number of applications for permits to build data centers in Germany has risen sharply in recent years. E.DIS Netz, the distribution system operator in Brandenburg and Mecklenburg-Western Pomerania, has received 170 applications from data centers since 2022, with a total load of 22 GW.

So far, however, only two data centers with a load of 100 MW have been connected, and Google cancelled its long-planned data center in Mittenwalde, Brandenburg, citing problems with the grid connection.

According to Cologne-based energy supplier Rheinenergie, connecting data centers to the grid in Germany takes 10 to 15 years. According to analysts at Ember, connecting a data center to the grid takes an average of 7-10 years, but can take up to 13 years in extreme cases.

However, an Ember report says there are ways to reduce this period to one year. Strategic decisions by grid operators and data center developers themselves could, for example, help overcome grid constraints and reduce the infrastructure expansion required.

Possible solutions include strategically choosing sites for data centers or using special grid connection agreements, for example in combination with an on-site electricity source. According to the report, these could cut the wait for a grid connection to just one year.

More and more developers are therefore planning to build their own gas-fired power plants to reduce peak electricity demand that must be drawn from the grid.

“We see more and more data centers building their own power plants right next to the data center,” said Thomas Frank of Siemens Energy, referring to the global situation. He said his company is currently in talks with data center operators in Germany that are planning to build their own gas-fired power plants.

For example, a new data center being developed in Frankfurt by US operator Cyrus One in cooperation with German energy company E.ON is due to go live in 2026, and Cyrus One plans to supplement its grid connection with a 61 MW gas-fired power plant in 2029.

The gas-fired power plant, which will eventually be able to switch to burning up to 25% hydrogen, will allow the data center to operate without relying on the expansion of regional grid infrastructure, which is delayed, a Cyrus One spokesperson told Tagesspiegel Background.

Data centers as a driver of rising electricity consumption

According to the IEA, global demand for electricity is set to rise sharply, with demand from energy-intensive artificial intelligence being one important factor. The IEA forecasts that global data center demand will more than double over the next five years and consume more energy than all of Japan by the end of the decade.

The rapid construction of data centers is also expected to increase gas demand, with the IEA forecasting that gas-fired generation for data centers alone will rise by 175 TWh by 2035.

The European Commission has drawn up a new energy efficiency plan for digital infrastructure in an effort to curb energy consumption. It found that without improvements in energy efficiency, energy consumption in the EU would be 27% higher today than it was 20 years ago.