European datacenter boom threatens higher energy bills unless governments intervene

Moody's forecasts server farms could consume 17% of Dutch electricity and 30% of Ireland's by 2035

Datacenters are forecast to consume a growing share of Europe's electricity by 2035, potentially pushing up consumer prices and prompting governments to impose price caps or restrictions on bit barns, according to Moody's.

The credit rating agency is keeping tabs on the financial implications for datacenter operators and electricity networks.

It predicts that while power consumption by server farms is relatively modest today, these facilities are set to become major drivers of electricity demand by 2035, requiring utilities and network operators to invest in generation and grid capacity.

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Massive compute sheds still accounted for "a low single-digit share" of electricity in most of the largest European markets in 2025, typically about 2.5 percent. But some of the major markets such as the UK and France are set to see accelerating growth in the number and size of facilities that could substantially increase their share of electricity consumption.

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The report estimates datacenters will account for at least 5.7 percent of electricity demand in France and the UK by 2035, but could be as high as 17 percent for the Netherlands and 30 percent for Ireland. The latter country is regarded as an outlier, however, as datacenters already made up 23 percent of Ireland's electricity consumption in 2025 – up from just 5 percent in 2015.

In addition, the EU has set out the goal of more than tripling the bloc's datacenter capacity within five to seven years, and wants to diversify where such projects are sited beyond the primary markets such as Germany, Ireland, France, and the Netherlands to secondary markets in the Nordics and southern Europe.

This means more power generation will be needed, plus expansion of the grid networks to carry the extra energy to where it is required. Moody's says this has the potential to put pressure on grid operators' balance sheets in the short term, compounded by the lag in recovering higher capital spending under many European regulatory regimes.

This pressure is more pronounced for transmission networks than distribution networks because datacenter operators are required to fund only the cost of the connection to the grid, the report by Moody's notes.

It highlights some novel approaches adopted by utilities, such as repurposing old fossil-fuel plant sites for server farm projects because of their existing grid connections – as is said to be the case with at least one of the UK government's AI Growth Zones – and partnering with developers to build new facilities and supply them with power.

The cost of expanding power grids, together with supply-demand imbalances, is set to push energy prices higher, Moody's forecasts. Historically, this has prompted political measures to limit the financial burden borne by customers, it says.

Some governments are already considering tax cuts and additional subsidies for end users, while a growing number of transmission networks are starting to demand financial guarantees to screen out speculative or duplicative projects. The UK government is mulling over this measure, as we reported during the summer.

Looking ahead, intervention could become more intrusive through measures such as electricity price caps, additional taxes, or levies.

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Moody's cites Ireland as an example, where the Commission for Regulation of Utilities (CRU) replaced a moratorium on new datacenter grid connections with a framework under which operators applying for a grid connection rated at 10 MVA or more must provide matching power generation or storage capacity on-site or nearby, and meet at least 80 percent of their annual electricity demand through additional renewable projects in Ireland.

In America, President Trump brought in a Ratepayer Protection Pledge to try to defuse growing voter unhappiness at datacenters and their effects on energy bills. The pledge now covers utility companies, bit barn developers, and state governments with a pinky promise that citizens' bills won't rise to pay for all the extra energy and grid infrastructure needed.

Moody's expects more European governments to follow the US and Ireland in intervening over datacenter power demand if expansion continues on its current trajectory. ®