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Europe Data Center Power Market - Outlook and Forecast 2022-2027
The Europe data center power market exhibited a value of USD 4.96 billion in 2021 and is projected to reach USD 7.46 billion by 2027, with a compound annual growth rate (CAGR) of 7.05% during the period of 2022-2027. This growth can be attributed to various factors, including the increased digitalization accelerated by the COVID-19 pandemic, the rising adoption of cloud services, data localization regulations, and government support for data center infrastructure development.
One prominent trend in the market is the deployment of edge data centers. To cater to this trend, numerous UPS system providers are introducing innovative edge power solutions. Furthermore, new players in the industry are embracing both onsite and offsite renewable energy sources to create sustainable operating environments. Data center operators are also transitioning from traditional VRLA batteries to lithium-ion batteries, with major cloud service providers like Google and colocation providers such as Digital Realty implementing these advanced battery technologies in their facilities.
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USD 5 billion in 2020
Power Infrastructure, UPS Systems, Generator Systems, Tier Standards, and Geography
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The advent of 5G technology is expected to drive investments in edge data centers. Its increasing use in enterprise applications and AI-integrated platforms will have a positive impact on the Europe data center market. Additionally, the procurement of renewable energy is becoming increasingly important for the industry. A notable initiative in this regard is the Climate Neutral Data Center Pact, signed by 25 European cloud and data center operators including Equinix, Interxion (Digital Realty), OVHcloud, Scaleway Datacenter, Aruba, and others, along with 17 industry associations.
Moreover, the adoption of modular power infrastructure is contributing to the market share of Europe’s data center power sector. Modular data centers offer a portable solution for implementing data processing capabilities, featuring a small footprint and high power capacity over time.
Another factor driving the European data center power market is the emergence of fuel cell generators. In collaboration, Rolls-Royce and Daimler are developing generator systems powered by hydrogen fuel cells, enabling data centers to operate in a carbon-neutral manner. This development has a positive impact on the region’s data center power market.
The market is segmented based on various factors, including power infrastructure, ups systems, generator systems, tier standards, and geography.
Segmentation by Power Infrastructure
Transfer Switches & Switchgears
Other Electrical Infrastructure
Segmentation by UPS Systems
Less than or equal to 500kVA
Greater than 1,000 kVA
Segmentation by Generator Systems
0- less than 1.5 MW
Greater than or equal to 3 MW
Segmentation by Tier Standards
Tier I & II
Segmentation by Geography
Western Europe – UK, Germany, France, Netherlands, Ireland, Switzerland, Spain, Italy, Belgium, Other Western European Countries
Nordics – Sweden, Denmark, Norway, Finland & Iceland
Central & Eastern Europe – Russia, Poland, Austria, Other Central & Eastern Europe Countries
Small- and medium-sized data centers exhibit a higher demand for less than or equal to 500KVa systems. Additionally, the adoption of DC UPS systems in data centers shows significant potential. Notably, industry giants like Facebook and Google utilize the Open Compute Project (OCP) open rack design, incorporating 48V DC UPS battery cabinets to achieve cost savings of up to 20%.
To ensure smooth operations, UPS systems are widely implemented to provide backup power for cooling systems within data centers. Effective cooling is crucial for maintaining optimal temperatures and preventing malfunctions caused by overheating. As the price of lithium-ion batteries continues to decline, their adoption in UPS systems is expected to increase during the forecast period.
The rise of edge data centers, with a total power capacity of less than 1 MW, drives the adoption of generator systems ranging from 0-1.5 MW. Furthermore, the construction of hyperscale facilities in developing regions will reduce the demand for low-capacity generators in the market.
Moving on to specific regions, Western Europe is recognized as an established market for data centers, with major investment destinations including Frankfurt, London, Amsterdam, and Paris. Various projects by colocation, cloud, telecommunication, and internet service providers are underway in these regions, with a focus on OCP rack infrastructure solutions. This growth is supported by the emergence of original design manufacturer (ODM) power solutions in the market.
In the Nordics, the colocation sector dominates the market, with key players such as Digital Realty, Equinix, Green Mountain, atNorth, and Hetzner Online. Data center operators in this region actively embrace renewable energy through power purchase agreements with different energy providers. Consequently, investing in renewable energy projects presents substantial opportunities for vendors in the European data center power industry.
Vendors should consider investing in diesel generators, as there will be increased adoption by large and hyperscale data center operators that require generator sets of over 2 MW with a minimum redundancy of N+1.
To align with the industry’s focus on sustainability and cost reduction, operators are actively seeking efficient power solutions for their new data centers. Therefore, vendors should prioritize making their products more sustainable to meet these demands.
The European market is also experiencing a shift in industry demand due to the growing adoption of OCP-based infrastructure design by colocation and hyperscale operators. Leading vendors like Schneider Electric, Rittal, HPE, Delta Power Solutions, and Huawei Technologies offer infrastructure solutions based on the OCP design.
In the data center power market, ABB, Eaton, Legrand, Schneider Electric, and Vertiv are among the leading players. Cummins and Caterpillar, on the other hand, have a strong presence in the generator segment.
Key companies profiled in this report include ABB, Caterpillar, Cummins, Eaton, Legrand, Rolls-Royce, Schneider Electric, Vertiv Group, AEG Power Systems, Aggreko, Aksa Power Generation, Ametek Powervar, Anord Mardix, BACHMANN, BENNING Elektrotechnik Und Elektronik, Borri, Bloom Energy, Centiel, Cyber Power Systems, Delta Power Solutions, Enrogen, Exide Technologies, FG Wilson, Fuji Electric, Generac Power Systems, General Electric, Genesal Energy, Hewlett Packard Enterprise (HPE), HITEC Power Protection, HITZINGER, INNIO, Metartec, Mitsubishi Electric Corporation, Panduit, Perkins Engines, Piller Power Systems, Pramac, Riello Elettronica, Riello Elettronica (Riello UPS) , Rittal Systems, SAFT (Society des Accumulators Fix et de Traction), Siemens, Socomec, Toshiba Corporation, VYCON, WTI – Western Telematic.
Key Questions Answered
What is the size of the data center power market in Europe?
The European data center power market experienced an investment of USD 4.96 billion in 2021 and is projected to reach USD 7.46 billion by 2027.
Which region holds the largest market share in the European data center power market?
Western Europe has the highest market share in the European data center power market.
Which solutions are expected to observe significant adoption in the upcoming years?
OCP-based infrastructure design, sustainable solutions like line-interactive technology, and intelligent power distribution units are among the trends anticipated to witness high adoption and shape the market in the coming years.
Who are the key vendors in the European data center power market?
The major vendors in the European data center power market include ABB, Caterpillar, Cummins, Eaton, Legrand, Rolls-Royce, Schneider Electric, and Vertiv Group.
What are some of the latest trends that will influence the future of the European data center power industry?
The growth in 5G deployments, increased procurement of renewable energy, adoption of advanced UPS battery technologies, and rising uptake of modular power infrastructure will be key factors driving the evolution of the European data center power industry in the future.