Big Tech pushes countries to seek power market revamp amid demand

Poland is the latest county to announce plans to update its energy systems.

Big Tech’s growing demand for clean power capacity to fuel the sector’s enormous electricity consumption has prompted European countries to remodel their energy markets.

Poland is the latest county to announce plans to update its energy systems in a bid to remain attractive to tech multinationals such as Alphabet and Microsoft.

The country’s grid operator, PSE, wants the new system to be able to provide stable and reliable delivery of clear energy in the future, chief executive Grzegorz Onichimowski said in an interview with Bloomberg News.

This would help lure customers who are looking for uninterrupted electricity deliveries to the data centres they could build in Poland.

“They are coming to us and we’re discussing where they could locate their investments,” he said.

“Poland is high on their list, but we need to offer them a guarantee of supply. What’s more, it needs to be emission-free electricity.” 

In recent years, Microsoft and Alphabet’s Google have announced plans to develop cloud computing services along with data centres in Poland.

Microsoft pledged to invest $1bn (€916m) in the country to provide expandable cloud services for eastern European businesses amid a consumer online spending boom.

The EU’s largest eastern economy is currently rethinking its 2040 energy policy, with the climate ministry hinting it will mainly bet on weather-dependent wind and solar power.

The previous government’s plan called for more than 1tn (€235bn) zloty in investments to finance the energy transition by the end of next decade.

Green energy sector pressure

Meanwhile, Ireland has also come under increased pressure to develop its green energy sector, to decarbonise the grid, and to become less dependent on fossil fuels while also attracting foreign direct investment from tech multinationals.

The explosive growth of AI and data centres may become a new driver for green-economy expansion. 

Not only are more energy-efficient chips, servers, and cooling systems required to fuel AI’s onward march, but Big Tech is also under increasing pressure to minimise the environmental impact of the technology and has been pushed to source more clean energy, the London Stock Exchange Group suggested recently. 

At its recent annual results, the State-body responsible for attracting foreign direct investment, the IDA, said attracting renewable energy companies to Ireland is a priority for the agency this year.

However, the sector continuous to be mired with challenges, especially in relation to the often lengthy and laborious planning process, when developing projects in the Republic.

IDA chief executive Michael Lohan said planning reform is "fundamental" for Ireland to win foreign direct investment in this area. 

We've come through a period of uncertainty with our planning process: It's taking too long 

The IDA also highlighted Ireland's relatively high energy costs, compared with European peers, that "risk severely impacting foreign direct investment growth prospects".

Other risks threatening Ireland’s attractiveness for foreign direct investment include lack of national infrastructure capacity, primarily housing, as well as political stability, said IDA chairperson Feargal O'Rourke last week.

“The biggest risk we face is execution,” he said in regard to meeting targets including housing.

• Reporting by Bloomberg and the Irish Examiner