Moody’s warns Europe’s data center growth could raise electricity prices

Europe’s expanding data center footprint could put upward pressure on electricity prices, according to a report based on Moody’s data. The report says data centers accounted for about 2.5% of the continent’s electricity consumption in 2025. By 2035, their share could more than double to 5.7% across countries including France and the UK.

Some countries expected to host the most data center capacity could see larger increases in their electricity consumption share: 17% in the “Northlands” and 30% in Ireland, the report says. The source does not define “Northlands.”

Data centers generally pay for upgrades to their direct grid connections, but grid operators usually cover wider network reinforcement, according to Moody’s. Those costs, along with tighter supply and demand, could be passed on to electricity customers.

The report also says data center growth could bring more business to utilities, potentially giving them revenue to invest in new generation and transmission infrastructure, including clean energy. Moody’s expects governments to intervene to limit the steepest consumer price rises. Possible measures it identifies include tax cuts, price caps and stricter rules for data center connections.

The report compares Europe’s situation with the United States, where data centers are described as having a more pronounced impact on billpayers. It also mentions the Trump administration’s Ratepayer Protection Pledge, while noting that it remains unclear whether European countries will adopt similar measures.