eco Association: “Without competitive electricity prices and reliable grid connections, Germany has no chance as a digital location.”
The Alliance for the Strengthening of Digital Infrastructures in Germany, founded under the umbrella of eco – Association of the Internet Industry, criticises the German federal government’s failed location policy. In particular, the association warns that the German Federal Council’s (Bundesrat) proposal on grid connection allocation – rejected by the Economic Committee – together with yesterday’s coalition committee agreement on an industrial electricity price that explicitly excludes data centre operators, is jeopardising the data centre industry in Germany.
“Growth needs infrastructure. Data centres are the backbone of the digital transformation for businesses, public administration and society, and an important pillar of the desired digital sovereignty sought by Germany and Europe. Despite numerous commitments to strengthen Germany as a data centre location, the current policies of the German federal government are in fact counterproductive,” says Dr Béla Waldhauser, Spokesperson for the Alliance for the Strengthening of Digital Infrastructures in Germany.
“Data centre operators rely on early and reliable commitments for power grid connections. Currently, processing can take up to seven years. In regions with particularly high demand, such as Frankfurt, it can even take over ten years. These delays jeopardise investment security and strategic planning for data centre projects,” Waldhauser continues.
eco demands: The procedures for allocating grid connections must be designed nationwide in such a way that investment security for data centre projects is guaranteed. To this end, grid operators must be given appropriate leeway to design allocation procedures in line with demand. A first step towards alleviating and temporarily easing the situation would be a detailed adjustment of the Power Plant Grid Connection Ordinance (KraftNAV), as recently proposed by the German Federal Council. However, this proposal was not accepted on Wednesday by the Committee on Economic Affairs and Energy.
“The German federal government must now act urgently and secure the cabinet’s approval of the Federal Council proposal by the end of the year in order to avoid an escalation of the capacity bottleneck,” says Waldhauser. Otherwise, it must be expected that no further data centres will be built in Germany in the foreseeable future.
“A recent study by eco and Arthur D. Little shows that we are heading towards a massive supply gap, particularly in the area of digital infrastructure, over the next five years. AI and automation are causing demand for computing power and fast networks to explode. However, the current conditions in Germany do not allow us to provide the necessary capacities to the market in a timely manner,” says Waldhauser.
The high price of electricity in Germany is another factor that could slow down the construction of new data centres in Germany. Contrary to the agreement in the coalition agreement, data centres are not mentioned in yesterday’s published coalition agreement on the industrial electricity price.
“We call on the German federal government to rectify this. Otherwise, this is another rejection of Germany as a data centre and digital location,” says Dr Béla Waldhauser.
