Amazon has reportedly applied the brakes to its ambitious data center expansion plans across Europe, citing significant challenges in securing timely power grid connections. According to a detailed report from Reuters, which interviewed top executives at Amazon Web Services (AWS), the prolonged timelines for obtaining grid access have emerged as a critical bottleneck, forcing the tech giant to reassess its growth strategy on the continent.
Grid Connection Delays Challenge Expansion
Long delays in securing power grid connections are posing a serious challenge to Amazon's plans to expand its data center footprint in Europe, the company confirmed to the news agency. Energy-intensive industries, including major tech firms, have reportedly urged the European Union to prioritize investments in grid infrastructure, emphasizing that reliable and stable power networks are essential for attracting new industrial investments.
Executive Insights on Investment Decisions
Pamela MacDougall, Amazon Web Services' head of energy markets and regulation for Europe, the Middle East, and Africa, revealed in an interview with Reuters that the timeline for grid connections has become one of the most significant deciding factors in the company's data center investment decisions. She highlighted a stark contrast: while developing a data center typically takes about two years, connecting to Europe's transmission network can extend up to seven years.
"And we're finding more and more across Europe that certainty of the delivery date has continued to be delayed," MacDougall added, underscoring the growing uncertainty. She serves as vice-chair of GIGA, an industry association recently launched to advocate for modernizing Europe's power grids, with members including tech giants Meta and Google, as well as electric vehicle charging infrastructure firm Fastned.
Infrastructure Hurdles Across Europe
MacDougall noted that in many European countries, Amazon has encountered situations where desired infrastructure projects became unfeasible due to missing grid connections or power network congestion. "There's a misalignment. We want to expand and grow within two years," she explained, adding that these delays are "challenging our growth aspirations."
Current Footprint and Expansion Efforts
While Amazon does not disclose the exact number of its data centers in Europe, it reportedly maintains existing infrastructure in over 20 European countries and is actively expanding investments in key markets such as France, Germany, and Spain. However, the expansion efforts are being hampered by systemic issues in the power grid sector.
Systemic Issues in Grid Management
Countries like Italy and Spain are particularly affected by grid connection slowdowns, partly due to a backlog of so-called "speculative" projects that are unlikely to proceed. First-come, first-served rules in these nations prevent other projects from advancing in the queue, exacerbating delays. Additionally, lengthy wait times for permits to upgrade European power grids are cited as another contributing factor.
The European Commission has proposed legal changes aimed at slashing these deadlines, reflecting broader regulatory efforts to address infrastructure bottlenecks. As Amazon navigates these challenges, the situation underscores the critical need for enhanced grid capacity to support the continent's digital and industrial growth ambitions.
